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04/09/2007 - 00029040BOARD OF APPEAL AND EQUALIZATION CITY OF FRIDLEY APRIL 9, 2007 PLEDGE OF ALLEGIANCE: Mayor Lund led the Council and audience in the Pledge of Allegiance to the flag. ROLL CALL: MEMBERS PRESENT: Mayor Lund Councilmember-at-Large Barnette Councilmember Saefke Councilmember Varichak Councilmember Bolkcom OTHERS PRESENT: William Burns, City Manager Fritz Knaak, City Attorney Richard Pribyl, Finance Director Mary Smith, City Assessor Lynn Krachmer, City Appraiser Mary Smith, City Assessor, stated the meeting was held in accordance with Minn. Stat. §274.01. The purpose of the Board is to establish a consistent appeal procedure for property owners who want to appeal their 2007 estimated market value or the classification of their property. Only appeals for the current year's valuation or classification may be made. As the Board of Appeal and Equalization, the City Council has the ability to change values or classifications in accordance with State law. The Board has three possible courses of action that can be taken on each case: affirm, reduce or increase the current value based on information presented. If the property owner feels that the Board did not resolve their concerns, they may bring their case to the Anoka County Board of Appeals and Equalization which will be held on June 18. Ms. Smith said there must be a majority of the Local Board of Appeal and Equalization members present to have a quorum, and at least one member has to attend an appeal and equalization course developed or approved by the Commissioner within the last four years as certified by the Commissioner. The Board shall see that all taxable property is properly valued and classified. If property is omitted, it may be added by the Board. The Board cannot give a class of property an increase or decrease. They may only increase or decrease individual properties. The Board must hear cases for the current assessment year. As the Board makes reductions to individual properties, the amount of the reduction cannot exceed 1 percent of the citywide aggregate assessment. If the Board finds a case of undervaluation, it may raise the valuation of that property but it must first notify the owner. The Board must complete and adjourn within 20 days from the time it convenes. BOARD OF APPEAL AND EQUALIZATION MEETING OF APRIL 9, 2007 PAGE 2 Ms. Smith stated the procedure for the Fridley Board of Appeal and Equalization will be to hear the property owner's appeal and to make a decision based on information provided by the owner and the assessor. If no information is provided, the Board may direct staff to reappraise the property and report back to the Board at a reconvened meeting. Written appeals will be read once the property owners who are present have completed their appeal. Once read, the Fridley Board may confirm the 2007 estimated market value allowing the property owner to take the appeal to the County Board. Ms. Smith stated the 2006 assessment consisted of viewing approximately 1,440 properties, located in the mid-section of the City. If the property owner was not at home, a tag was left regarding the visit asking the property owner to call and set up an appointment. If there was no response, the City estimated the values assuming some improvements had been made since their last reassessment. In order for these property owners to appear before the Board, they will need to have the City physically review their property. Ms. Smith stated for the 2007 assessment and review, the number of residential sales that occurred in Fridley were 317. Of this number, 304 were single-family homes, townhomes, and double bungalows and 13 were condominium sales. The sales used for the sales ratio study are sales that have occurred from October 1, 2005, through September 30, 2006. These sales indicated that the City needed to increase one land zone. After making the adjustment, the City is in line with State requirements. 1. 7710 Main Street, PIN 03-30-24-44-0065. Ms. Smith stated this property is a 23,440 square foot industrial property that is currently being leased. The property was purchased in January, 2007, for $937,600 or $39.26 per square foot. In December, 2006, the buyer had an appraisal done on this property. The value conclusion of this appraisal is $1,000,000. The current 2007 assessment on this property is $1,013,400. After meeting with the property owner and reviewing this appraisal, it is Ms. Smith's opinion that the value be lowered to the appraisal's value conclusion of $1,000,000 upon the Board's approval. Councilmember Bolkcom wanted to point out this is the first time they have been presented with any information so none of them have had any time to review any of the appeals. Mayor Lund stated it sounded like petitioner is okay with the lowered value. MOTION by Councilmember Bolkcom to concur with the City Assessor's valuation of $1,000.000 on the property at 7710 Main Street. Seconded by Councilmember Barnette. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY. 2. 