HomeMy WebLinkAbout9A - Board of Appeal & Equalization
MEETING DATE:
AGENDA #:
PREPARED BY:
AGENDA ITEM:
DISCUSSION:
ISSUES:
FINANCIAL
IMPACT:
ALTERNATIVES:
May 21, 2001 ~
9A <)1'
Frank Boyles, City Manager K
CONTINUATION OF THE BO D OF APPEALS AND EQUALIZATION
Introduction
The purpose of this agenda item is to have the City Council act upon the six
appeals received at the May 7,2007, meeting and to affirm the remaining
valuations throughout the community.
Historv
The City Council has elected to act as the Board of Appeals and Equalization.
On May 7,2007, the Council met as the Board and heard six appeals from
property owners. The County Assessor and his staff have evaluated each
appeal.
Current Circumstances
Attached is a report prepared by the Scott county Assessor's office with respect
to each of the six appealed valuations. Each report includes an analysis and
recommendation regarding the proposed valuation of the property.
Conclusion
The Council should consider each report and determine whether it desires to
affirm the Assessor's recommendation.
The only issue before the City Council acting as the Board of Appeals and
Equalization is the valuation of the property on January 2,2007. Does the Board
believe that the value placed on the six properties that have appealed their
valuation is accurate based upon the information provided in the Assessor's
reports? If so, the Council should affirm the valuations. While the council is
certainly sensitive to the relationships between valuation and property taxes, this
is not a rationale for recommending modification of the valuation amounts. Once
the Council has addressed the six properties for which an appeal has been filed,
it would be appropriate to affirm all other valuations made by the County
Assessor's office.
There is a relationship between property valuation, classification and property
tax. The adjustments contemplated in the six appeals will not have a significant
impact upon City revenues.
1. Motion and second to approve the valuation recommendations for the six
properties for which an appeal was filed.
2. Motion and second to approve the valuations for the six properties with
modifications.
3. Motion and second to affirm the remaining 2007 valuations.
RECOMMENDED Either alternatives one and three; or alternatives two and three.
MOTION: www.cityofpriorlake.com
Phone 952.447.9800 / Fax 952.447.4245
Follow up report for the 2007 Prior Lake Board of
Equalization
Appeal 1: Julie David........... ... ...... ........... ... .......... ... .......... .... ..2
Appeal 2: Jeff White.. ..... ... .......... ... ........ ... ... ....... ... ..... ....... .....4
Appeal 3: Southlake Village, David Chromy...................................6
Appeal 4: Lynn Quam... .............. .......... ... .......... ..... ....... ....... .....9
Appeal 5: John Myser.... .... ......... ......... ..... .......... ..... ...... ...... ...11
Appeal 6: Ken Boyles........................................................... ...13
Appeal 1: Julie David, 25-047-0100,14958 Pixie Point Cir SE
Lot Information: 100 Ft of Lakeshore - 0.28 Acres
Building Information: The original structure was a 1,006 sq. ft. Rambler constructed in
1958. An addition was constructed in 2003 bringing the total sq. ft. to 1,906 above grade
and 800 sq. ft. of basement finish.
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Background information:
2006 EMV: $637,900
2007 EMV: $658,000
Julie is contending that her EMV for 2007 represents a value which is higher than
she could actually sell the property for.
An inspection was conducted at Julie's property on May 9, 2007. After the inspection a
comparison grid was put together comparing the subject property to sales that occurred
on Prior Lake in 2006. The Final estimate of value as of January 2, 2007 came to
$700,000.
The property at 14968 Pixie Point Cir SE that Julie used in comparison to hers is an
active listing and not a sale. It is currently listed at $677,500 and has been on the market
for 18 days as of May 14,2007. The property has approximately 4,013 total finished sq.
ft. and was constructed in 1977. This property, however, is a twin home that shares
approximately 100 feet of lakeshore with the neighboring twin home. In addition there is
a portion of the property which is subject to use by a neighborhood group of easement
holders to swim, fish and maintain one dock with up to 6 slips. This would not be
considered a good comparable property to the subject.
I spoke with Julie on May 14, 2007 and informed her that I would be recommending no
adjustment be made to her 2007 EMV. She still had concerns that she could not sell her
property at that value.
Recommendation: After inspecting the property and reviewing sales of lakeshore
property the 2007 EMV is supported and should not be adjusted.
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Appeal 2: Jeff White, 25-026-0010
Lot Information: 50 Ft of Lakeshore - 0.10 Acres
Building information: There is currently no dwelling on the lot. There is a deck on the
lot valued at $1,500.
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Background information:
2006 EMV: $226,500
2007 EMV: $236,500
2006 Classification: Seasonal Residential Recreational Non-Homestead
2007 Classification: Seasonal Residential Recreational Non-Homestead
The owner of this parcel is listed as Leisure Living. Jeff White attended the meeting
on behalf of Leisure Living and was contesting the valuation and classification for
the 2007 assessment.
