HomeMy WebLinkAboutDraft 05/03/11 Minutes� Pip
ti
U
\rMv�so'�
4646 Dakota Street SE
Prior Lake, MN 55372
REGULAR CITY COUNCIL MEETING MINUTES
May 3, 2011
CALL TO ORDER
The meeting was called to order at 6:00 p.m. Present were Mayor Myser, Council members Erickson, Hed-
berg, Keeney and Soukup, City Manager Boyles, Finance Director Erickson and Administrative Assistant
Green.
PUBLIC HEARING
Local Board of Appeal and Equalization Hearing
City Manager Boyles explained the appeal process and described the format of the hearing. He also de-
scribed the application forms developed by the County to help residents with the process. Introduced
County representatives Mike Thompson, Daniel Bethke, Jason Heitzinger and Chad Bohnsack.
Mike Thompson provided a PowerPoint presentation describing the assessment process and timeline.
Described acceptable sales ratios and qualified sales that are used when considering property value.
Showed the percentage of sales in 2010 that were foreclosures or short sales noting that such sales are
not considered qualified sales when calculating valuation.
MOTION BY HEDBERG, SECOND BY ERICKSON TO OPEN THE PUBLIC HEARING
VOTE: Ayes by Myser, Erickson, Hedberg, Keeney and Soukup. The motion carried and the hearing
opened at 6:23 p.m.
Comments:
Susan Deladi and John Japs, 2830 Fox Run NW, PID# 252970070 believes their property should be va-
lued in the $580,000 — $610,000 range. Stated it was a foreclosure and short sale and the price had been
reduced three times before they purchased. Provided comparables. Described attributes of home. Stated
that neighbors appealed valuation in the past and currently have valuation at $300,000 less than this prop-
erty. Concerned that villa property should not be used as a comparable.
Hedberg: Asked if the $550,000 sale they were using as a comparable was a short sale.
Deladi: Replied that it was a qualified sale.
Keeney: Asked what, in general, is used for criteria when selecting comparables.
Thompson: Stated they look for similar styles in immediate or similar neighborhoods. In this analysis, the
property was compared to the Wilds. Also tried to compare amenities and quality. Stated that each year
they do matched compared sales and described that process.
Erickson: Asked how the $550,000 was compared to this property.
Thompson: Replied that the assessors did not review it as that was a two -story property and the asses-
sors were seeking ramblers.
Deladi: Believes that a detached villa was used for comparables and does not think that is a comparable.
Monica Costello, 2485 Spring Lake Road SW, PID # 259040150 contacted the County to make an appeal,
but was not in attendance at this hearing.
Mark Bray, 2801 Hawk Ridge Rd SE, PID # 254610150 contacted the County to make an appeal, but was
not in attendance at this hearing.
Phone 952.447.9800 / Fax 952.447.4245 / www.cityofpriorlake.com
Konrad Gastony, 5821 Industrial Lane SE, PID # 254270030 owns commercial property and completed
the appeal form. Has had a telephone conversation with the assessor and stated they came to a mutual
conclusion on value which is stated in the appeal letter from the assessor's office. The value is stated at
$585,000 and that is acceptable to him.
Dana Wheeler, 14126 Orchard Circle NE, PID # 259300500 contacted the County to make an appeal, but
was not in attendance at this hearing.
Nadya Yarmolich, 3650 Foxtail Trail NW, PID # 253850540, stated the property was appraised at
$138,000; purchased for $135,000. Appraisal states the neighborhood has been declining in value for the
past three years. Believes her home is being compared to homes with more square footage, end units and
with more features. State the assessor came to look at the property last Thursday.
Myser: Assured that the information from the assessor will be shared with the LBAE.
Hedberg: Asked when the results of the assessor's visitation will be incorporated into a final recommenda-
tion from the assessor's office.
Thompson: Requested Yarmolich to provide a copy of her comparables to him. Stated the assessor's
recommendation will be submitted to the LBAE in the follow -up report.
Hedberg: Asked whether Yarmolich should contact the County.
Thompson: Replied that the County would contact her to provide a copy of what will be in the final report
as soon as possible.
Keeney: Asked why there would be a wide variation in values within townhome units.
Thompson: Replied that certain floor plans in the plat have upper and lower floors, others have no base-
ment, some have rooms open to the second floor. They are not as uniform as they look on the outside.
