Loading...
04/28/2008 BOE - 29248BOARD OF APPEAL AND EQUALIZATION CITY OF FRIDLEY APRIL 28, 2008 The Board of Appeal and Equalization meeting for the City of Fridley was called to order by Mayor Lund at 7:00 p.m. 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 Mary Smith, City Assessor Lynn Krachmer, City Appraiser Janelle Disrud, County Appraiser Mayor Lund called the Board of Appeal and Equalization Meeting to order at 7:00 p.m. Mary Smith, City Assessor, stated this meeting is a continuation of the Local Board of Appeal and Equalization meeting which was held on April 14, 2008. The purpose of this meeting is to present information to establish the 2008 estimated market value on four properties whose owners' appealed the value at the first meeting. As the Board, the City Council has the ability to change values or classifications in accordance with State law. Ms. Smith stated the Board has three possible courses of action that can be taken on each case. They can affirm, reduce or increase the current value based on the information presented. If the property owners feel that the Board did not resolve their concerns, they may bring their case to the County Board of Appeal and Equalization which will be held on June 16. Ms. Smith stated there were three appellants who appeared before the Board at the first meeting. After meeting with them at their properties and discussing value and taxes, two of the property owners felt that the values were fair, therefore will not be attending tonight's meeting. 1. 6250 Riverview Terrace NE, Pin No. 15-30-24-43-0015, the 2008 Estimated Market Value should be affirmed at $353,200. BOARD OF APPEAL AND EQUALIZATION MEETING OF APRIL 28, 2008 PAGE 2 MOTION by Councilmember Bolkcom to affirm the appraised value of 6250 Riverview Terrace NE, Pin No. 15-30-24-43-0015, at $353,200. Seconded by Councilmember Saefke. UPON VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY. 2. 601 Ironton St NE, Pin No. 03-30-24-23-0131, the 2008 Estimated Market Value should be affirmed at $189,400. MOTION by Councilmember Bolkcom to affirm the appraised value of 601 Ironton Street NE, Pin No. 03-30-24-23-0131, at $189,400. Seconded by Councilmember Saefke. UPON VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY. 3. 7300 University Avenue NE. Mary Anderson, property owner, presented appraisals she had done on both properties to the Council. Mayor Lund asked if staff had an opportunity to look at the appraisal prior to tonight. Ms. Anderson answered no, she just received them today. Councilmember Barnette asked what the property was appraised at. Ms. Anderson answered $590,000. Mary Smith, City Assessor, stated that the third appellant owns two properties--a retail building and a storage/warehouse building. Ms. Smith said she researched sales of six similar retail buildings (3 of which were in Anoka County), along with six office building sales (5 of which were in Anoka County). The Anoka County retail sales indicated a median sale price of $137.50 per square foot. The County office sales indicated a median sale price of $132.50 per square foot. Ms. Smith said she applied the sales approach using the retail sales and made adjustments to make the sale properties similar to the subject property. After review of these sales and adjustments, the sales approach indicated a value for the subject property at $677,800, or $13 8.00 per square foot. Ms. Smith stated that along with reviewing sales, the income approach was also applied to the subj ect. In doing so, the Colliers Turley publication was referred to reviewing the year 2007 along with the Leasing Guide. A blended rate of $12.50 per square foot along with a 9.4% vacancy rate was used. The resulting indication of value was $646,500 or $131.60 per square BOARD OF APPEAL AND EQUALIZATION MEETING OF APRIL 28, 2008 PAGE 3 foot. After applying these two approaches, it is recommended to the Board that the value be affirmed at $637,800, or $130.00 per square foot. Mayor Lund asked if Ms. Anderson's appraisal was done by a certified appraiser. Ms. Anderson answered yes, the appraiser was in Wayzata and did the original appraisal when she purchased the property about 10 years ago. She said she had other information but staff did not want to look at that information. Mayor Lund asked if she has owned the property since improvements were made. Ms. Anderson answered yes. The addition was in 1998. Councilmember Bolkcom asked about the comment regarding having other information that staff did not want to see. Ms. Anderson said that she had a title company pull up properties in the area but Ms. Smith said she was happy with her information and did not need to see it. Councilmember Bolkcom asked if there was a reason staff did not want to look at that information. Ms. Smith answered that she asked the property owner if there was any information she could look at and she said at that time she was going through the properties along the frontage road and she did not have anything at that time. Ms. Smith asked for the information to be faxed but Ms. Anderson said that it was a lot of papers to fax. Ms. Smith asked if Ms. Anderson could drop the information off at the office and it did not sound like it was something she could do. Ms. Anderson said it was a lot of pages, and she did not think Ms. Smith would want her to fax all the pages. Mayor Lund asked how much Ms. Anderson paid for the appraisal. Ms. Anderson declined to answer. She used the original person who did the first appraisal and it was easier for them to just update the information. Mayor Lund asked if Ms. Anderson were to sell the property if she would sell it for $590,000. Ms. Anderson said that would probably be all she could get. The property would be worth more to rent out than to sell. Councilmember Bolkcom said that looking at the comparative sales, the