Loading...
05/08/1975 BOE - 00015318�. �_. � d� � QOARD 0� E4UqI,IZATI,ON MEETXNG OF MAY 8, 1975 PAGE 1 The annual Board of Equalization meeting was called to order at 7 40 P.M. on May 8, 1975, by Mayor Nee. ATTENDANCE Present were Mayor Nee, Councilman Breider; Councilman 5tarwalt; Councilman Fitzpatrick; Marvin Brunsell, Assistant City Manager; Mervin Herrmann, City Assessor; Leon Madsen, �Deputy Assessor; Walter Mulcahy, City Appraiser; and Lou Johnson representing Anoka County. Councilwoman Carroll Kukowski was absent. GENERAL DISCUSSTON Mayor Nee explained that thts is not a regular Council meettng, 6ut that the Council is sitting as part of the annual Board of Equalization meeting. He introduced the Counci7 members, the Assistant City Manager, and the City Assessor, and then called on Mr. Herrmann to introduce the members of his staff and the representative from the County. Mr. Herrmann explained that each visitor to the meeting was asked to register prior to the meeiing, and then will be called in turn. Mayor Nee explained that the proceedings tonight were limited to the quest�on of whether or not the estimated market value assessment made by the Assessing �epartment as of January, 1975, is honestly and truly reflective of the true market value. There is nothing which can be done about the taxes themselves which are levied against these estimated market values. Their taxes are determined by the individual agencies involved such as School Districts, the City, the County, the Metropoliian Transit Commission, etc. Mayor Nee mentioned that the City Council receives approximate7y $.15 of each $1.00 of taxes. He said the obligation tonight is to insure that the assessed value placed on each property is fair. Mr. Herrmann explained briefly how the Assessing Department arrives at an estimated fair market value. There are basic standard rates for the different types of homes plus �variat�ons depending on location, size of house, type and size of garage, etc. Each building is treated as new construction in using these rates, and then depreciation is allowed based on the actual age of the buildings Economic values determine if valuation would raise or lower on an older home, based on what it would cost to build this same home at the present time. A selling price will not necessarily reflect what is considered a true market value The City's valuations at this time are not up to one hundred per cent of what the selling price might be, but are quite close. Economic values have to be considered over a number of homes in an area and how they are se7ling, and cannot be based on ,7ust one sale which might not reflect a true value because of many determininq factors such as upkeep of the property and appearance. Mayor Nee asked Mr. Johnson, the representative from the County, to state ,7ust what factors the Council might consider at this meeting. Mr. Johnson replied that the Council is empowered to make ad�ustments as they see fit, provided that the aggregate ad�ustments are no more than one per cent of the total valuation run for the City If there is a continuation of this meeting, it must 6e held within twenty days of the date of this meeting If any changes in valuations are made by this Board, Mr. Johnson has an abstract form which must be fil]ed in and returned to the County. Mr. �ohnson also mentioned that some valuation cards had been returned to the County as they were declared undeliverable by the Post Office, and he did have these cards with him in case any ci�izen present at the meeting had not received his card. Ma�or Nee asked Mr. Johnson to explain to the audience what their rtghts of appeal are if the Board of Equaltzation does not make any adjustment in their valuations and the property owners are still not satisfied. �Mr. Johnson explained that whether a person is present at this meeting or not, they are allowed to file a request for a review of their property va7uation to be taken up at the County Board meeting. The date of the County Board of Review meeting is shown on the card sent to each property owner from the County showing the estimated market va7ues. By call�ng Anoka County, you may receive a request forrn to fill in and return to the County, asking for a review of your valuation. Basic information is to be filled in on this form such as name, address, telephone number, legal description, and a brief statement of what reasons you have for questioning the valuation. An assessor from the County will come out and look at your property to determine if he feels there are any extenuating problems which might affect the value placed on the property You have to appear at the meeting of the County Board of Review to make your statement, and the County 6oard will make their �udgment at that time. If a reduction is made, this is called an abatement process. 