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Home My WebLink AboutTax Court Appeals PowerPoint a \ ` TA� COURT APPEALS . .� Tax Court Appeals • Process Overview • Historical Petition Volume • Case Study Examples • Recent Changes to the Process • Challenges • Options • Cost Breakdown . .z 1 : � 2012 Petitions by Jurisdiction and Property Type PropertyType Township Belle Jordan E1koNew New priorLake Savage Shakopee Total Plaine Market Prague ResidenHal 11 0 2 2 0 5 3 2 ZS Agricultural 2 2 0 0 0 0 0 1 5 Commercial/Industrial 8 1 3 1 3 7 27 61 117 Multifamily 0 0 0 0 1 2 1 6 ]0 Total 21 3 5 3 4 14 37 70 151 • •3 Petition Comparison ■ Pay 2008 ■ Pay 2009 ■ Pay 2010 ■ Pay 2011 ■ Pay 2012 5 � 39 411 2379 252 U94 1R8 HZB 1 g ,�U31 902 R38 §97q63 SSZ530542 611 �� 42� .._...� . .. . ___s� 27280275 197 56 9313993 91 213 76 742165 177 151 138 Anoka I� Carver � Dakota _ Hennep�n R�se �',. $ooH i Washington Totals , -7(N7'Y � -2% 2% - 13i 7% -15h. � -2% -7IXP/ � 2 TOWNHOME COMPLEX IN SHAKOPEE Property Information: • Rental Townhomes � : • 152 Units • Built in 1998-99 • Located in Shakopee � q - ,� a � ,� ��:� �:?:�' Dates of Valuation 8 Market ',,,. ? Value • January 2, 2009 - $14,550,000 � • January 2, 2010-$14,000,000 ° . ,;;« - Petitianer's Appraisal: • January 2, 2009 -$11,600,000 • January2,2010-$10,600,000 Judge's Decision: Caunty's Appreisal: • January 2, 2009 - Decrease from $14,550,000 to $13,378,000 • January 2, 2009 -$14,650,000 • January 2, 2010 - Decrease from $14,000,000 to $12,815,000 • January 2, 2010-$14,000,000 Refund Difference in Real Estate Taxes for Payable 2010 & 2011: County's Final Offer: • Petitioner's Counter Offer =$60,079 • January 2, 2009 -$13,500,000 • County's Final Offer = $29,265 • January 2, 2010 -$13,000,000 • ludge's Decision = $33,676 Petitioner's Counter-Offer: • Appreiser Wages/Benefits = $9,000 • January 2, 2009 -$12,550,000 • Property owner dismissed petitions that were set for date • January 2, 2010 -$11,800,000 �ertain in other metro counties • •5 APARTMENTS IN SHAKOPEE Property Information: • Senior Independent Living • 66 Units = • 6 Story Building �,y ' �}� � � ° � • Bwit in 1981 ^ i � ar"�� - .. � w.# . � . .. • Located in Downtown Shakopee -• �� '� ;. ; .� � ptl�€ � 4' � � �i;: Dates of Valuation & Market ��,,,, .-;� ` x f Value ° � • January2,2005-$2,570,000 •N�� ;,, ,,,.,. • January 2, 2006-$3,233,400 ^-.�^.�- Petitioner's Appreisal: • January 2, 2005 -$1,100,000 ludge's Decision: • January 2, 2006 -$1,190,000 ' January 2, 2005 - Increase from $2,570,000 to $3,300,000 • January 2, 2006 - Increase from $3,223,400 to $3,300,000 County's Appraisal: Difference in Real Estate Taxes for Payable 2006 & 2007: • January 2, 2005 -$3,300,000 • Petitioner's Appraisal = $18,715 • January 2, 2006 -$3,300,000 • Actual Tax Bill = $47,338 • ludge's Decision = $53,945 County's Position: • petitioner's owed the County an additional ±$6,600 in real • No changes - market value should estates taxes, plus costs for their attorney and appraiser be higher for both years • Appraiser Wages/Benefits = $5,000 Petitioner's Position: • Property owner settled a pending date certain petition • Not willing to dismiss amth W� ight County on a s�milar property for a nominal • •b 3 t STRIP MALL AND GAS STATION IN SAVAGE Property Information: • Retail Center/Convenience Store � �� • Built in 1987 �� • Lotated in Savage �' �"^ � '�� Dates of Valuation 8 Market Value '`"' ��LS • Janua 2, 2008- 4,306,800 t'�r��„-.r;<._.- �Y $ cam�� : • January2,2009-$4.350,000 ''� IDAS CLEa1ER: • January 2, 2010-$4,050,000 Petitioner's Appraisal: °°'�� , .