The classification of the property is not in question. Minnesota State Law requires that a
parcel be classified according to its use. This property is being used for seasonal
recreational use. The law does not require that a parcel be improved with a home or
cabin to receive this classification.
The valuation of the property is consistent with lots of similar size and frontage located to
the north of the subject. In exchanging emails with the City of Prior Lake's planning
department the lot does not appear to conform to the lot area and width requirements to
be considered a buildable lot at this time. However, with variances it appears that this lot
could be approved to have a dwelling built on it in the future. The city suggests that if
the owners would like to identify this as non-buildable that some type of legal notice be
made for the property perhaps in the deed, so that it remains non-buildable in the future.
The lot value does fall in line with similar lots in the neighborhood and can be supported
by the market as of the assessment date. The classification is supported by Minnesota
State law.
Recommendation: I recommend that the board affirm the valuation of $236,500 and
classification of Seasonal Residential Recreational N on- Homestead.
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Appeal 3: Southlake Village, 25-902-0210
Building information: The former Priordale Mall. One level shopping center with both
interior and exterior tenant spaces. Gross Building Area is 81,229 sq. ft.
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Background Information:
2006 EMV: $2,809,800
2007 EMV: $8,137,100
The current owners purchased the property in 2003 for $2,650,000. At that time it was
largely vacant and in poor condition. The buyers have invested considerable amounts of
time, energy, and money to refurbish the entire property.
In November, 2004, Village Market moved in as the "anchor tenant". Over the next two
years, the majority of the Mall's available space has been leased.
Mr. Dave Chromy (owner of the Village Market) appeared on behalf of this property's
owners and tenants.
After Mr. Chromy's presentation and our response, the Board has asked us to answer two
questions: is the property correctly valued for the January, 2007 Assessment Date, and;
what is the rationale for the sharp increase in one year?
On May 11,2007, Brian Connors met Mr. Chromy at the property for inspection and
discussion.
1) Is the value estimate accurate?
We have reviewed available sales information, and find that the prices paid for other
multi-tenant retail properties in Prior Lake indicate that the January 2, 2007 value
estimate for the subject is reasonable and supportable.
- The subject's estimated market value for the January 2, 2007 Assessment date is
$100.18/SF Gross Building Area (GBA).
-The "Gateway Center" (Snyder's strip mall), sold in January, 2007 for $107.83/SF GBA.
-The "Northgate" Center" (south of Highway 13 and Franklin Trail) sold in September,
2006 for $98.21/SF GBA.
- The former "PDQ" strip center near the southwest comer of CR 42 and Highway 13 sold
in January, 2007 for $144.43/SF GBA.
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We next reviewed all sales of similar multi-tenant retail and retail/office that occurred
over the past several years in Prior Lake, Savage, and Shakopee.
25-174-002-0 NEIGH SHOPPING CTR 1979 01/26/07 $2,735,000 25,364 $107.83
25-194-009-0 NEIGH SHOPPING CR 1983 01/31/07 $1,650,000 11,424 $144.43
25-936-008-0 SHOPPING CR/OFFICE 1998 09/01/06 $1,494,200 15,214 $98.21
26-093 -00 1-0 SMALL STRIP CENTER 1983 1 % 1/04 $1,925,000 13,256 $145.22
26-093 -00 1-0 SMALL STRIP CENTER 1983 1 % 1/04 $1,778,000 13,256 $134.13
26-143-001-0 SMALL STRIP CENTER 1996 11/11/04 $1,421,000 9,840 $144.41
26-164-052-0 SMALL STRIP CENTER 2000 OS/23/05 $1,100,000 7,080 $155.37
26-930-001-2 RETAIL 1975 OS/21/04 $900,000 8,000 $112.50
27-278-001-0 COMMUNITY SHP CTR 1999 03/31/06 $16,002,621 103,629 $154.42
25-902-021-0 SUBJ - SOUTHLAKE 1975 N/A N/A 81,229 $100.18
These sales reinforce our value conclusion for the subject property.
2) What is the rationale for such a large one-year value increase?
On January 2, 2006, the subject was in the final stages of refurbishment, and had rapidly
leased up a lot of space in a short I-year period. Given the subject's troubled history, we
concluded that a prudent prospective buyer would be cautious in evaluating future
prospects. That caution could be expected to affect marketability and value.
We also noted that there had been no recent comparable sales within the city of Prior
Lake during 2005 (see the above list).
Without a stronger track record, and with no comparable sales in Prior Lake, our value
estimate for the 2006 Assessment Date was therefore conservative. Hindsight could
allow one to contend that a larger increase would have been justified, but the lack of
available data at that time means that a larger increase would not have been as easily
understood, and would have been less defensible.
