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HomeMy WebLinkAbout1991 04-29 CCM Board of Equalization MINUTES OF THE PROCEEDINGS OF THE BOARD OF EQUALIZATION OF THE CITY OF BROOKLYN CENTER IN THE COUNTY OF HENNEPIN AND THE STATE OF MINNESOTA REGULAR SESSION APRIL 29, 1991 CITY HALL CALL TO ORDER The Brooklyn Center Board of Equalization met in regular session and was called to order by Mayor Todd Paulson at 7:05 p.m. ROLL CALL Mayor Todd Paulson; Councilmembers Celia Scott, Jerry Pedlar, Dave Rosene, and Philip Cohen. Also present were City Manager Gerald Splinter, City Assessor Mark Parish, Senior Appraiser Joe DaBruzzi, and Board of Equalization Secretary Ann Odden. PURPOSE OF BOARD OF EQUALIZATION The City Manager stated the purpose of the Board of Equalization, indicating state law provided for the City Council to act as the Board. The Board was to provide for equitable assessment of property and building values throughout the City and was the first level of appeal available to citizens. The second and third levels were the County Board and the Minnesota Tax Court, respectively. The Board was to review the assessments brought before it to determine the appropriateness of the assessed values and whether or not the assessor had acted equitably. PROCEDURAL REVIEW OF PROPERTY TAXATION AND CITY ASSESSOR'S REPORT The City Assessor provided a presentation to review the procedure of property taxation. On January 2 of each year, property values are assessed and sales in the past 12 months are reviewed to determine the median ratio. If there have been insufficient numbers of sales of certain properties to determine the median ratio, the window of time in which sales are reviewed is expanded to 24 months or more. The City Assessor stated the City received about 16.5 cents for each tax dollar collected. State law would indicate homes should not be assessed at less than their market value but 90 -105 percent of market value would be an acceptable range. If the City were to 4/29/91 - 1 - go beyond this range, the State or County would provide an across - the -board adjustment. The City Assessor stated the City's median was typically 93 percent and has historically been well within the guidelines. The City Assessor reviewed the trends of market values within the City, noting there had been small increases of four to five percent in certain residential areas, such as along Twin Lakes. Apartment building taxes had decreased from five to fifteen percent in some cases, office buildings were stable or declining as were industrial buildings, and retail property and vacant land were increasing by about five to ten percent. He indicated 25 percent of parcels were reinspected each year. In order to do this, notices were sent to homeowners. In cases where property owners refused to cooperate with reinspections, the City assumed the value. He felt the property valuation in the City was among the most equitable in the metro area. The Board discussed property taxes on apartment buildings and were told the income generated by the building was a factor in determining property taxes, the cost of land and depreciation and market value being the other two factors. Councilmember Pedlar questioned whether apartment owners who failed to maintain their buildings and manage them efficiently were actually being rewarded with lower property taxes. The City Assessor stated the City tried to balance this and not to create a disincentive to maintain. In response to Councilmember Cohen's question, the City Assessor indicated the City would assess a vacant four -plex, for example, by trying to determine why the building was vacant and determine the costs to improve the property to make it habitable. The Councilmembers concurred with the current rules on property taxation as explained by the City Assessor. There was a motion by Councilmember Pedlar and seconded by Councilmember Cohen to accept the Assessor's report. The motion passed unanimously. During the meeting, the City Assessor introduced two Assessment Technicians who were present, Cheryl Cameron and Kay Manning. The Council commended them on their efforts on behalf of the City. Councilmember Scott indicated citizens had commented they had been impressed with their friendliness and graciousness. She felt they way the assessors dealt with the public was a good reflection upon the City. PUBLIC INQUIRY REGARDING LOCAL ASSESSMENTS The City Manager indicated three property owners had requested their cases be heard by the Board of Equalization and were on the agenda for the meeting. 