9 °e'<,} r_I+J BOARD OF EQUALIZATION MEETING OF MAY 8, 1975 PAGE 2 Mr. Herrmann explained that a physical appraisal of each property should be made each two years. As th7s is impossible, it has been decided by legal interpretation that when only a portion of a City is able to be physically appraised in any one year, that the balance of the property not physically appraised has to be raised on an overall percentage to stay in line with the ,�r_perties physically appraised. The percentage of raise this year on residential homes was approximately fifteen per cent. All new construction has to be physically appraised. Commercial property was physically appraised two years ago, so was only raised by a perceniage this year. � Mayor Nee explained briefly the card each property owner received from the County showing what estimated market value their 1975 taxes were based on, and the amount of the new estimated market value which was placed on their property as of January, 197�v affecting their taxes payable in 1976. According to present law, the extimated market valuation on which the actual tax is based may be raised only five per cent each year, though the estimated market value may actually have increased more than that. Only a five per cent increase in value will be reflected on the taxes payable in 1976 unless this law is repealed. The taxes would then be based on what the true estimated market value is considered to be. Mr. Herrmann explained that this does not necessarily mean taxes themselves wi71 rise, because if the values of all the properties are increased, the mill rates themselves will lower. N0. 7--MR. RICHARD HARRIS Mr. Harris requested that he be placed last on the Agenda, as he had a number of things to discuss. N0. 2--MR. DUANE NAROG, 1465 NORTH DANUBE (LOT 5, BLOCK 3, INNSBRUCK NORTH ADDITION, PLAT 56353, PARCEL 240) Mr. Naro9 explained that his home was built last year. Upon completion he discovered the basement was lower than the sewer drain to the street, so as a result he had to insta7l a sump pump to force water from his basement level and also the drainage from ' h�s laundry facilities. He stated that the lot is alWays soggy and has a peat bog base, and that the ground water level is just below his basement floor. Mr. Narog mentioned an agreement which was made between the developers of the R-1 areas in the Innsbruck North development and the City, in which certain lots were felt to be not builda6le unless peat was removed and good fill brought in. For this reason the assessments for the water and sewer and concrete streets were spread over only the lots considered buildable without additional ground work, because it was felt there would be additional expenses for anyone building on one of these poorer lots. Mr. Narog was not aware of the condition of the ground soil of his lot at the time of purchase, but now feels this should have been one of the lois which should have had assessments excluded He stated that he is unable to ever have the potential of finishing off his basement or installing a basement bathroom because of his water pro6lem, and feels this definitely detracts greatly from the value of his home. Mayor Nee questioned if the owner or builder had come in and received the correct elevations from our City Engineering Department, which they are supposed to do. Mr. Narog stated he had not done this, but assumed that the 6uilder had obtained this information. The lot value w�th improvements �s $17,760.00. Mr. Narog paid $9,000.00 for the 7ot plus assessments which ran about $5,000.00. Mr. Herrmann did mention that we have some very expensive houses in the City which do use sump pumps. Mr. Narog said that he had hired a professional landscaper who stated that with the rollin9 terrain of this lot, there was no way to obtain the proper drop to the street, and that the elevations just met the minimum standards of the buildin9 code. When a physical appraisal was made in December, 1974, ' after the home was completed, by our Assessing Department, there was no apparent water problem. It was the Council's decision to continue this item until the Board of Equalization reconvened, to allow time for the Assess�ng Department to make a new physical appraisal of this property and then report back to the Board. Mayor Nee stated that later in the meeting a date sometime w�thin the next twenty days would be set to reconvene this meeting, and that Mr. Narog would be informed of the date and time of this meeting. , ? �, BOARD OF EQUALIZATION MEETING OF MAY 8, 1975 PAGE 3 N0. 