HomeMy WebLinkAbout1985 06-03 CCM Board of Equalization 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
June 3, 1985
City Hall
CALL TO ORDER
The Brooklyn Center City Council met as the Board of Equalization and was called to
order by Mayor Dean Nyquist at 7:03 p.m.
ROLL CALL
Mayor Dean Nyquist, Councilmembers Gene Lhotka, Celia Scott, Bill Hawes, and Rich
Theis. Also present were City Manager Gerald Splinter, City Assessor Peter Koole,
Property Appraiser Joe DaBruzzi, Assessing Clerks Grace Geske and Julie Caswell,
and Administrative Assistant Geralyn Barone.
PURPOSE OF BOARD OF EQUALIZATION
The City Manager reviewed the purpose of the Board of Equalization meeting and
pointed out that the City Council was serving as the Board of Equalization to conduct
a review of assessed valuation within the City, and to allow time for public inquiry
regarding local assessments after the City Assessor makes his report.
The City Manager introduced Peter Koole, City Assessor, who pointed out that there
are various steps that individuals must take when seeking adjustments in their
valuations and he explained that the meeting tonight is the first step, after which
the inquiry is passed on to the County, and the County then passes it on to the State
for their review. He explained that the values discussed this evening will serve as
the basis for 1986 taxes. He added that the Board of Equalization reviews the City
Assessor's work and he explained that the City appraisers are fully certified by the
State of Minnesota. He explained that the Assessor's responsibility is to treat
the value of similar properties in similar ways with regard to valuations. He also
noted that this year the Assessor's office has asked that people call his office
prior to the Board of Equalization meeting to make an appointment with the staff to
discuss their particular request, and also, if necessary, to register for an
appearance at the Board of Equalization. He explained that the re-
eo le who are
p P P
registered would be handled first at this evening's meeting.
PROCEDURAL REVIEW OF PROPERTY TAXATION
The City Assessor explained the appeal process, stating the channel of appeal begins
with the local Board, then onto the County Board, the State Board, and finally to the
Tax Court if carried that far. He added that an individual must go to the Local
Board first before they can qualify for the next step, which is the County Board, and
that an individual must also appeal to the County Board prior to appealing to the
State Board. The City Assessor then explained that the County Board of
Equalization is appointed by the County Commissioners and the Commissioner of
Revenue serves as the State Board of Equalization.
The City Assessor presented a slide show entitled "Property Assessment" prepared by
the Agricultural Extension Service of the University of Minnesota, copyright 1984.
THE CITY ASSESSOR'S REPORT
The City Assessor next reviewed the sales ratio studies. He explained that the
6 -3 -85 -1-
sales ratio study is a substantive part of what is done by the Assessing Department.
He briefly reviewed the 1985 sales ratio study noting the aggregate ratio is 92.4 %,
the median ratio is 92.2 %, and the coefficient of dispersion is 5.2 %. He then
briefly discussed the definition of the coefficient of dispersion. He stated that
the average sale price of a home in Brooklyn Center is $68,931 and the average market
value is $63,668. He also explained the Assessing Department analyzes the sales by
style, location, price, age, and neighborhood. He reviewed the valuations of
several homes located in different parts of the City, including homes located on a
lake or river, in proximity to a highway or freeway, commercial and multiple family
units, and homes located near parkland. He reviewed the Assessor's valuation and
property taxes since 1976, noting the value of property in a low price range has
increased 98.9% since 1976, while the tax burden has decreased by 6.4 %. He added
the value of property in a higher price range has increased 72.0% since 1976, while
the tax burden has risen by 11.0% in that time period. Reviewing a graph of average
property taxes in the last ten years, the City Assessor pointed out that the lower
valued properties are on the receiving end of tax relief. He then reviewed 1985
market values as compared to 1984, noting the average value of residential homes is
slightly lower for 1985. He emphasized that although sales prices have been flat,
volume of sales is high.