Many were commissioned to be built with upgrades.
Erickson: Asked if $135,000 was a foreclosure price.
Yarmolich: Affirmed. Stated her home is currently valued at $220,000 and she believes it should be
$138,000.
Jason Miller, lives at 5406 Nokomis in Minneapolis, owns vacant Prior Lake lakeshore lots in Candy Cove
Park Addition, PID # 250270240, 250270230, 250270250. Believes the lots are being valued at $700,000
as if they are currently buildable, but they are not in their current condition. Purchased June 2010, spent
$30,000 on plans, engineering, etc. to prepare for development. Only two homes will be allowed. Stated
that a road was vacated in the 1970s and the property is landlocked. Believes there is risk of high con-
struction cost, builders cannot get traditional funding so the property is dependent on cash buyers and he is
finding it nearly impossible to sell the property. He is forced to pay the taxes but is unable to release him-
self from the piece of property.
Keeney: Asked if an actual road had been built in the past or was it just the right of way for a road. Asked
whether platted as shown in the drawing and how much shoreline is involved.
Miller: Replied there are 287 feet of lakeshore at 904'.
Keeney: Asked if an easement is needed to access the property.
Miller: Replied there is a City lot that allows an access point, but no easement has been granted for cross-
ing so he has not been granted a title for the property yet.
Keeney: Asked if this property is subject to a pending sale.
Miller: Replied that it is a contract for deed that has been recorded. An easement must be granted by the
City to close on the property and be able to market it.
Erickson: Asked if he is seeking a valuation for the total of the lots.
DRAFT 05 0311 City Council meeting minutes
Miller: Believes the $726,700 valuation would be appropriate after the infrastructure is in and the lots are
deemed buildable.
Erickson: Asked how many improvements were made by January 2.
Miller: Stated that no physical improvements have been made to the site. Money has been spent on engi-
neering fees, etc., which do not add value to the property.
Erickson: Clarified that the property was acquired for $200,000 as the purchase has not been as good of
a deal as he thought it would be.
Hedberg: Reiterated that Mueller hoped to get three lots out of the property, but the City is determining
that it can only be two lots.
Soukup: Commented that there was no access to the property when the previous owner purchased it.
Miller: Affirmed, adding that the City has always stated it would grant easement across its property to al-
low access.
Boyles: Stated that complexity is added by a case that negated possibility for cities to give variances and
there is Court finding that there is no basis to grant variance. Stated that Legislature is trying to prepare a
new Statute and that is what the City is waiting for. This is not a clear situation from a legal perspective and
it is unclear what impact it would have on value.
Linwood Knight, 6586 Harbor Beach NE, PID # 252630080 stated the assessor was at his residence last
week. His is difficult property on which to get good comparables as there is a $300,000 range of assessa-
ble values in the townhouse community. His property has view of the bay. Included properties in his com-
parables to show the value of townhouses that sold compared to assessed values noting that valuations
are $65,000 to $100,000 higher than sales.
Hedberg: Commented that Harbor Beach Harbor is a complicated area because most sales in last two
years have been distressed sales.
Soukup: Asked what the assessed value is.
Knight: $554,100.
Keeney: Suggested the form be revised to show the owner's assessment vs. the County's deadline. Cla-
rified that Knight's main point is that land values vary based on whether or not the property is facing or not
facing the water.
Knight: Affirmed adding that if comparables are only taken from the allowed time frame, it is difficult be-
cause the properties compared to are not facing the lake.
Thomas Nguyen, 15750 Hwy 13 So, PID # 259360106 stated he bought the property in 2008 for $548,000
and the tax was $10,480 at that time. Taxes have since increased and he believes it is because it is valued
too high. Stated he has an appraisal completed by a bank in 2010 which valued the property at $440,000.
The building was valued at $400,000 and the remainder was for equipment.
Soukup: Asked if the purchase appraisal was just for the building, or both the building and the equipment.
Nguyen: Stated he does not know that, but the current assessment is for the land and property, not the
equipment.
Hedberg: Asked if the 2010 appraisal was shared with the assessors.
Bohnsack: Stated they received a copy of the appraisal this morning. Noted that the valuation for this
year is at $460,000 for 2012 taxes.
Hedberg: Stated he would be interested to see what analysis the assessors bring and suggested that
Nguyen stay in contact with the assessor's office to learn what they will be recommending.
Erickson: Asked if there will be an inspection of the property.