3--MR. EUGENE BONNET, 6D61 UNIVERSITY AVENUE NORTHEAST (CLUB 47, LOTS 23 AND 24, BLOCK 4, HY�E PARK ADDITION, PLAT 56308, PARCELS 900 AND 940) Mr. Bonnet said that his new valuation is $48,200.00 which he feels is too high. He said he has two friends in the real estate business who make appraisals. On looking over his property, one felt it would only sell for $40,000.00 and the other felt it would sell �at a maximum of $45,000.00. Mr. Herrmann stated that we have a value of $43,500.00 on the building and two lots, and $4,700.00 on the one-half lot adjacent. Councilman Starwalt questioned if Mr. Bonnet's business is for sale. He replied that it is not at the present time, but that he is considering such a circumstance. Mr. Herrmann said the building has 2,482 square feet of area and 100 feet of frontage on University Avenue. The estimated market value on the building is $24,500.00 and the rest of the value is on the land. He stated that several years ago this land was selling for over $2.00 per square foot. Commercial businesses cannot all be �ncreased equally because of many factors such as increases in business, the fact that there are not the amount of like sales to compare, and that tenant changes have to be taken into considerat�on also. This property was not increased by fifteen per cent. Mr. Bonnet asked if the Assessor would honor an appraisal value made by an independent appraiser, if Mr. Bonnet hired one. Mr. Herrmann replied that they would certainly give consideration to an independent appraisal, provided it was made by an appraiser the City feels is competent, but he did not say the City would bind themselves to such an appraisal valuatton. It was the Council's decision that at the present time this property is worth the estimated market value placed on it, and there should be no change. N0. 4--MR. RAYMOND WILLIAMS, 6240 ALDEN WAY (LOT 2, BLOCK 2, AL ROSE ADDITION, PLAT 54074, PARCEL 450) �Mr. Williams stated that he didn't believe the estimated market valuations of the homes on his block were correct. He said there are three rambler-type homes on his block and the balance of the homes are split-entry homes which he feels have a much greater market- ability, and yet he states that his valuation of $38,000.00 is second highest in the entire block, even though his hasement is not finished. The homes on this block were built two years ago, and he said the split-entry homes are still valued the same as when they were built. He said some of these split-entry homes are completely finished including basements, and yet their values are less than his. His ob,7ection was not really that his home was valued too high, 6ut rather that it was valued too hi9h compared to the other homes in his block--in reality saying that the split-entry homes were appraised at too low a figure. Mr. Herrmann brought up the fact that our Assessing Department would be inclined to agree with Mr. Williams that the split-entry homes are sltghtly undervalued, not only in his 61ock but all over the City and possibly the County. After all appraisals were completed this year, based on marketability at the present time it appeared that the value on split- entry homes was a little low. This market of course, might change, but if it does not, in two years when a change can be made, split-entry valuations will be increased accordingly, whereas rambler-type homes would not be raised as much. Of course market- ability of different types of homes could change again. Mr. Williams said he didn't feel it was fair for him to be penalized for four years without a change. Mr. Herrmann said he agreed that it didn't seem fair, but we do encounter such problems through the City no matter how hard they try. Councilman Starwalt stated that if the market continues as it has with split-entrys being so popular, then in two years Mr. Williams will be �receiving the advantage of a lower tax and the split-entrys will be payin9 the higher tax Mr. Williams stated that he definitely intends to appeal his valuation to the County Board of Review if he could receive no satisfaction at this meetin9. It was the opinion of the members of the Council that they could not in all fairness increase all split- entrys in this particular block without increasing the valuation of all split entrys in the City and County, and that it would 6e �ust as unfair to lower Mr. Williams' valuation when they felt that his home was worth the estimated market value placed upon it. The basic schedule for split-entrys and for rambler-type homes as well as all other basic types of homes comes from the County. Mr. Williams showed Mayor Nee a list he had prepared showing the estimated