Councilmember Theis asked if the values presented were overall values of
residences, and the City Assessor replied saying the total value of residences was
divided by the number of parcels.
The City Assessor commented that State law requires one - fourth of the properties in
the City be revalued and inspected each year. He stated that summer, help would be
hired to assist in appraising the properties. He showed the Council on a map of the
City which areas had been revalued and inspected in 1984 for the 1985 assessment.
The City Assessor explained that normally he would discuss new legislative changes
affecting property valuation, but the legislature is still convening. He noted
that expectations were low for changes in the property tax system, and no action had
been taken on reform recommendations made to the Governor. He noted that a
legislative commission may form to conduct another study.
PUBLIC INQUIRY REGARDING LOCAL ASSESSMENTS
The City Manager explained that three notices had been received for this evening's
meeting. Two of the individuals had preregistered, Mr. William Shutte, regarding
the property at 6715, 6717, 6719, and 6721 Humboldt Avenue North, and Mr. Steve
Anderson of the Gaughn Company regarding the Victoria Townhouses at 6740 -6861
Grimes Place. Also requesting to appear at this evening's meeting was Mr. Scott
Regan representing Osseo /Brooklyn Bus Garage at 4435 68th Avenue North.
Mayor Nyquist recognized Mr. William Shutte, owner of four parcels between 6715 and
6721 Humboldt Avenue North. Mr. Shutte stated that he had received a letter from
the City Assessor requesting additional information on expenses and rents. Mr.
Shutte noted he had already completed information required by the Board of
Equalization at a previous meeting and by the City Assessor at a past conference with
him. Mr. Shutte inquired as to why the request for additional details was needed
when all previously stated requirements had been met. He informed the Board of
Equalization that he was appearing to request a reduction in the assessments of his
properties.
Mr. Shutte submitted and explained a letter prepared by him calculating his
6 -3 -85 -2-
interpretation of the market value. He stated that he still did not understand the
formula applied by the City Assessor in arriving at a market value. Mr. Shutte said
when he purchased the property, the taxes were one -half of what they are now. He
blamed the increase on the change in valuation.
The City Assessor referred the Board of Equalization to the report prepared for 6715
to 6721 Humboldt Avenue North, PID# 35- 119 -21 -11 -0007, 0008, 0009, and 0010. He
explained that five comparable small apartment building sales had taken place in
Brooklyn Center in 1983 and 1984, with sale prices ranging from $128,500 to
$168,000. The City Assessor stated the Assessor's 1985 market value was determined
by using an average gross rent multiplier of 7.6 and an average rent of $359 for two
bedroom units in four - plexes. The property value of $131,600 for each building was
adjusted to a market value of $121,600.
Councilmember Theis asked for clarification of the calculation of the Assessor's
1985 market value, and the City Assessor replied that the amount of the property
value was multiplied by the average sales ratio of 92.4% to arrive at the $121,600
market value.
Mr. Shutte commented that he did not understand the gross rent multiplier. He added
that his rents may be lower than those of buildings from recent sales.
Mayor Nyquist asked Mr. Shutte if a buyer looks at the lower rents when planning to
purchase a building. Mr. Shutte replied that a buyer is much more likely to look at
expenses, and a building is much easier to sell if expenses are met. Mayor Nyquist
asked if a potential buyer looks at income, and Mr. Schutte stated that a buyer
considers both income and expenses.
The City Assessor commented that very few cases exist where an investor does not
collect as much rent as possible, and he disagreed with Mr. Schutte's assumption
that current owners charge lower rates.
Mr. Shutte again asked for clarification of the gross rent multiplier, and the City
Assessor again explained it. The City Assessor noted that all factors considered
are reflected in rents, and that is why the gross rent multiplier is used.
Councilmember Theis asked if the gross rent multiplier was calculated based on 100%
occupancy, and the City Assessor replied affirmatively. Councilmember Theis noted
that if the average sale price is $140,000, in fact the buildings in question may be
undervalued at the original assessed market value of $126,500. The City Assessor
replied saying this could be possible, and the owner was given the benefit of doubt
in this case. He stated that the most conservative approach had been followed.
