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HomeMy WebLinkAbout1993 04-19 CCM Board of Equalization E MINUTES OF THE PROCEEDINGS OF THE CITY COUNCIL OF THE CITY OF BROOKLYN CENTER IN THE COUNTY OF HENNEPIN AND THE STATE OF MINNESOTA BOARD OF EQUALIZATION APRIL 19, 1993 CITY HALL CALL TO ORDER The Brooklyn Center City Council met as the Board of Equalization and was called to order by Mayor Todd Paulson at 7:00 p.m. ROLL CALL Mayor Todd Paulson, Councilmembers Barb Kalligher, Dave Rosene, Celia Scott and Kristen Mann. Also present were City Manager Gerald Splinter, Hennepin County Appraisal Supervisor Bob Hanscom, and City Assessor Mark Parish. PURPOSE OF THE BOARD OF EQUALIZATION The City Manager explained the purpose of the City Council was to act as the Board of Equalization and act as an appeal board to the Assessor's setting of values and classifications. The assessment is not based on taxes, but on the market value of the properties as compared with similar properties. Once the local board acts, the assessment is forwarded on to the County. CITY ASSESSOR'S REPORT The City Assessor explained that the Board of Equalization is established by State law and City Charter. Notices were published in accordance with law. In addition to the published notice, each property owner received a 1993 value notice indicating the 1993 market value. This notice was either included with the 1993 homestead card or, for properties that are non - homestead, value notices were mailed late March and early April. The Assessor went on to describe the tax system and how different classes of property have different tax rates as prescribed by law. The Assessor is responsible for placing market value on property. The Board of Equalization meeting is to review the assessment, values and property classifications. The Board has the power to decrease, affirm, or increase a market value or to change a classification. The Assessor indicated that the 1993 values and classifications will become the basis for the 1994 payable taxes. In order to arrive at the 1993 values, the Assessor and staff reviewed sales from October 1991 through September of 1992. Through the use of the computer aided appraisal system, all properties were reviewed and market values determined. 4/19/93 -1- PUBLIC INQUIRY REGARDING ASSESSMENT Gary Brummer - River Glen Apartments Gary Brummer, owner of River Glen Apartments, 407 70th Avenue North, appeared before the Board. He indicated that he felt the market value placed on his property was excessive as all repairs and improvements to the r have n n completed. He has t P o a e of et bee u P P property Y approximately $109,000 of improvements into the property; however, there are still improvements to be made and hopefully there will be no major problems or expenses in the near future. Mr. Brummer indicated that his profit per year is around $4,000 - $5,000 and the resulting tax based on the value will exceed $12,000, which would result in a $8,000 - $9,000 per year deficit. City Assessor Parish praised Mr. Brummer's efforts in renovating /upgrading the property. He also indicated that this property was a depressed property that has turned around because of Mr. Brummer's efforts. He indicated that he believed the property has become stable and, therefore, the market value should reflect that. He reminded the Council that staffs responsibility is to place fair market value on property. Based on the income and expense information he had on this property, he would ask that the Council affirm the 1993 market value of $2,560,000. The Council discussed the improvements made to the property and the value per unit of $20,000 and whether or not that was fair value. It was suggested that the property be valued at $19,000 per unit as there are still repairs to be made to the property and that the project did not reach its current occupancy rate until late in 1992. The Council also inquired of the County representative what would happen if Mr. Brummer went to the County Board. Mr. Bob Hanscom stated that an appraisal would be made for use at the County Board. Depending upon the results of that appraisal, the value of the property for 1993 would either be decreased, affirmed or increased. He also felt that staff s recommendation of $20,000 per unit was in line when compared to other similar properties. Following this discussion, a motion was made by Councilmember Scott, seconded by Councilmember Kalligher, to lower the per unit value from $20,000 per unit to $19,000 per unit for a total 1993 market value of $2,432,000. Motion passed unanimously. Helen Peltier - 6506 Willow Lane Helen Peltier, 6506 Willow Lane, appeared before the Board. Ms. Peltier felt the value placed on her property was excessive. She indicated that she purchased the property in May, 1991 for $124,900. At that time the assessor's