market value placed on each property in his block, which all of the Councilmen then examined. � ��`� BOARD OF EQUALIZATION MEETING OF MAY 8, 1975 PAGE 4 It was pointed out that any property owner whose valuation was raised as a result of this meeting must be notified. There have been no re-sales in this block to be used in comparison. The question was brought up as to whether the local Board could raise the vaiue of every sp11t-entry through the CTty by a percentage. Mr. Johnson stated that the local Board has the authority to raise any individual property owner's valuation as long as they stay within the one per cent total limitation on changes, but cannot raise valuations by class. Mr Williams said that at the time he purchased his home, he could have had either a split-entry or a rambler-type home for the same price, although someone else might not have had this same choice. He said he 6ought the rambler-type home because he felt it would have a lower tax as split-entrys were more popular on the market. Mr. Williams has more square footage on the ground floor with a rambler for taxable purposes than the spl�t-entry homes do. He stated that he has made no improvements to his home since it was built. It was the general opinion of both the Council members and the Assessing Department that the estimated market value placed on Mr. Williams' property was a fair value, and that his home could defTnitely be sold for more than this value with no problems. Mr. Williams said the split-entry valuations are running approximately $3,000.00 less than his, and yet they are usin9 the whole home for living space, whereas he is not utilizing his basement. P9r. Herrmann po�nted out that he does have this basement potential, and that if his basement were fim shed, the estimated market value would be higher. The goal of the Assessing Department is to have the estimated market value within ninety-five per cent of actual selling price. Mayor Nee asked Mr. Williams if the split-entrys were brought to within ninety-five per cent of their actual market value, if he would object to his home also being brought to within ninety-five per cent of actual market value. Mr. Williams said it would depend on the values Mayor Nee said this was done with his own home, and that he did not appreciate the increase but did feel it was fair. Mr. Herrmann stated that ti is physically impossible at this t�me to go back and raise the value of every split entry in the City, let alone the County. ' Councilman Starwalt pointed out that if this trend of marketability continues, the taxes will even themselves out and the split-entrys will 6e raised, and Mr. Williams with a rambler-type home will then appreciate a lower tax in comparison. He sympathizes w�th the situation, but feels there is nothin9 the Board of Equalization can do. Councilman Fitzpatr7ck pointed out that in effect, if they lowered Mr. Williams' value, they should really lower the value of every rambler-type home in the City and County if they were to be fair and consistent. Mr. Herrmann mentioned that though finished basements do add to a home as a selling point, a property owner does not necessar�ly receive a price increase comparahle to what they have invested in finishing a basement. Just a few years ago, real estate appraisers felt that adding any additional value for a finished basement was an unfair thing for the Assessing Department to do, as they could not sell the homes for any appreciable price difference, even if the basements were finished. Councilman Breider brought up the question of just how much Mr. Herrmann felt the split- entrys were below estimated market value. Mr. Herrmann said that they were probably around ninety-two per cent of actual market value, and although there might be an exception, he did not feel that there was a$3,000.00 difference between ram6ler-type homes and split-entry homes, and that the difference was considerably less than that amount. Mayor Nee said that if Mr. Williams could show that his property was not salable at $38,000.00, that then a lowering of the estimated market value could be considered, but ,7ust by comparing and saying that he felt his house was worth less than neighboring houses was not proof that his house was not worth the $38,000.00 valuation. Mr. Williams said an appraiser told him $40,000.00 would be top selling price for his home, as opposed to $46,900.00 for a neighboring split-entry type of home in November or December of 1974. Mr. Herrmann said this was not a true or correct comparison in his opinion. Councilman Fitzpatr�ck said that anything that could be pursued throu9h the County or anything that could be uniformly applied to the split-entry homes throughout the City would be the only action that could be taken. BOARD OF EQUALIZATION MEETING OF MAY 8, 1975 PAGE 5 I V = MOTION 6y Councilman Fitzpatrick to sustain the judgment of the Assessing Department and retain the estimated market value of $38,000.00. Seconded by Councilman Breider. Upon a voice vote, all voting aye, Mayor Nee declared the motion carried unanimously. N0. 