� • January2,2008-$3,660.000 ,.r�� +- • January22009-$3,190,000 +�� 1 �w"`^ • January 2, 2010 - $3,190,000 County's AppraisaL• _ • January2,2008-$5,100,000 ludge'sDecision: • January 2, 2009—$4,350,000 • lanuary 2, 2008 — Increase from $4,306,800 to $4,690,000 • Januory 2, 2010— $3,550,000 • lanuary 2, 2009 — Decrease from $4,350,000 to $3,937,000 County's Final Offer: • lanuary 2, 2010 — Decrease from $4,050,000 to $3,407,000 • January 2 2008— No Change/bismiss Refund Difference in Real Estate Taxes for Payable 2009, 2010, & 2011: • January 2, 2009 —$3,800,000 • Petitioner's Counter Offer = $82,426 • January 2, 2010—$3,200,000 • County's Final Offer= $48,998 • Judge's Decision = $24,401 Petitioner's Counter-OHer: • January 2, 2008 —$3,700,000 . Appraiser Wages/Benefits = $10,000 • January 2, 2009 - $3,400,000 • January 2, 2010 - $3,200,000 • •7 Recent Changes • 3 Tax Court Judges o Three new judges within the past 12 months o One judge retired, one transferred to another courf, one removed • Trial Dates o Used to have specific trial dates set o Now we have "trial ready" windows of time • Process Change . .8 4 Example: Case Timeline .ya �� .'�'� �q � � � a�� s a`` v Q� �r� .�' o�' Cootinentai Maehines � � Trial Prep 01/02 O1J28 02/18 03/04 04/81 3-4 Week Trial 06/17 No[ice From Judge 03/11 Caurt Docs Oue Exhibiu W tness Li st �ti p W acion F�ndingstConctusio�s Fre-Tria( Srief • •9 Options • No matter the solution, the ability to outsource appraisal and attorney services at a shared cost is critical 1. Change approach in defending against Tax Court appeals. 2. Outsource o Hire "Fee" appraisers to perform appraisals when needed and serve as expert witnesses during trial. o Is an appraiser available at the time needed? o How does the appraiser's value opinion differ from the assessor's? 3. Hire additional staff 5 � Cost Breakdown • Hire two additional commercial appraisers % of Petitions 1 � .:;; AREA Z011 2022 �' 2YR AVC� Approx Cost TWP 4% 14% 9� $12,285 BP City 3% 2% 2% $3,497 Jordan 2� 3�0 3% $3,585 Efko New Market 1� 2% 2% $2,235 New Prague 4% 3�0 3% $4,382 Prior Lake 13% 9% ll% $15,757 Savage 25% 21% 23% $32,067 Shakopee 49°l0 46% 47% $66,592 TOTAL '.° '; 100.Q%► ; 100.090 ` 100.096 ' $140,400 '; COUNTY $35,100 OVERALL $175,500 . .n Questions -� 6 , ��:: � y �� .�.. �. �. �, LOCAL BOARD OF APPEAL 8� E UALIZATION � •13 Diff erences between LBAE and Open Book • Local Board o Formal presentation to the city council & often with an audience present o Specific time and date for appeal to be heard o If additional information is needed, a second meeting date is required o Decisions on all appeals must be made before adjourning • Open Book o Informai o Flexible scheduling . .ta 7 .� Benefits of an Open Book • To the Property Owner o No appointment needed o Property information can be verified and corrected o Less intimidating than a board meeting o Need not "presenY' in front of friends and neighbors o Questions and concerns can often be resolved immediately o Very efficient • To the Local Board o Saves time for board members & no need for training o Eliminates the need for members to be familiar with real estate market o Avoid confrontational situations with constituents • To the county o Allows for the immediate consideration of issues o Efficient because it allows the county to consolidatejurisdictions into one meeting • .is Who is using LBAE? Who is using Open Book? • Carver County 0 1 1 cities - all are open book 0 10 townships - 5 are open book, 5 are local boards • Dakota County 0 21 cities- all are open book 0 13 townships - 7 are open book, b are local boards • SCOff COUnty 0 8 cities - 6 are open book (Prior Lake and Belle Piaine are local board) 0 1 1 townships - all are local board • •tb g Things to Consider • Another option is to consider a speciai board to hear appeals and make decisions. The County Board of Equalization is a special board made up of real estate professionals. • If the council decides to pursue the open book option, formal notice must be provided to the county by December 1 for it to take effect the following year. . .n Questions � //�',/` � l / ` � � � � �� l� ��, � � 9