Bohnsack: Affirmed.
Keeney: Asked if there distinction between equipment and fixtures as far as comparables or sales history.
Bohnsack: Replied the assessors just look at land and anything fixed to the land.
3
DRAFT 05 0311 City Council meeting minutes
Keeney: Commented that taxes went up dramatically in 2009 and asked if the assessors know why.
Bohnsack: Replied that is when the entire City was revalued and there were dramatic changes to com-
mercial property.
Thompson: Commented that the 2010 appraisal is $450,000 and that does not include equipment.
Hedberg: Asked what the assessment was in 2010 for 2011 taxes.
Bohnsack: Replied it was $480,000 with a recommended reduction to $460,000 for 2012.
Brian Soderholm, 5290 Frost Point Circle, PID # 250600040 stated his property is currently valued at
$1,157,500. Has been trying to sell the property for over a year and has reduced the price to $899,000.
Current proposed taxes are $16,800. Provided comparables. Described the property. Feedback from po-
tential buyers is that it is at the right price, but the current taxes are scaring them off. Believes assessed
value should be around $850,000.
Hedberg: Asked when the assessors received the information from Soderholm.
Thompson: Stated that assessors inspected the property yesterday, but have not yet put together a com-
parable sales grid.
Soukup: Noted there is over 4,000 square feet in the home. Will be interested in findings.
Keeney: Asked if a market value analysis was done by a realtor.
Soderholm: Yes, but not a full appraisal.
Keeney: Asked what the assessed value was in 2010.
Soderholm: $1,184,000 in 2010 and $1,150,000 in 2011.
Erickson: Asked when the home was last inspected by assessors.
Thompson: Replied they may have been out in 2008, but is unsure if they inspected the interior.
Soderholm: Commented on homes that have similar taxes but much greater valuation stating he does not
understand how they get to the numbers.
Myser: Stated that the County will be able to provide those answers.
George Holden, 5160 and 5200160th Street SE, PID # 259360060, 259360070, contacted the County to
make an appeal, but was not in attendance at this hearing.
Brad Rotham,16535 Tranquility Court SE, PID #253780030, stated he is representing Mesenbrink Con-
struction for Creekside Communities. Stated he has provided some information to reassess the value for
2012. Believes they will be able to resolve the disparity and wanted to be on record that he believes the
valuation is high and is requesting the County to look at it.
Jian Tang, 14289 Dove Court, PID # 253680130, stated last November the valuation was $251,000. Be-
lieves the valuation should be less. Stated his house has the smallest footage in the neighborhood. Invited
assessors to inspect his house. Commented on quality issues.
Myser: Stated this hearing cannot help the property owner with the builder and any warranty issues, but he
can appeal his assessed value. Encouraged him to work with assessors.
Keeney: Asked the date of the bank's appraisal.
Tang: November 2010.
Frank Muelken, lives at 15685 Fish Point Road, but is appealing property at 3806 Pershing, PID #
250940280. Stated the house was built in 1950s, is 500 square feet, a single garage, has no basement
and has had some remodeling three to four years ago. Compared it to property at 3832 Pershing which
was built 1960s, has 865 square feet with a garage and full basement. The 3832 property sold for
$143,000 over two years ago with taxes of $1,645. Taxes on his 3806 property were similar and given the
4
DRAFT 05 0311 City Council meeting minutes
difference in size and amenities, believes his property should be about 65% of that one. Requested reduc-
tion in valuation.
Myser: Suggested he meet with assessors and work with them.
Keeney: Asked what the noticed value is for 2011.
Muelken: Replied it is at $143,400; in 2010 was $144,700.
Frank Muelken also spoke for Helen Videen of 5754 Fairlawn Shores, PID # 250310180 who was unable
to attend the hearing.
Thompson: Commented that State Statute allows for someone to have a representative file an appeal for
them, but the standards for doing so are not set out. Stated it is up to the LBAE to say if this request satis-
fies the Statute.
Myser: Advised Muelken to speak with Videen and have her expedite her appeal with the County.
Shad Gordon, representing The Wild's Golf Course at 3151 Wilds Ridge, PID #253300001, 252970740,
253110110, 252970851, 252970850, 252970870, 252970940, 253110130, 252970811, 252970810,
253060090, asked for an interpretation of golf course classification. Stated the Wild's green fees are not
comparable to a municipal golf course and he wants to know what price point to be at to have the golf
course classification. Believes that the fees that are posted for three months of the year should not be the
standard for the full year.