5--MR. GARY ANDERSON, 413 RICE CREEK BOULEVARD (LOT 1, BLOCK 2, HOLIDAY HILLS 2ND ADDITION, PLAT 56247, PARCEL 100) 'Mr. Anderson stated that he had a question rather than an actual complaint about his estimated market valuation. He stated that his house is located next to a park. At the time he purchased hts house he felt this was an advantage. He has now changed his mind about the lot being such a desirable location due to the fact that the park has been developed so there is now much more traffic, parking in front of his property, and more noise and bright lights. His property is also located across the street from church property, although this does not cause him any problems at the present time. Mr Anderson asked if all the houses in his area are considered of approximately the same value, or if consideration is made of such factors. Mr. Herrmann explained that as ihe properties are located further down the street away from the park and nearer the creek, the valuations are higher because the properties are considered more choice. He said that some people do prefer a location near a park, whereas others do not. Mr, Anderson was satisfied by the answer to hts question. N0. 6--MR. JEROME W. BUHN, 7573 LYRIC LANE� (LOT 6, BLOCK 3, MELODY MANOR 4TH ADDITION, PLAT 56811, PARCEL 1080) Mr. Buhn stated that he does not have any quarrel with his estimated market value, but does question why he received such a large increase in his taxes this year--thirty-two per cent. With the slow-down in economy and holding the lines on wages as they are, this does not seem reasonable to him. �Councilman Breider, who lives in this same area, explained some of the reasons why this particular area received the largest increase of any area in Frtdley this year. The property is located in School District No. 16. Due to the Fiscal Disparity Law now in effect, we have to share with all communities within a seven-county area. Property owners located in this particular area had to pay a larger share because of the numerous industries in this area, but the majority of what was paid went to Minneapolis and St. Paul rather than 6ack to our area which resulted in approximately a 4-mill increase. This accounts for approximately $81.00 of the increase on Mr. Buhn's taxes. Then Vocational School No. 916 located in White Bear added an additional 2.39-mill increase to the school district tax for this area. This added another $20.00 to Mr. Buhn's tax increase. Some coummunites had a public vote as to whether they would be involved with Vocational School No. 916, but Councilman Breider said that to the 6est of his knowledge he and his neighbors had never been asked their opinion as to School District No. 16 helping to support this school. Mr. Buhn was satisfied with the explanation. N0. 7--MR. WARREN E. WOO�S, 6863 SEVENTH STREET NORTHEAST (LOT 6, 4LOCK 5, RICE CREEK TERRACE PLAT 7 ADDITION, PLAT 57586, PARCEL 2660) Mr. Woods said that according to his figuring his taxes went up close to twenty per cent, rather than the fifteen percent which was the overall average increase, and questioned why. He said his only improvement was a$330.00 blacktop driveway, and he also has a �sump pump in his basement. He stated that this year if he hadn't had the sump pump, he would have had water on his floor. With the sump pump in use, he only had moisture. He said the valuation card he had rece�ved for �anuary 2, 1973, was $26,700.00 and for �a�aury 2, 1975, was $31,200.00. Mr. Woods said maybe his figuring was wrong, but the �ncrease was at least eighteen per cent. Mr. Herrmann said he had received an increase of sixteen and seven-tenths per cent. �, � �», BOARD OF EQUALIZATION MEETING OF MAY 8, 1975 PAGE 6 Mr. Woods then said his figuring was wrong, but that he would then question his estimated market value, because he �ust couldn't understand how it could have risen that much. He stated his father-in-law lived just south of Mississippi Street and that his taxes nad gone down. Mr. Herrmann said this could not be true, and asked that Mr. Woods check with the Assessor's Department and the staff would check the records, because he was sure there had 6een no reductions as the mill rates went up this year for every district of the City. Mr. Herrmann stated that the values have risen because the prices of houses , have just gone up this much. The question was brought up that maybe the father-in-law had finished paying a long-standing assessment which, though reductng the tota7 tax statement, does not affect the real estate tax itself. Mr. Herrmann pointed out that the taxable market values for taxes payable in 1974 and for taxes payable in 1975 were identical, but the increase in mill rates accounted for the increase in the taxes and not a change in valuation. Mr. Woods said he would check w�th the Assess�ng Department as to the correct amount of his father-in-law's real estate tax. He felt his question had been answered satisfactorily. N0. 