7701 Main Street, PIN 02-30-24-33-0018. Ms. Smith stated this property is a 19,200 square foot industrial building that is currently leased. The 2007 estimated market value is $893,200. Ms. Smith used the sales comparison approach BOARD OF APPEAL AND EQUALIZATION MEETING OF APRIL 9, 2007 PAGE 3 provided with the first case and made the appropriate adjustments to the comparables to make them like the subject property. She arrived at a value of $883,200 or $46 per square foot. After meeting with the property owner and reviewing this information, it is her opinion that the value should be lowered to $883,200. MOTION by Councilmember Bolkcom to concur with the City Assessor's valuation of $883,200, on the property at 7701 Main Street. Seconded by Councilmember Saefke. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY. 3. 7200 University Avenue, PIN 11-30-24-23-0019. Ms. Smith said this property is a retail building consisting of 4,912 square feet which includes the second floor. It was purchased in December, 1998, and had an appraisal done on it in October, 2003, for $480,000. The City's 2007 estimated market value is $620,900 or $126.40 a square foot. In researching this building, Ms. Smith discovered there were no small stand-alone retail buildings that had sold in Anoka County. Therefore, she expanded her search through the metro suburban area. Of these sales, she chose 15 that occurred from August, 2004, through September, 2006. Eliminating the high and low sales, the average value was $161.55 with the median at $160.64. Averaging all the sales she arrived at $164.83. Assigning the averages of $161.55 and $164.83, she arrived at a value between $793,500 and $809,600. Furthermore, there was a sale at 7730 University Avenue, Nikolas Hair and Spa, on January 27, 2006, which sold for $715,000 or $168.08 a square foot. It is her recommendation that the 2007 estimated market value of $620,900 or $126.40 a square foot be affirmed. MOTION by Councilmember Saefke to affirm the estimated market value of $620,900 or $126.40 per square foot for the property located at 7200 University Avenue. Seconded by Councilmember Varichak. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY. 4. 7685 Main Street NE, PIN 11-30-24-22-0022 Ms. Smith stated this property is a 17,400 square foot industrial building. It was purchased in July, 2004, for $750,000 or $43.10 per square foot. This building is similar to the two prior industrial buildings as far as location and building price. It was built in 1980. It is newer than the other two and has less square footage. She used the same comparison approach provided with the first case and made the appropriate adjustments to the comparables to make them like the subject property. She arrived at a value of $830,000 or $47.70 a square foot. It is her recommendation that the estimated market value of $909,200 be lowered to $830,000. Mayor Lund asked if Ms. Anderson was happy with the figure. Ms. Anderson replied, yes. BOARD OF APPEAL AND EQUALIZATION MEETING OF APRIL 9, 2007 PAGE 4 MOTION by Councilmember Bolkcom to affirm the estimated market value of $830,000 or $47.70 per square foot on the property located at 7685 Main Street NE. Seconded by Councilmember Barnette. UPON A VOICE VOTE, ALL VOTING AYE, COUNCILMEMBER LUND DECLARED THE MOTION CARRIED UNANIMOUSLY. 5. 137 Christenson Court, PIN 14-30-24-32-0289. Ms. Smith stated this property is a detached rambler-style townhome on slab. The 2007 estimated market value is $218,400. After doing a sales analysis of this property and using sales of similar townhomes throughout Anoka County, the determined value is $218,700. Sales in this particular townhome area were looked at. It is her recommendation that the value be affirmed at $218,400. Curtis Britz, owner, stated he did not agree with the figure. The house is 1,193 square feet. It is a basic two bedroom townhouse on a slab. There is one townhome in the area for sale. It is 1,800 finished square feet and they are asking $224,900. Fridley housing sales were very flat for 2006. Councilmember Bolkcom asked about how similar the property is to 120 Christenson? Ms. Smith stated it is the same square footage and it is a detached rambler on slab, which is the same as the subject property. Mr. Britz stated that house sold in June for $196,000. It was on Rottlund's premium lot and it cost $10,000 to get that lot. Councilmember Bolkcom asked about the property at 136 Christenson Court. That sold for $226,000 Ms. Smith stated that is a two-story, detached townhome. Mr. Britz stated two of the townhomes similar to his actually sold for less than the original purchase price. He stated he has been a homeowner since 1951 and has never had a house valued more than what he could sell it for. Rick Wolfe, 960 Hathaway Lane, said he sold one of the properties Mr. Britz mentioned about a year ago for $234,900. It was a two-story, and it just sold for $219,000. He said Mr. Britz could not sell the house for what it is valued at. Ms. Smith mentioned that their values are based on sales that occurred from October 1, 2005, through September 30, 2006. William Burns, City Manager, asked if that was the State's requirement. BOARD OF APPEAL AND EQUALIZATION MEETING OF APRIL 9, 2007 PAGE 5 Ms. Smith said that is what the State looks at and it is the State's requirement. Councilmember Bolkcom asked if the property at 120 Christenson was very similar. Ms. Smith said they are both ramblers on slabs and