Bohnsack: Stated that the Wild's and the assessor's office have been working together for the past sever-
al months and he is conducting research to determine the specific number.
Myser: Asked if there is any written documentation to make an appeals case.
Gordon: Stated he has filled out the form with a list of other golf courses and their fees. There are only a
handful of courses the golf course classification does not apply to. Stated if the Wild's does not qualify for
an appealed valuation, he would want to know what to do to get to qualify.
Bohnsack: Stated the Statute has a classification called open space and in order to quality for that they
have to be open to the public. They may charge for membership fees or dues, but dues are not required in
order to be able to golf the course. If the Wild's does not meet the criteria for the Statute, the entire course
would be commercial.
Myser: Asked if the classification would apply to all of the parcels.
Bohnsack: Stated that five parcels are exempt from the classification and the remaining parcels are actual
course and maintenance building, etc., which would be the extent to which golf course classification would
extend.
Erickson: Asked if the highest rate of pay is used when determining average rate for playing the course or
if there are ways to use discounted rates.
Bohnsack: Stated he is checking with other counties to see how they are handling it and is working to
come to resolution with how to determine the number.
Gordon: Commented he has seen a decline each year of how many people will pay the "rack" rate and
they have had to compete with discounted rates.
Erickson: Asked if all municipal courses or levels of courses are considered when figuring comparable
rates.
Bohnsack: Replied that the Statute reads it should be the average of municipal courses and that is a diffi-
cult number to pin down.
Erickson: Asked about other courses in Scott County.
Bohnsack: Stated that the Wild's, Legends and Meadows are commercial and all others are golf course
classification.
DRAFT 05 0311 City Council meeting minutes
Keeney: Commented that another aspect would be to understand the municipal courses. Stated his un-
derstanding is that open space classification is used for parks, etc., where land is reserved to be public.
Asked what comparable municipal courses there are in Scott County.
Bohnsack: Replied that Cleary Lake Park is the only municipal course in Scott County and it is a small par
3 course. Stated it is up to the assessor's office to interpret whether to use the rack rate numbers or daily
use rate numbers. Stated he is seeking input from the Department of Revenue.
Hedberg: Asked if Willingers Golf Club is in Scott County.
Bohnsack: No.
Hedberg: Clarified that Stonebrook, Heritage Links and Ridges of Sand Creek qualify for golf course clas-
sification.
Erickson: Asked if the Meadows golf course is taxable.
Bohnsack: Replied that most of the golf course is taxable. Some of the course is on trust land, but the
taxable portion has a commercial classification.
Erickson: Asked which rate would be used if a course has two different rates depending on residency.
Bohnsack: Responded that it would be the highest full rate.
Curt Larson of 3027 Knollridge Dr, appeals the assessed value of six parcels on the northeast corner of 18
and 42, PID # 259240011, 259240012, 259240014, 259240021, 259250022, 259240024. Believes there is
significant information that supports a reduced value.
Keeney: Commented that this is the public hearing opportunity and he might choose to offer the support-
ing information at this time. Stated he had not been provided any basis to ask clarifying questions at this
time.
Larson: Understood.
Hain Ho, 36 -0170th Street SW, PID # 254710010, signed in to appeal, but did not address the LBAE.
Pete Reiker, 15707 Island View Rd NW, PID # 252520070, stated he purchased his home last May for
$684,825. Stated it was assessed for $745,000. Believes it should be assessed more closely to the pur-
chase price. Stated that the next door neighbor's house has just been placed on the market for $669,000
and it is a larger lot.
Myser: Encouraged him to meet with the County and provide any information that will be helpful for them
to assess his valuation.
MOTION BY HEDBERG, SECOND BY ERICKSON TO CLOSE THE PUBLIC HEARING.
VOTE: Ayes by Myser, Erickson, Hedberg, Keeney and Soukup. The motion carried and the hearing
closed at 8:22 p.m.
RECESS
With no further comments from Council members, a motion to recess the meeting to May 16, 2011 at 7
p.m. was made by Keeney, and seconded by Soukup. With all in favor, the meeting adjourned at 8:23 p.m.
Frank Boyles, City Manager Charlotte Green, Administrative Asst.
DRAFT 05 0311 City Council meeting minutes