8--MR. RANDY LEE HOFFA, 8000 EAST RIVER ROAD (LOTS 12 AN� 25, BLOCK 8, SPRING BROOK PARK AD�ITION, PLAT 59140, PARCEL 1540) Mr. lioffa said that he purchased his home last August for $26,000.00. He said it was appraised at $26,OD0.00 by an independent appraiser, and at $26,500.00 by an FHA appraiser. His estimated market value is $30,200.00,an increase of $4,000.00, which he feels is too high, especially when he feels the $26,000.00 purchase price for the home last fall was a fair price and value then. Mr. Herrmann questioned if there were special assessments on the property, and Mr. Hoffa said ihat all special assessments were paid off by the seller when he purchased the home. Mr. Herrmann said this is in an area where the values were raised on a straight fifteen � per cent this year. This area was physically re-evaluated in 1973, and if more than five per cent value was added because of this re-evaluation, only five per cent was added on the tax statement in one year per the law, and the additional increase wou7d be added on the following year. Mayor Nee asked Mr. Herrmann what his opinion was, and Mr. Herrmann said he would like to take another look at this home to determine if the evaluation was fair, and if there were any extenuatin9 circumstances, and would bring back the information at the continuation of this meeting. Mr. Hoffa will be notified of the date and time of the meeting. iVO. 9--MR. LEO LEMPKE (RESIDES AT 2229 NOR7HEAST 6TH STREET) -- OWNS VACANT LOT WITH 38.5 FEET FRONTAGE ON 47TH AVENUE AN� 3RD STREET (LOT 30, BLOCK 9, PLYMOUTH AD�ITION, PLAT 57352, PARCEL 5385) Mr. Lempke stated that his estimated market value this year was increased from $500.00 to $600.00, which he feels is too h�gh for this vacant lot, Mr. Lempke explained that when University Avenue was widened and made into a freeway, 47th Avenue was closed off as a dead-end street. The City offered this small lot through a Mr. Jim Lupient for sale about thirteen years ago, and Mr. Lempke bought it wtth the hope of someday developing it as a building site. He has paid taxes on it all these years. Mr. Lempke said he applied for a building permit sometime during the term of Jack Kirkham as Mayor, and it was approved by the Planning Commission and then went to Council. Inadvertently he was not present at the meeting when the Councii took action and denied his request for a buiiding 1 permit. Since then he has attempted nothing further. He said consideration of vacation of 47th Avenue was discussed along with the application for a building permit. If this street were able to be vacated, depending on what utility lines are in the street, it would give Mr. Lempke a buildable lot. Mr. Herrmann stated that sama type of situation, possible. he had talked with someone else recently about a lot with the and this person too is going to see if a street vacation is BOAR� OF EQUALIZATION MEETING OF MAY 8, 1975 � �,, � ���1 PAGE 7 Councilman Fitzpatrick suggested that Mr. Lempke again petition for a street vacation and then ask for a building permit. Formerly there was talk of putting a walkway over Untversity Avenue on 47th, so that was one reason why this deadend street was not vacated at that time. This possibility no longer exists. Also, some of the regulations regarding the placing of buildings on narrow lots might have been changed since the original request was made. Mr. Lempke obtained Councilman Fitzpatrick's telephone number and will contact him. Councilman Fitzpatrick told him that the application for vacation would have to be made at the City offices. The City Assessor said he does not know if this lot is buildable or not. If so, the valuation would be much higher than it presently is. It was the feeling of the members of the Council that no change should be made at this time in the estimated market value of the vacant lot. 1--MR. RICHARD HARRIS At this time Mayor Nee called on Mr. Richard Harris, registered as No. 1, but who had asked to appear following any other