detached. Councilmember Bolkcom asked if the City could review it and bring it back to the ne�t meeting. Ms. Smith stated she could bring it back to the ne�t meeting. She said all the townhomes are basically the same and that townhome is probably valued the same. Councilmember Saefke stated he agrees with his colleagues that if one townhome is basically the same type, he thinks the appraisal should be the same for Mr. Britz's or less. Councilmember Bolkcom asked Mr. Britz if it was possible for him to get an appraisal. Mr. Britz stated the other townhome they are talking about is a premium lot, a$10,000 upgrade, and that sold for $196,000. Ms. Smith stated the ne�t meeting would be April 23. Mr. Britz stated he did not think he needs to get an appraisal. Mayor Lund stated whether the value has gone up $14,000 in a year is the real question. MOTION by Councilmember Saefke to continue Case No. 5, 137 Christenson Court, PIN 14-30-24-32-0289 until Apri123, 2007. Seconded by Councilmember Barnette. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY. 6. 5466 West Bavarian Pass, PIN 24-30-24-44-0099. Ms. Smith stated this property is an attached split, foyer-style townhome. The 2007 estimated market value is $227,300. After doing a sales analysis of this property and using sales of similar units in the immediate area, the determined value is $250,400. It is her recommendation that the value be affirmed at $227,300. Councilmember Lund stated he assumed her recommendation is substantially lower than the comparables he sees. He assumes the figure at the bottom average, after adjustments, of $250,353 is the average of the comparables and the subject property? Ms. Smith stated it was the average of the comparables after adjustments have been made. BOARD OF APPEAL AND EQUALIZATION MEETING OF APRIL 9, 2007 PAGE 6 Ronald Cadieux, 5466 West Bavarian Pass, asked about the different amounts on the tan and blue sheets he received from the County. Ms. Smith went over the two values. Mr. Cadieux stated in the real world the market valuation that he is paying is out of sight. It is not reality. Councilmember Bolkcom asked if there would be changes ne�t year in the valuation of some of these properties. Ms. Smith replied at this time they do not think so. The sales that are coming through are still holding above the City's estimated market values. So they really cannot say that sales are flat. It is just a very slow market right now. Councilmember Saefke pointed out what has to be taken into consideration, too, is a willing seller and a willing buyer. Mr. Cadieux stated the realtor he talked to about the Innsbruck area stated there are always exceptions. The general rule is everything has either stopped selling or they are making offers which are considerably lower. He stated he had an appraised value done on his house last year because he was thinking about selling it. It was at $240,000 and the realtor told him to figure on $225,000. The people doing the appraisals are charging $400, and they do an appraisal that the loaning company wants to hear. MOTION by Councilmember Varichak to affirm the estimated market value of $227,300 on the property at 5466 West Bavarian Pass, PIN 24-30-24-44-0099. Seconded by Councilmember Bolkcom. Councilmember Barnette stated he assumed Mr. Cadieux still has the right to appeal. Ms. Smith replied, yes. Mayor Lund stated he did not have any questions on this one. He thinks they did a fair job in giving Mr. Cadieux an estimate. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY. 7. 5297 Matterhorn Drive, PIN 24-30-44-43-0008. Ms. Smith stated this property is a rambler style single-family home. It consists of 1,464 square feet on the main floor with a full basement. The 2007 estimated market value is $297,100. After doing a sales analysis of this property, and using sales of homes in this area, the determined value is $332,800. It is her recommendation to the Board that the 2007 estimated market value of $297,100 be affirmed. BOARD OF APPEAL AND EQUALIZATION MEETING OF APRIL 9, 2007 PAGE 7 Mayor Lund asked Ms. Smith had spoken to the property owner. . Lynn Krachmer, City Appraiser, stated he went to the house, inspected the house, and talked about it with Ms. Griffith. He stated the house is dated. Real close to her house there was a much smaller house that sold for $275,000. Councilmember Bolkcom asked what his definition of being dated is. She said if the house had a brand new kitchen, what his appraisal would be. Mr. Crashmen replied, an increase of $25,000 to $30,000. Councilmember Bolkcom asked if Ms. Griffin was informed that she needed to be at the meeting. Mr. Krachmer said Ms. Griffin said she would be at the meeting. Councilmember Bolkcom said even if they affirm the value, Ms. Griffin would not be able to appeal because she did not appear. Ms. Smith replied, yes. MOTION by Councilmember Saefke to affirm the estimated market value of $297,100 for 5297 Matterhorn Drive, PIN 24-30-24-43-0008. Seconded by Councilmember Barnette. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY. Ms. Smith stated Ms. Griffith called on Friday to say she was going to be at the meeting and that her son who lived on Tempo Terrace was also going to be present. That is the ne�t case. They do not need to hear the case if he is not in the audience. 