Councilmember Theis commented that based on the average sales values, he would have
problems with diverting from the City Assessor's recommendation.
The City Manager noted that all properties had been appraised over the last year and
some increases may have occurred.
There was a motion by Councilmember Lhotka and seconded by Councilmember Scott to
accept the City Assessor's recommendation to reduce the 1985 estimated market value
on the properties located at 6715, 6717, 6719, and 6721 Humboldt Avenue North, PID#
35- 119 -21 -11 -0007 through 0010, from $126,500 to $121,600. Voting in favor:
Mayor Nyquist, Councilmembers Lhotka, Scott, Hawes, and Theis. Voting against:
none. The motion passed unanimously.
6 -3 -85 -3-
Mr. Schutte asked if he should continue providing information as he had in the past,
and the City Assessor replied that information as requested by the Assessor's office
should be completed.
The City Manager introduced the next appeal, which was from Mr. Steve Anderson who
was representing Gaughn Company and appealing the valuation of Victoria Townhouses,
6740 to 6861 Grimes Place.
Mr. Anderson stated that the increase in assessed values was inconsistent with the
increase in gross rents.
Councilmember Lhotka asked why the income approach to valuing the property was used,
and the City Assessor replied that when the information is available, the income
approach is used. He added that in this case, the information provided was detailed
enough to use the income approach. He noted that some variations will occur with
the different approaches, and the income approach provided the lowest value.
Mr. Anderson asked the City Assessor to explain why other cities arrive at lower
assessments. The City Assessor responded saying he does not know what method other
cities use, and he has no control over their valuation practices.
Councilmember Theis asked how the gross rent multiplier was determined without a
rental figure for comparable sales. The City Assessor said the rental numbers were
supplied to him, by a data exchange, and they were available for review if needed.
Mr. Anderson inquired whether any of the housing units reviewed for comparable sales
were low income projects. The City Assessor said he was not aware if they were or
not. Mr. Anderson stated that any excess cash flow must be returned to HUD.
Therefore, it was Mr. Anderson's opinion that a valid comparison could not be made.
Councilmember Theis asked how the original 1985 market value of $1,729,400 was
determined and the City Assessor explained. The City Manager noted that when a
detailed appraisal is made, the value may increase, as it did in this case.
Councilmember Theis and the City Assessor discussed various methods of valuation.
There was a motion by Councilmember Scott and seconded by Councilmember Hawes to
adjust the Assessor's 1985 market value on the property located at 6740 -6861 Grimes
Place, PIDIt 34- 119 -21 -21 -0026 from $1,729,400 to $1,850,000. Voting in favor:
Mayor Nyquist, Councilmembers Lhotka, Scott, Hawes, and Theis. Voting against:
none. The motion passed unanimously.
The City Manager introduced the next appeal, which was from Mr. Scott Regan who was
representing Osseo /Brooklyn Bus Garage and appealing the valuation of the property
at 4435 -68th Avenue North.
Mr. Regan stated he was appearing before the Board of Equalization this evening
because of a 21% increase in market value of the property from 1984 to 1985. He
explained the uses of the building, stating no improvements have been made since the
purchase.
The City Assessor commented that he had reviewed this case earlier and was not aware
that Mr. Regan had planned to appear. He reviewed the characteristics of the
property in question, emphasizing the under - improvement of land. He stated that
the Assessor's office had been conservative in arriving at their valuation.
6 -3 -85 -4-
Mr. Regan noted that the building must be located within the school district to
accommodate the schools, and the property was one of the few pieces of property
available at the time of purchase. He added that the building meets all of the
City's requirements.
Councilmember Theis and the City Assessor reviewed the valuations of the property
and the building. The City Assessor commented that he did not feel the market value
was excessive.