visitors to the meeting in fatrness to them as he had a numher of things he wanted to discuss. RESIDENCE--6200 RIVERUIEW TERRACE (LOT2, BLOCK 3, JULI-ANN ADDITION, PLAT 56450, PARCEL 240) Mr. Harris first publicly thanked Mr. Herrmann and his staff for the long hours they have spent going over the estimated market valuations on various properties owned by Mr. Harris and �ointly by Mr. Harris and his father, and explaining their reasoning for the valuations. He said they were very patient and helpful, and he hoped that an equitable solution for all could be reached. Mr. Harris' first concern was that he felt that the estimated market value of $59,190.00 �on his home is too high. He said he had gone over the valuation with Mr. Mulcahy who physically appraised the house. He exp7ained he knows how much he put into the house to build it, and from that viewpoint he feels it should not carry this much value One of his major points is that the design of the house �s very innovative, and it was his feeling that he has never gotten a true appraisal of va7ue because there is nothdng of a similar type to compare with his home. His home is located on a large river lot He also questioned the value put on the lot, and it was pointed out that fairly comparable river lots have been selling for $18,000.00 and $20,000.00 including assessments. It was the decision of the Council that his home could be sold for $60,000.00 with no difftculty, taking into account both the building and the location, so they felt no change should be made in the valuation. 7701 MAIN STREET NORTHEAST AND VACANT LOT ADJACENT (LOT 5, BLOCK 3, EAST RANCH ESTATES 2ND ADDITION WITH BUILDING, AN� LOT 6, BLOCK 3, EAST RANCH ESTATES 2ND AD�ITION, WHICH IS VACANT: PLAT 55754, PARCELS 140 AND 150) Lot 5 is commercial property which has a warehouse on which Mr. Harris feels the estimated market valuation is ,7ust a little bit high, and an office area in addition to the land which he feels is very high. He satd he purchased the lots for $12,600.00 together. We have a va]ue of $24,800.00 on Lot 5 with the building and a value of $15,900.00 on the vacant lot. He feels this is not a realistic value. Mr. Harris says he actually had a total construction cost of $66,000.00 for this building, �and feels our valuation of $115,600.00 is too high He stated that he had gone over the valuation with Mr. Madsen, and according to the standards used by the Assessing Department to place a value on corranercial property, Mr. Madsen's valua�ion was very fair and done correctly. Mr. Harris contends that it is the standards used in assessin9 commercial property with which he disagrees, and not the actual assessing job done by the City. He suggested for instance that values be computedon cubic footage rather than on square footage. Mr. Madsen explained that values used to be computed that way, but now virtua7ly all values are based on square footage with the exception of rental storage warehouse units which are rented and in which the total sp,ace is used from floor to ceiling. 18� BOARD OF EQUALIZATION MEETING OF MAY 8, 1975 PAGE 8 Mr. Harris said that it is d�fficult when you have good tenants who are having a difficu7t time paying the rent now with the economic situation the way it is, to pass on large increases in rent to compensate with the taxes being increased so much. He feels this is unfair to both owner and renter. In working with commercial property, our Assessing Department works with the basic rate book by Marshall and Swift which is widely used all over the County. This book has basic ratings for commercial buildings and takes in different variations such as type of construction, type of lighting, etc. 7710 AND 7720 MAIN STREET NORTHEAST (LOTS 1-10, BLOCK 8, ONAWAY ADDITION, PLAT 57189, PARCEL 1830) Mr. Harris also questioned the estimated market valuation placed on his properties at 7710 and 7720 Main Street Northeast. Mr. Herrmann stated that in going over these valuations with Mr. Harris, an error had been discovered on Parcel 1830 in the measure- ment of the building at 7710 Main Street Northeast, and this error will be corrected by the Assessor's office automatically and no action need be taken by the Board of Equalization to correct this error. Mr. Harris again pointed out that it is the standards used in p7acing a valuation on the 6uildings that he really ob�ects to, and not the fairness of the valuations themselves. The Assessor said these lots were originally tax forfeit lots with a low value placed on them �ust so they would sell and get back on the tax ro+lls. The selling price was not a true indication of their real value. The Assessor also mentioned that any cost for