At the beginning of 2007, the subject had enjoyed a second straight year of stable
occupancy, and 3 comparable sales were now available. We were thus able to accurately
estimate the subject's most probable market value as of the January 2,2007 Assessment
Date. Although it is a large increase, it is supported by the market.
Recommendation: We recommend that the 2007 EMV be affirmed.
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Appeal 4: Lynn Quam, 25-297-0340, 14508 Wilds Pkwy NW
Lot Information: 0.53 Acres - Golf Course View
Building Information: The home is a custom designed rambler built in 2000. Above
grade living area is 2,728 sq. ft. Below grade finished area is 1,950 sq ft.
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Background information:
2006 EMV: $654,300
2007 EMV: $650,000
The Quams are contending that the EMV for 2007 represents a value which is
higher than they could actually sell the property for.
An inspection of the property was conducted during our annual review on August 7, 2006
by John Greenwood, an appraiser for the Scott County Assessors office. After reviewing
all of the current information an EMV of $699,600 was initially placed on the property
for the 2007 assessment. After sending out notices of valuation we received a call from
Jason Quam stating that he thought the valuation was too high. After comparing the
property to sales of similar properties in 2006 the EMV was reduced to $650,000. This
value still seemed too high to the Quams, prompting Lynn Quam to appear at the local
board.
Lynn used two sales that she believed were comparable to her property. The first was
located at 2831 Pine View Dr which sold for $525,000 on February 8, 2007. The home is
a modified 2-story style home; the sale occurred after the assessment date and was sold
after the property was foreclosed upon. This is not a good comparable sale. The second
property located at 2844 Fox Run NW sold for $635,000 on May 24,2006. This property
is also a modified 2-story style home. In speaking with Jason he was under the
impression that this property had 6,876 finished sq. ft. when in actuality it has 4,522
finished sq. ft. This property is not considered to be a good comparable.
I spoke with Jason on May 11,2007 and informed him of what I had found regarding
these two sales. He was agreeable to the value of $650,000.
Recommendation: After inspecting the property and reviewing comparable sales of
similar properties, the 2007 EMV of $650,000 is supported and should not be adjusted.
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Appeal 5: John Myser, 25-195-0010
Lot Information: 110 Ft of Lakeshore - 0.32 Acres
Building Information: The structure is a 1928 built rambler totaling 900 sq. ft. of above
grade living area. There is currently no finished basement area on record.
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Background information:
2006 EMV: $465,900
2007 EMV: $472,400
John has never actually questioned the EMV placed on his property but did want to
talk about what changes had been made to land values in his neighborhood.
I spent about 45 minutes on the phone with John explaining what changes were made to
neighboring values for the 2007 assessment. We then set up an inspection for the
property scheduled for May 10,2007. I received a message from John the morning of the
10ili stating that due to a family emergency he would have to re-schedule the
appointment. John said he would call me when he had a chance to re-schedule. As of
May 15,2007 I have not spoken with John again.
John purchased the property May 6, 2003 for $395,000. Our current valuation represents
an approximate increase of 19.5% above the 2003 sale price. No known improvements to
the property have been made since the 2003 purchase.
Recommendation: Without being able to inspect the property and being that the
valuation was never actually questioned, I suggest that the board affirm the 2007
valuation of $472,400.
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Appeal 6: Ken Boyles, 25-348-0010,15358 Breezy pt Rd SE
Lot information: 180 Ft oflakeshore - 0.40 Acres
Building information: The structure is a Two-Story style home built in 2002 totaling
3,636 sq. ft. of above grade finished living area. The home does not have a basement
area but does have a crawl space for storage.
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Background information:
2006 EMV: $666,400
2007 EMV: $746,600
Mr. Boyles is contesting that his valuation for the 2007 assessment is too high,
specifically the land value of $386,000.
Over approximately three weeks leading up to the first LBOE meeting I have been in
contact with Mr. Boyles through numerous phone calls, emails, a meeting in our office
with Bob Schmitt the County Assessor and a visit to the property on May 7,2007.
The initial 2007 EMV placed on the property was $780,500. After the inspection,
changes were made to the amount of usable lakeshore feet and building information
including actual square footage. The changes resulted in a revised EMV for the 2007
assessment of $746,600. Mr. Boyles never actually questioned the new value to my
recollection; however he did want more information on exactly how the land valuations
are arrived at.
In speaking with Mr. Boyles after the meeting I informed him that this year alllakeshore
property is scheduled to be reviewed through field inspections and then completely re-
appraised including land and buildings. After this work is completed I am confident that
I will be able to provide Mr. Boyles with more detailed information on the new process
that we will have used for the 2008 assessment.
Recommendation: After reviewing the most comparable 2006 sales available, a higher
value could be supported. I recommend that the board affirm the 2007 EMV of
$746,600.
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