There was a motion by Councilmember Lhotka and seconded by Councilmember Theis to
adjust the Assessor's 1985 market value downward by 5% on the property located at
4435 -68th Avenue North, PID# 34- 119 -21 -22 -0012 from $702,500 to $667,300. Voting
in favor: Mayor Nyquist, Councilmembers Lhotka, Scott, Hawes, and Theis. Voting
against: none. The motion passed unanimously.
The City Assessor next reviewed the nonpersonal appeals received by the Assessing
Department. He reviewed the following list and recommendations for Council
members:
Case #
1. Kensington Inv. Co. 6540 Shingle Creek Parkway
PEXt 35- 119 -21 -14 -0007
1985 EMV - $731,800
Recommendation: $731,800
2. Edstrom Realty
PI Xt 03- 118 -21 -22 -0025 4500 -58th Ave. N. 1985 EMV- $6,700,000
PID/t 03- 118 -21 -22 -0027 4539 58th Ave. N. 1985 ENV -$ 300,000
Recommendation: Same as 1985 EMV
3• France Avenue Investments 5001 France Avenue North
PID# 10- 118 -21 -24 -0002
1985 ENV - $1,753,600
Recommendation: $1,753,600
4. Chippewa Park Inv. Group
PID/t 36- 119 -21 -31 -0045 0 6 Camden Ave. -
4
35 N 18 EMV
95 $,874,2 00
PID# 36- 119 -21 -24 -0046 6507 Camden Ave. N. 1985 ENV -$ 208,000
Recommendation: Same as 1985 ENV
5• George Kosnites
PENt 36- 119 -21 -42 -0007 201 -65th Ave. N. 1985 EMV -$ 248,900
PID/t 36- 119 -21 -42 -0008 207 -65th Ave. N. 1985 ENV -$ 248,900
PID/t 36- 119 -21 -42 -0009 215 -65th Ave. N. 1985 EMV -$ 248,900
PID# 36- 119 -21 -42 -0010 6425 Willow Lane 1985 ENV -$ 248,900
PID# 36- 119 -21 -42 -0011 6417 Willow Lane 1985 EMV -$ 248,900
PID/I 36- 119 -21 -42 -0012 6409 Willow Lane 1985 ENV -$ 248,900
PID# 36- 119 -21 -42 -0013 6401 Willow Lane 1985 EMV -$ 248,900
Recommendation: Same as 1985 EMV
6 -3 -85 -5-
6. Trans America Partners
PID# 02- 118 -21 -13 -0024 5715 Morgan and
5712 -48 Morgan 1985 EMV -$ 836,700
PID/f 02- 118 -21 -13 -0025 Parking Lot 1985 EMV -$ 95,200
PIDIt 02- 118 -21 -13 -0026 5710 Morgan 1985 EMV -$ 316,200
PID# 02- 118 -21 -13 -0027 2000 -57th Ave. N. 1985 EMV -$ 110,900
PID# 02- 118 -21 -13 -0028 1912 -57th Ave. N. 1985 EMV -$ 140,200
Recommendation: Same as 1985 EMV
7. Allied Central Stores 1200 Brookdale
PID# 02- 118 -21 -32 -0004
1985 EMV - $5,394,400
Recommendation: $5,394,400
8. Gary D. Lyons 6807 -13 -19 Humboldt Ave.
PID# 35- 119 -21 -11 -0006
1985 EMV - $814,800
Recommendation: $814,800
I
9. Lowell Zitzloff 4321 -23 — 68th Avenue North
PID/k 34- 119 -21 -22 -0011
1985 EMV - $226,200
Recommendation: $226,200
. Twin n City Federal 2950 County Road 10
PIDt 03- 118 -21 -14 -0018
1985 EMV - $387,200
Recommendation: $387,200
11. Morton P. Barron 4315 -68th Avenue North
PID# 34- 119 -21 -22 -0010
1985 EMV - $160,500