value was $123,700 (1991 value). In 1992, the value decreased to $108,300 and now in 1993, it was increased to $125,300. She felt she could not sell the ro rt today for more than what she aid for i in 1 at o t 99 1. P Pe Y Y P City Assessor Parish briefly reviewed the staff report for this property and explained that each year, values are determined based on information available. In 1992 there were a couple of sales that troubled staff. As a result, market values were decreased. In 1993, there were additional sales and the analysis of those sales and the other information available indicated that 4/19/93 -2- an increase in market values was warranted. Ms. Peltier's property has been reviewed and a report prepared which also included some adjustment for location based on the apartment influence across the street. The report recommended that the 1993 market value of $125,300 be affirmed. Councilmember Rosene asked Ms. Peltier what she felt the value of her property was. Ms. Peltier felt that she could not sell it for more than what she paid in 1991 ($124,900) so that must be the value. There was a motion by Councilmember Kalligher, seconded by Councilmember Rosene, to decrease the 1993 market value from $125,300 to $124,900. Motion passed unanimously. Robert Nechal - 5332 Russell Avenue North Mr. Nechal, 5332 Russell Avenue North, appeared before the Board concerning the 1993 market value placed on his property. He indicated that he has contacted and worked with staff as well as contracted for an independent appraisal. Mr. Nechal requested that any action on his appeal be postponed or deferred until such time as he receives the written appraisal and can review it with staff. He indicated he is confident that the issue can be resolved and if not, he can go on to the County Board. Mr. Nechal went on to report that he received a verbal figure from the appraiser of $105,000 which would be lower than the value recommended by the Assessor. City Assessor Parish indicated that a review of the property was made and the value placed on the property was fair and the report recommended that the 1993 value of $116,000 be affirmed. Staffs recommendation was based on 3 sales of double bungalows within 60 days in the area of Mr. Nechal's property. However, staff will prepare a recommendation based on review of the appraisal Mr. Nechal will receive later this week and asked that this property be deferred until the Board can reconvene next Monday. There was a motion . by Councilmember Rosene, seconded by Councilmember Mann to defer action on this appeal until the Board reconvenes on Monday, April 26, 1993. Staff is to work with Mr. Nechal and bring a recommendation to that meeting. Motion passed unanimously. Change in order of Agenda There were two appointments before the Board where the owners have not yet arrived. It was determined to postpone these two appeals until the end of the meeting to allow time for the owners to appear. These properties were Thomas Gladwin, 6512 Willow Lane and Michael Haase, 5330 -28 Queen Avenue. Jeanne Peterson. 5441 71st Circle Ms. Peterson, 5441 71st Circle, had signed in to appear before the Board. However, she was not present to address the Board. Staff indicated that she had general questions regarding market values and taxes and those questions were answered earlier in the evening, but that she may continue to stay for general interest. 4/19/93 -3- Bartholomew Dabrowski, 5001 Ewing Avenue North Mr. and Mrs. Dabrowski appeared before the Board regarding the property they own at 5001 Ewing Avenue North. They indicated that they purchased the 4 -plex a few years ago for $150,000. Now the value has decreased to $111,300 but the taxes continue to increase. They asked for an explanation of why the value decreased and the taxes increase. Staff indicated that the values were determined based on information available regarding the sales of 4 unit buildings. Mr. Parish also reviewed a portion of his earlier presentation indicating how the tax system works. Unfortunately, just because the value decreases does not mean that the taxes will decrease. Taxes are the result of the local taxing districts and their budgets, the values of property, and the classification system prescribed by statute. Staff indicated that they were unaware that the Dabrowski's would be attending and, therefore, no report was prepared. Staff indicated that it would be their recommendation to offer no change to the 1993 market value. By common consent, the Board indicated that no change in the 1993 market value would be recommended. George Kosmides - Lyn River Apartments Mr. Kosmides, owner of Lyn River Apartments, appeared before the Board. Mr. Kosmides indicated that he was upset over the tax situation that exists on his property. He indicated that the value for the 1993 payable taxes is $1,512,000 and the