8. 7545 Tempo Terrace, PIN 11-30-24-11-0044. Ms. Smith stated this is a rambler style single-family residence. It consists of 1,160 square feet on the main floor with a full basement. The 2007 estimated market value is $207,200. After performing a sales analysis of this property and using sales of homes in this area, its determined value is $244,800. It is her recommendation that the 2007 estimated market value of $207,200 be affirmed. MOTION by Councilmember Saefke to affirm the estimated market value of $207,200 on the property at 7545 Tempo Terrace, PIN 11-30-24-11-0044. Seconded by Councilmember Bolkcom. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY. BOARD OF APPEAL AND EQUALIZATION MEETING OF APRIL 9, 2007 PAGE 8 9. 951 Hillwind Road, PIN 24-30-24-32-0060. Ms. Smith stated the property is an office building with 4,000 square feet. The property owner, Gerald Foss, brought in lease information late this afternoon. She has not had time to review the information nor look at sales of similar property. The 2007 estimated market value is $431,700 or $107.93 a square foot. The Board may choose to affirm the present value and allow the property owner to take this to the County Board or they may direct staff to analyze the data obtained from the owner and research sales of like properties and present the findings at a continuing meeting. MOTION by Councilmember Varichak to continue Case No. 9, 951 Hillwind Road NE, PIN 24-30-24-32-0060, until Apri123, 2007. Seconded by Councilmember Barnette. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY. 10. 13 - 77t'' Avenue NE, PIN 03-30-24-44-0073. Ms. Smith stated the Assessor's Office received an e-mail from Richard Harris in regards to his industrial building. He is out of town and is unable to attend the meeting. He did not state whether he would be back in town for the second meeting. The 2007 estimated market value is $807,900 or $46.97 a square foot. It is her recommendation at this time that the Board affirm the value so that the appellant can take his case to the County Board. Dr. Burns stated he talked with Mr. Harris this afternoon. Mr. Harris said he wanted to get it before the Council tonight so that he does not lose his right to appeal. MOTION by Councilmember Bolkcom to enter into the record an e-mail dated April 9, 2007, from Mr. Harris. Seconded by Councilmember Barnette. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY. MOTION by Councilmember Bolkcom to continue Case No. 10, 13 - 77th Avenue NE, PIN 03-30-24-44-0073, until Apri123, 2007. Seconded by Councilmember Barnette. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY. 11. 6200 Riverview Terrace, PIN 15-30-24-43-0039. Ms. Smith stated Mr. Harris' e-mail also stated that he would like to appeal his property value at this address. This property is a single-family home, with a 2007 estimated market value of $395,100. It is her recommendation that the Board affirm the value so that the appellant can take his case to the County Board. His value went down $2,200 from last year. BOARD OF APPEAL AND EQUALIZATION MEETING OF APRIL 9, 2007 PAGE 9 Dr. Burns stated when he talked with Mr. Harris it seemed he did not really know what the value of the property was at. MOTION by Councilmember Bolkcom to enter into the record an e-mail dated April 6, 2007, from Mr. Harris. Seconded by Councilmember Barnette. UPON A VOICE VOTE, ALL VOTING AYE, COUNCILMEMBER LUND DECLARED THE MOTION CARRIED UNANIMOUSLY. MOTION by Councilmember Bolkcom to continue Case No. 11, 6200 Riverview Terrace, PIN 15-30-24-43-0039, until Apri123, 2007. Seconded by Councilmember Varichak. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY. Ms. Smith stated they had the following walk-ins: 12. 8055 Riverview Terrace, PIN 03-30-24-??-0161. Ms. Smith said the owner, Mr. Stahlberg, is disputing the value because he lives on a flood plain. He stated he wanted the City to review it and present the information they find at the ne�t meeting. MOTION by Councilmember Bolkcom to continue Case No. 12, 8055 Riverview Terrace, PIN 03-30-24-??-0161 until Apri123, 2007. Seconded by Councilmember Varichak. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY. 13. 7429 East River Road. Ms. Smith said Rob Wants More, from Chris & Rob's, 7429 East River Road, is disputing the value. They just purchased the property in August, 2006, and the commercial appraisal was much less. Robert Dubnecay, president of Rob Wants More, stated they purchased the building in 2006. Their bank commercial assessed appraisal was about $50,000 less than the assessed value. They know they gave short notice and ask that the matter be continued to the ne�t hearing. MOTION by Councilmember Bolkcom to continue Case No. 13, 7429 East River Road, until Apri123, 2007. Seconded by Councilmember Varichak. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY. BOARD OF APPEAL AND EQUALIZATION MEETING OF APRIL 9, 2007 PAGE 10 MOTION by Councilmember Bolkcom to continue the Board of Appeal and Equalization meeting until Apri123, 2007. Seconded by Councilmember Varichak. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY. Respectfully submitted by, Denise M. Johnson Scott J. Lund Recording Secretary Mayor