4/29/91 -2- Mayor Paulson opened the meeting for the purpose of a public hearing for the Board of Equalization at 7:46 p.m. He indicated the two cases with appointments, those being the Wiley- Crosby property located at 5621 Indiana Avenue North and Jack Schubert's 50's Grill Restaurant located at 5524 Brooklyn Boulevard, would be heard first. After that time, other cases would be heard on a walk -in basis if there was anyone present who wished to do so, and then a request made by letter from Reolita Paray in regard to her property at 3307 66th Avenue North would be considered. WILEY- CROSBY, 5621 INDIANA AVENUE NORTH PID #03- 118 -21 -31 -0001 Joe DaBruzzi, the appraiser in this case, had prepared a report for the Board stating the original value for the 1991 assessment was $248,500. Staff reviewed this appraisal and requested the Board to affirm this value. The property had been - inspected and was in good condition with many amenities. The property also has excess land which the appraiser felt could be plotted into five additional lots and sold as four lots at a resale value of $25,000 each and one lakefront lot at a resale value of $53,000. Several comparable sales in the area had been studied to determine the value. Subtracting out the development costs, estimated at $60,000, left a present value of the excess land at $93,000. The present market value of the house with a typical amount of land was $182,000 plus the $93,000 of excess land value indicated the total market value of $275,000. The City Assessor agreed to recommend the original market value as of January 2, 1991, which was $248,500. Mr. Valjean Wiley was in attendance at the meeting and made a presentation to the Board. He did not question the market value of the home but felt the valuation of the excess land resulted in an inequitable assessment. He indicated the property had seen a dramatic increase in property taxes regularly in the past several years and stated there had j been an inconsistency in the valuation of the excess land. To illustrate this, he pointed out the land had been valued at $45,000 in 1984; and, in 1986 the assessment was reduced by $11,000. He objected to the perceived lack of continuity in the valuation and felt the lakefront lot was not buildable. Mr. Wiley stated the lakefront lot in question was under the 100 -year flood plain and would require variances before building. He felt his property had been singled out for tax increases since it was the only one of seven in the neighboring area with an increase and that increase was proposed to be 33 percent for 1992. He proposed the Board eliminate its valuation for the fifth, lakefront lot and assess the property similar to neighboring properties. He felt a total assessment of $200,000 or less would be more equitable. The City Assessor commented on the appraiser's report and his recommendation. He indicated extensive study had been done of this property, and an increase had been recommended because the property was uniquely valuable and had been undervalued in 4/29/91 - 3 - previous years. He stated four of the lots were unquestionably buildable and the fifth lot could be built upon, although only one reasonable configuration was possible. This would result in a home bein g built upon the easternmost side of the lot. . In response to Councilmember Cohen's question, the City Assessor indicated state law specified the City must consider "uses to which the land could be put" but did not specify "buildable lots." He indicated if built upon, the lakefront lot would not result in an optimal situation, as the buyer would be limited as to the location of the home, and that location would be approximately 200 feet from the lake. However, given the limited supply of lakefront property, the lot was still very valuable. Councilmember Pedlar questioned whether the parcel in question could accurately be described as a "lakefront lot." However, he felt the comparable values resulted in a fair assessment regardless of this lot. In response to Councilmember Cohen's question, Mr. Wiley indicated he would theoretically sell the property for the assessed value, although his wife would probably not approve. Councilmember Rosene questioned the property's possible undervaluation in the past. Mr. Wiley stated he had been to tax court on the matter during which time the value of the property had been frozen. He felt since the taxes had regularly increased, undervaluation was not possible. The City Assessor noted the tax court decision had actually been a negotiated settlement. The Board discussed Mr. Wiley's proposal that the property be assessed at $200,000 or less. Councilmember Cohen commented he had figured the valuation a number of different ways and felt the $200,000 figure was too low in any event. The City Assessor felt the recommended $248,500 figure was a conservative one. There was a motion by Councilmember Jerry Pedlar and seconded by Councilmember Philip Cohen to affirm the recommendation of the City Assessor that the Assessor's Market Value as of January 2, 1991, be $248,500. The motion passed unanimously. Councilmember Rosene thanked Mr. Wiley for his well - prepared presentation to the Board. The Brooklyn Center Board of Equalization recessed at 9:04 p.m. and reconvened at 9:15 p.m. JACK SCHUBERT, 50'S GRILL RESTAURANT, 5524 BROOKLYN BOULEVARD PID #03- 118 -21 -41 -0015 The City Manager reviewed this case for the Board and indicated Mr. Schubert had been unable to attend the meeting. It was requested that Mr. Schubert's letter be read into the record. 