correction of soil conditions is applied to the land values rather than the building values. Mr. Harris agreed with this. 13-15-17 -- 77TH WAY (LOTS 11 AND 26-37, BLOCK 8, ONAWAY ADDITION, ' Next Mr. Harris discussed his buildings located at 13-15-17 -- 77th Way Northeast. He stated that these buildings were done in stage construction and that again, in using ' some innovative building designs, he feels it is difficult to have these properties appraised at their true value. Mr. Madsen pointed out that while saving some building costs by using new types of materials, you also do pay a premium for the newly developed types of materia7s. Mr. Harris mentioned that he actua7ly paid less on the most recently built building for some of the lurober and also for some of the masonry work, which greatly suprised him in these days of rising costs. Also, some of the labor was cheaper than in prev�ous years. Mr. Herrmann stated that over all three buildings combined, there was a ten and one- half per cent increase in valuation. Mayor Nee asked if an independent appraiser was hired, with Mr. Harris paying one- half the cost and the City the other half, would he be willing to abide with the decision of the appraiser as to a fair market value. Mr. Harris said he would be willing buthe would have to discuss it with his father as they are partners. Mr. Herrmann was then asked what he thought an independent appraiser might charge, and Mr. Herrmann thought the cost would be in the neighborhood of $1,OOO.DO. Councilman Breider then questioned whether the City might not be setting a precen'dent in doing this, as then we would be almost obliged to do this for any other commercial property owner who might request a new valuation. General discussion was held as to where this money could be obtained, etc. The question was directed to Mr. Herrmann as to just what was done last year when Viking Chevrolet questioned their valuation. Mr. Herrmann explained that he and h�s staff visited a num6er of car dealerships in various communities and compared their valuations, which resulted in the Board of Equalization reducing the market valuation about $.06 per square foot on the valuation. It was suggested that perhaps a representative from the County would meet with Mr. Herrmann, his staff, Mr. Harris, and his father, and would physically evaluate the buildings again and go over the procedures used, if Mr. Harris was willing. He agreed with this su9gestion, and said if he could in his own mind feel justified that these buildings are worth this much, he could bring himself to acaept these valuations. 1 i�5 BOAR� OF EQUALIZATIDN MEETING OF MAY 8, 1975 PAGE 9 VRCANT LOTS (LOTS 1-7, BLOCK 7, ONAWAY ADDITION, PLAT 57189, PARCELS 1420, 1430, 1440, 1450, 1460, 1470, AND 1480) Mr. Harris next discussed a number of vacant lots which he owns and the estimated market valuat�on placed on them. The valuation of $3,000.00 on Lot 1 was not too much out of line he felt, as Lot 7 is larger than the other lots. Then ihere is a valuation of $2,500.00 on Lots 2, 3, 5, 6, and 7, and a valuation of $1,700.00 on Lot 4 as there is an open ditch running through this lot. Mr. Harris said that there is a topography map of the original Onaway Plat which shows that much of this soil is peat. He said specificially that part of Lot 2 is good and part poor, that Lots, 3, 4, 5, and part of Lot 6 are also poor, 6ut that Lot 7 has a good soil base. Mr. Herrmann explained that it is d�fficult to ascertain this by �ust looking at surface so�l, and that the City has neither the time, money, nor the facilities to make sotl testings when appraising vacant land. VACANT LOTS (LOTS 21, 22, AND 23, BLOCK 1, ONAWAY ADDITION, PLAT 57189, PARCELS 210, 220, AND 230) Mr. Harris also mentioned that he felt the valuations on Lots 21, 22, and 23, Block 1, Onaway Addit�on, are high because of the poor soil conditions. Mr. Harris said there is a lot of peat soil on Lot 23. It was agreed that the Assessor's Department will make a physical evaluation of these vacant lots to see if they feel ,7ustified in the valuations they have placed on these lots. MOTION 6y Counc�lman 8reider to reconvene this Board of Equalization meeting next Thursday evening, May 15, 1975, at 7:30 P.M. The motion was seconded by Councilman Fitzpatrick. Upon a voice vo�e, all ayes, Mayor Nee declared the motion carried unanimously. MOTION 6y Councilman Breider �o recess the meeting of the Board of Equalization. �Seconded by Counc�lman 5tarwalt. Upon a voice vote, all ayes, Mayor Nee dec'ared the meettng of the Board of Equalization recessed at 10:35 P.M., May 8, 1975. Respectfully submitted, Pa�c i�ke s ���� � William J. Nee Mayor