Recommendation: $160,500
12. Midwest Federal 5545 Xerxes Avenue North
PIDWp 03- 118 -21 -41 -0022
1985 EMV - $444,200
Recommendation: $444,200
13• Cigna Real Estate Funds 6300 Shingle Creek Parkway
PID4f 35- 119 -21 -43 -0007
1985 EMV - $8,556,300
Recommendation: $8,556,300
6 -3 -85 -6-
14. Northwestern National Life Ins. 2810 County Road 10
PID/t 02- 118 -21 -23 -0016
1985 EMT - $2,956,700
Recommendation: $2,956,700
15. Brutger Companies, Inc. 6201 Lilac Drive N.
1985 EMT
PID/t 36- 119 -21 -33 -0091 Unit #101 T5$,400
PID# 36- 119 -21 -33 -0092 Unit #102 $62,000
PID/t 36- 119 -21 -33 -0093 Unit #103 $62,000
PID# 36- 119 -21 -33 -0094 Unit #104 $62,000
PID/t 36- 119 -21 -33 -0095 Unit #105 $62,000
PID# 36- 119 -21 -33 -0096 Unit #106 $62,000
PID# 36- 119 -21 -33 -0097 Unit #107 $62,000
PID# 36- 119 -21 -33 -0098 Unit #108 $62,000
PID# 36- 119 -21 -33 -0099 Unit #109 $51,700
PID# 36- 119 -21 -33 -0100 Unit #112 $48,700
PID# 36- 119 -21 -33 -0101 Unit #113 $58,400
PID# 36- 119 -21 -33 -0102 Unit #114 $60,200
PID# 36- 119 -21 -33 -0103 Unit #115 $60,200
PID# 36- 119 -21 -33 -0104 Unit #201 $58,400
PID# 36- 119 -21 -33 -0105 Unit #202 $62,000
PID# 36- 119 -21 -33 -0106 Unit #203 $62,000
PID/t 36- 119 -21 -33 -0107 Unit #204 $62,000
PID# 36- 119 -21 -33 -0108 Unit #205 $62,000
PID# 36- 119 -21 -33 -0109 Unit #206 $62,000
PID# 36- 119 -21 -33 -0111 Unit #208 $62,000
PID# 36- 119 -21 -33 -0112 Unit #209 $62,000
PIDIt 36- 119 -21 -33 -0113 Unit 4210 $62,000
PID# 36- 119 -21 -33 -0115 Unit #212 $58,400
PIDIt 36- 119 -21 -33 -0116 Unit #213 $58,400
PID# 36- 119 -21 -33 -0117 Unit #214 $60,200
PID# 36- 119 -21 -33 -0118 Unit #215 $60,200
PID# 36- 119 -21 -33 -0119 Unit #301 $58,400
PID# 36- 119 -21 -33 -0120 Unit #302 $62,000
PID# 36- 119 -21 -33 -0121 Unit #303 $62,000
PID# 36- 119 -21 -33 -0122 Unit #304 $62,000
PID# 36- 119 -21 -33 -0123 Unit #305 $62,000
PIDIt 36- 119 -21 -33 -0124 Unit #306 $62,000
PID# 36- 119 -21 -33 -0125 Unit #307 $62,000
PID# 36- 119 -21 -33 -0126 Unit #308 $62,000
PID# 36- 119 -21 -33 -0127 Unit #309 $62,000
PID# 36- 119 -21 -33 -0128 Unit #310 $62,000
PID# 36- 119 -21 -33 -0130 Unit #312 $58,400
PID# 36- 119 -21 -33 -0131 Unit #313 $58,400
PIDff 36- 119 -21 -33 -0132 Unit #314 $60,200
PID# 36- 119 -21 -33 -0134 Unit #401 $58,400
PIW 36- 119 -21 -33 -0135 Unit #402 $62,000
PID# 36- 119 -21 -33 -0136 Unit #403 $62,000
6 -3 -85 -7-
PID# 36- 119 -21 -33 -0137 Unit #404 $62,000
PID# 36- 119 -21 -33 -0138 Unit #405 $62,000
PID# 36- 119 -21 -33 -0139 Unit 4406 $62,000
PID# 36- 119 -21 -33 -0140 Unit 4407 $62,000
PID# 36- 119 -21 -33 -0141 Unit #408 $62,000
PID# 36- 119 -21 -33 -0142 Unit #409 $62,000