4/29/91 -4- Dated April 28, 1991, it stated: "Dear Sirs: I am writing this letter to protest the 7% increase ($42,100) in market value proposed for the 50's Grill property located at 5524 Brooklyn Blvd. In light of the current recession, the glut of office and retail space and the fact that there are more restaurants going out of business than are opening up, I think commercial values are down not up. With revenues and incomes down, values have to be down. I don't think it is appropriate for the city to let a small number of sales of property that occur each year dictate the value of the entire base of comparable property in the city. I realize you are in the midst of a budget crunch. Increased revenue from property taxes is not the answer. The bulk of the answer has to be found in productivity improvements, belt tightening and careful cost/benefit analysis of all programs and services. Thank you for thoughtfully considering my point of view. Business demands kept me from appearing in person tonight. Sincerely, Jack Schubert President 50's Grill" The City Assessor reviewed the report on this item and indicated that although Mr. Schubert did not agree with the City's method of assessing property, it was based upon state law and property taxes were fluid. He noted the tax levy was divided by the tax base. If the tax base eroded, it increased each person's proportionate share of taxes. Therefore, new revenues were not generated, but the tax burden was shifted. He indicated the site contained 42,542 square feet of land on the main parcel plus a partial interest in the private roadway which brought the total square feet to 48,476. Similar facilities in the area were reviewed to ascertain comparable value. He recommended that the Assessor's Market Value of $644,100 as of January 2, 1991, be affirmed. 4/29/91 - 5 - L Councilmember Cohen noted a number of the comparable properties were located in the Brookdale area and questioned whether that would inflate values. The City Assessor stated that factor had been taken into consideration. The Board discussed the fact that the figures listed were preliminary and came to the conclusion that they were valid estimates, and nothing would be gained by requiring a more in -depth analysis. There was a motion by Councilmember Cohen and seconded by Councilmember Scott to affirm the Assessor's Market Value of $644,100 as of January 2, 1991. The motion passed unanimously. WALK -INS There was no one present on a walk -in basis who wished to have their property assessment reviewed by the Board of Equalization. LETTER FROM REOLITA PARAY, 3307 66TH AVENUE NORTH, PID #34- 119 -21- 14 -0065 The City Assessor briefly reviewed this item and requested Ms. Paray's letter be entered into the record. The letter, dated April 22, 1991, stated: 'Dear City Assessor: Re: Property ID 34- 119 -21 -14 -0065 3307 66th Avenue North, Brooklyn Center This letter is in reference to your current valuation of my property referenced above. This property was recently classified as non - homestead residential with market value of $73,500. I recently had this property evaluated for possible sale. Several realtors gave me estimated market value of $73,000 to $75,000. The market price is possibly $75,000. I am therefore concerned that your estimation of my property value for tax purposes is a little on the optimistic side. The property has not undergone any change since it was purchased in 1984. As a matter of fact it needs a lot of cosmetic improvements. The properties in the Brooklyn Center area, per my market evaluators, had devalued and therefore, the increase in the value for taxation is not warranted nor is it fair and equitable. I suggest, that prior to setting this value, someone from your department take a closer look into the logic or facts for this valuation analysis. You may wish to review recent closed sales to support your estimation. 