value for the payable 1994 taxes decreased to $1,435,000. Mr. Kosmides would like to have the payable 1993 lowered. Mr. Kosmides went on to say that he has had many problems with the tenants and repairs to the buildings. The property is experiencing a 22 -30 unit vacancy rate, a deficit of $6,000 - $8,000 per month. Mr. Kosmides indicated that he has attempted to market the buildings, and in fact, sold it a couple of years ago for in excess of $2 million. However, that contract defaulted and he received the property back in a depressed state. City Assessor Parish informed the Board that staff was unaware that this property would be in appeal and, therefore, no report was prepared. Mr. Parish indicated that he has met with Mr. Kosmides previously to discuss the property and its value and indicated that the 1993 value is based on a value of $17,083 per unit which is the lowest per unit value with the exception of Brookdale Ten which has all one bedroom units and over 100 vacancies. Staff does not feel a reduction in the 1993 value is warranted. Also, if Mr. Kosmides wishes to appeal the 1993 payable taxes, his only form of appeal would be through the Tax Court, as the Board can only take action on the 1993 assessment for taxes payable in 1994. Mr. Kosmides stated that he was disappointed as he was told by an associate of his that he was encouraged not to attend tonights meeting as appealing the market value would not be beneficial to him if he is trying to sell the property to the City. City Assessor Parish responded that he did receive a call regarding tonights meeting; however, the conversation that took place was not as Mr. Kosmides described. Mr. Kosmides indicated that he would offer the property for purchase by the City at a cost of $18,000 per unit. 4/19/93 -4- There was a motion by Councilmember Mann, seconded by Councilmember Scott to affirm the Assessor's 1993 market value of $1,435,000. Motion passed unanimously. Letter Appeal - Total Petroleum, 6830 Brooklyn Blvd, City Assessor Parish informed the Board that Total Petroleum has appealed the 1993 value by letter. Total provided additional information today regarding their appeal; basically it was information and news articles regarding properties with contamination. Apparently Total is experiencing groundwater contamination at this site as a result of a leak or spill. As of this date, no final orders have been given by the MCPA. Total does not have an estimate of what costs will be incurred for clean up and no sufficient information has been provided to assess the impact as it relates to the 1993 market value. Staffs recommendation is to affirm the 1993 market value and to allow Total to exercise their right to appeal to the Tax Court. There was a motion by Councilmember Kalligher, seconded by Councilmember Scott to affirm the 1993 assessor's market value of $117,000. Motion passed unanimously. Thomas Gladwin - 6512 Willow Lane Mr. Gladwin had made an appointment to appeal the 1993 market value of his property at tonights meeting. As of now, Mr. Gladwin has not arrived. Staff indicated that action should be taken on this appeal so that Mr. Gladwin has is eligible to appeal to the County Board if he wishes to. Staff has reviewed the property and prepared a report and, based on that report, it is staff's recommendation to reduce the 1993 market value from $141,500 to $139,000. There was a motion by Councilmember Scott, seconded by Councilmember Mann to reduce the 1993 market value from $141,500 to $139,000. Motion passed unanimously. Michael Haase - 5330 -28 Queen Avenue North Mr. Haase had made an appointment to appeal the 1993 market value of his property at tonight's meeting. As of now, Mr. Haase has not arrived. Staff indicated that action should be taken on this appeal so that Mr. Haase is eligible to appeal to the County Board if he wishes to do so. Staff has reviewed the property and prepared a report and, based on that report, it is staffs recommendation to reduce the 1993 market value from $113,400 to $95,400. There was a motion by Councilmember Kalligher, seconded by Councilmember Scott to reduce the 1993 market value from $113,400 to $95,400. Motion passed unanimously. APPROVAL OF 1993 ASSESSMENT There was a motion by Councilmember Kalligher, seconded by Councilmember Scott to accept and approve the balance of the 1993 Assessment with the exception of the Robert Nechal property at 5332 Russell Avenue North which is being deferred the Board when it reconvenes on Monday, April 26, 1993. Motion passed unanimously. 4/19/93 -5- ADJOURNMENT There was a motion by Councilmember Scott, seconded by Councilmember Kalligher to adjourn the meeting. Motion passed unanimously. The Board of Equalization was adjourned at 9:25 p.m. Deputy City Clerk Todd Paulson, Mayor Minutes taken by: Kay Manning Assessment Technician 4/19/93 -6-