PID# 36- 119 -21 -33 -0143 Unit #410 $62,000
PID# 36- 119 -21 -33 -0144 Unit #411 $62,000
PID# 36- 119 -21 -33 -0145 Unit #412 $58,400
PID# 36- 119 -21 -33 -0146 Unit #413 $58,400
PID# 36- 119 -21 -33 -0147 Unit #414 $60,200
PID# 36- 119 -21 -33 -0148 Unit #415 $60,200
PID# 36- 119 -21 -33 -0149 Unit #501 $58,400
PID# 36- 119 -21 -33 -0150 Unit #502 $62,000
PID/t 36- 119 -21 -33 -0151 Unit #503 $62,000
PID# 36- 119 -21 -33 -0153 Unit #505 $62,000
PID# 36- 119 -21 -33 -0154 Unit #506 $62,000
PID# 36- 119 -21 -33 -0155 Unit #507 $62,000
PID# 36- 119 -21 -33 -0157 Unit #509 $62,000
PID# 36- 119 -21 -33 -0159 Unit #511 $62,000
PID# 36- 119 -21 -33 -0160 Unit #512 $58,400
PILO 36- 119 -21 -33 -0161 Unit #513 $58,400
PID# 36- 119 -21 -33 -0162 Unit #514 $60,200
Recommendation:. Same as 1985 ENIV
16. Jim Bern Co. 700 -890 - 66th Ave. N.
PID# 36- 119 -21 -24 -0047
1985 EMV - $2,600,000
Recommendation: $2,600,000
17. Plitt Theatres 2501 County Road 10
PID# 02- 118 -21 -24 -0013
1985 EMV - $761,500
Recommendation: $761,500
18. Robert H. Bradley
PID# 35- 119 -21 -44 -0003 6120 Earle Brown Drive $4,500,000
PID# 02- 118 -21 -11 -0002 6040 Earle Brown Drive $1,850,000
PID# 35- 119 -21 -11 -0012 1600 -67th Avenue North $2,500,000
PIE# 35- 119 -21 -12 -0003 6800 Shingle Crk. Pkwy $2,750,000
PID# 35- 119 -21 -44 -0002 Vacant Land $ 428,800
Recommendation: Same as 1985 EMV
19. M & E Realty Co. 6215 Brooklyn Blvd.
PID# 34- 119 -21 -43 -0006
1985 EMV - $550,900
Recommendation: $550,900
There was a motion by Councilmember Theis and seconded by Councilmember Scott to
6 -3 -85 -8-
concur with the staff recommendations regarding the nonpersonal appeals. Voting
in favor: Mayor Nyquist, Councilmembers Lhotka, Scott, Hawes, and Theis. Voting
against: none. The motion passed unanimously.
The City Assessor reviewed a nonpersonal appeal by Dale M. Stone, 5500 Bryant Avenue
t North, PID/t 01- 118 -21 -31 -0061, with a 1985 market value of $186,900. The City
Assessor recommended a decrease in the market value to $165,000.
There was a motion by Councilmember Lhotka and seconded by Councilmember Theis to
accept the City Assessor's recommended 1985 market value of $165,000. Voting in
favor: Mayor Nyquist, Councilmembers Lhotka, Scott, Hawes, and Theis. Voting
against: none. The motion passed unanimously.
ADJOURNMENT
There was a motion by Councilmember Scott and seconded by Councilmember Lhotka to
adjourn the Board of Equalization meeting. Voting in favor: Mayor Nyquist,
Councilmembers Lhotka, Scott, Hawes, and Theis. Voting against: none. The
motion passed unanimously. The Board of Equalization adjourned at 8:35 P.M.
Deputy City Clerk ,ayo
6 -3 -85 -9-