4/29/91 - 6- I initially thought of disposing of said property in 1989 -1990, but due to the depressed market condition in the City of Brooklyn Center, my financial advisor thought that I will be losing too much money if I have to sell then. I had kept abreast of the market situation of the city and feel that the value of the properties had indeed been flat if not declining. This is confirmed by the recent sales in the area. In as much (sic) as I am out of the state, appearing in person to the City Board of Equalization to make a protest would be a financial burden for me. This is therefore my formal protest to the valuation as presented. I would like to have this letter forwarded to the City Board of Equalization for appeal. I can be reached during the day at (313) 350 -6335. Please notify me in writing or by telephone should you have any questions or comments. Sincerely, Reolita Paray 26656 Summerdale Drive Southfield, MI 48034" The City Assessor's report on this item stated the original value for the 1991 assessment was $73,500. The property had been inspected previously and found to be in average condition. After review of the sales comparisons in the area, the appraiser concluded the value was approximately $77,000. The City Assessor noted the recommended assessment of $73,500 was the lower of the two amounts and was also in line with the estimates Ms. Paray stated she had received from realtors. There was a motion by Councilmember Scott and seconded by Councilmember Pedlar to affirm the Assessor's Market Value of $73,500 as of January 2, 1991. The motion passed unanimously. LEGISLATIVE UPDATE OGREN TAX PROPOSAL The City Manager reviewed a memorandum from the North Metro Mayors Association in regard to the Ogren Tax Proposal. Although the total impact of the proposal on the City had not been established, he felt it was the least damaging of the proposals to date and included some good options. Cities would be allowed to be more independent and offered flexibility, as well as multiple sources of revenue. He believed the proposal offered the basis for an excellent opportunity and suggested the City might consider support of the plan. 4/29/91 - 7- Councilmember Cohen concurred with the City Manager's remarks but cautioned that the positive portions of the proposal could theoretically be undone with future legislation. He felt the plan offered uniqueness and creativity. However, the most negative element was that bonding programs would be required to be placed under the levy limits. The City Manager explained this provision would negatively impact the City, affecting the viability of bonds and bond ratings. He stated Springsted, Inc., as well as the City, was in the process of gathering information to oppose this measure of the proposal. Councilmember Scott suggested the Council adopt a formal resolution in support of the proposal. Councilmember Cohen suggested two resolutions be adopted; one supporting the proposal in general and one objecting to the bonding limits. The Council concurred. There was a motion by Councilmember Scott and seconded by Councilmember Pedlar directing staff to prepare a resolution expressing Council support of the concept of the Ogren Tax Proposal. The motion passed unanimously. There was a motion by Councilmember Cohen and seconded by Councilmember Rosene directing staff to prepare a resolution in conjunction with the above -named resolution in regard to the Ogren Tax Proposal, specifically objecting to the bonding limits in the proposal. The motion passed unanimously. The City Manager noted The North Metro Mayors Association was generating support from other surrounding communities as well. FISCAL DISPARITIES In regard to pending Fiscal Disparities legislation, the City Manager indicated the proposal seemed likely to fail, which would be positive from the City's viewpoint as they opposed the measure. Councilmember Scott commended the City Manager and Councilmember Cohen for all their time spent on behalf of the City in regard to legislative matters. 610/10 BYPASS Mayor Paulson reported he was planning to travel to Washington, D.C. to lobby in regard to the proposed 610/10 Bypass. He requested the Council reaffirm their position on the matter. There was a motion by Councilmember Cohen and seconded by Councilmember Rosene to reaffirm the City's support of the 610/10 bypass construction as a nontoll road. The motion passed unanimously. The City Manager noted the cost of Mayor Paulson's trip was to be paid by the 610 Crossing Coalition. 4/29/91 - 8- PUBLIC HEARING CLOSED There was no one else present who wished to address the Board of Equalization, and Mayor Paulson entertained a motion to close the public hearing. There was a motion by Councilmember Scott and seconded by Councilmember Pedlar to close the public hearing for the Board of Equalization at 9:55 p.m. The motion passed unanimously. ADJOURNMENT There was a motion by Councilmember Cohen and seconded by Councilmember Pedlar to adjourn the meeting. The motion passed unanimously. The Brooklyn Center Board of Equalization adjourned at 9:57 p.m. Deputy City Clerk Todd Paulson, Mayor Recorded and transcribed by: Ann J. Odden Northern Counties Secretarial Service 4/29/91 -9-