sizes were not the same, so it was hard to compare. Ms. Smith said that adjustments were made in regards to the size. It is hard to find the same size. The one most similar to the property is the one listed at 8701 Central Avenue. BOARD OF APPEAL AND EQUALIZATION MEETING OF APRIL 28, 2008 PAGE 4 Councilmember Bolkcom asked how old the building was. Ms. Smith said it was built in 1967, so it is older. Mayor Lund said that looking at the appraisal of $130.00 per square foot, this property is appraised on the low side. Some of the comparisons are as high as $369.00 per square foot. The average is much higher than what the property is being appraised at. Ms. Anderson said that her property appraisal has gone up every year. It went up 17% this year when everyone else's went up only 10%. Ms. Smith said the 2007-2008 value was a 2.7% increase. Ms. Anderson said that is correct but it still keeps going up every year and she needs to justify the value of the building to pay these increases. Mayor Lund said that he also owns commercial property in Fridley and over the last two years the property has increased 32%. Residential property is down and the values are going down but commercial property remains strong. He also asked when she started the appraisal process because it usually takes a while to complete. Ms. Anderson said that she paid $600 for the appraisal and the old appraisal was already on record so the appraiser just updated the information. Councilmember Barnette said that on the appraisal it did note that no personal inspection was done on the property. William Burns, City Manager, said that on commercial property they were also trying to catch up with the sales ratio. He asked Ms. Smith to explain this process. Ms. Smith said that the State requires the City to take the sale price and the estimated market value and they should be at 90-105%. If there is variance, there could be a State mandate across the City for any particular property, residential or commercial, to be at that ratio. In tax court, sales are a factor and we have to be within the 90-105% ratio. Dr. Burns asked if Fridley has lagged behind in the ratio. Ms. Smith said that Fridley, prior to this year, has not had six sales to stand alone for ratio. When this happens, the State goes along with the countywide sales ratio. Last year the County was at 89%, so we were below the 90% threshold. Mayor Lund said that he would like to make an offer. The petitioner did try to get an appraisal and even though staff does a lot of research to get a fair value, he wanted to see if Council could negotiate with the petitioner. BOARD OF APPEAL AND EQUALIZATION MEETING OF APRIL 28, 2008 PAGE 5 MOTION by Mayor Lund to split the difference of the two appraisals down the middle. No one seconded the motion. Dr. Burns said that there is another process through the County where the petitioner would have the opportunity to get the appraisal to the County in enough time to look at the information. It may not be in the best interest of the City to vote on this item without having a chance to look at all the information thoroughly. Councilmember Bolkcom agreed. Councilmember Barnette said he would also be more comfortable with that option. It would give the County a chance to review the information. MOTION by Councilmember Bolkcom to affirm the value of the property located at 7300 University Avenue at $637,800. Seconded by Councilmember Barnette. Councilmember Saefke agreed that it would be better to go through the County. Mayor Lund said that independent appraisals are an effective tool. UPON A VOICE VOTE, COUNCILMEMBER BARNETTE, COUNCILMEMBER BOLKCOM, COUNCILMEMBER SAEFKE, AND COUNCILMEMBER VARICHAK VOTING AYE, AND MAYOR LUND VOTING NAY, MAYOR LUND DECLARED THE MOTION CARRIED ON A 4 TO 1 VOTE. 4. 7685 Main Street NE. Mary Smith, City Appraiser, stated that in the analysis of value, sales of similar buildings were reviewed. The sales approach was also applied and adjustments were made to make the sale properties similar to the subject property. After review of these adjustments, the sales approach indicated a value for the subject property at $939,600 or $54.00 per square foot. Ms. Smith said she applied the income approach to this property. Market rents were applied along with the area vacancy rate which was also obtained from Colliers Turley's year-end publication. In doing so, a value of $925,600 or $53.20 per square foot was determined. Ms. Smith stated that after consideration of the sales and applying both approaches to value, it is recommended to the Board to affirm the 2008 estimated market value of $885,000 or $50.86 square foot. Mary Anderson, property owner, said she had an appraisal on this property as well, from the same appraiser. Mayor Lund commented that this appraisal was not much different and he would be more favorable with staff on this one. This property is still on the low side of the averages compared to the other properties. BOARD OF APPEAL AND EQUALIZATION MEETING OF APRIL 28, 2008 PAGE 6 Councilmember Bolkcom suggested that the petitioner take both appraisals through the County process. MOTION by Councilmember Bolkcom to affirm the value of the property located at 7685 Main Street NE at $939,600. Seconded by Councilmember Barnette. Ms. Smith said Anoka County's review process is on June 16 at 9:00 a.m. UPON A VOICE VOTE, COUNCILMEMBER BARNETTE, COUNCILMEMBER BOLKCOM, COUNCILMEMBER SAEFKE, AND COUNCILMEMBER VARICHAK VOTING AYE, AND MAYOR LUND VOTING NAY, MAYOR LUND DECLARED THE MOTION CARRIED ON A 4 TO 1 VOTE. MOTION by Councilmember Bolkcom to adjourn the Board of Appeal and Equalization meeting. Seconded by Councilmember Saefke. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY AND THE MEETING CLOSED AT 7:37 P.M. Respectfully submitted by, Krista Monsrud Scott J. Lund Recording Secretary Mayor