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HomeMy WebLinkAbout1983 06-06 CCM Board of Equalization MINUTES OF THE PROCEEDINGS OF THE CITY COUNCIL OF THE CITY OF BROOKLYN CENTER IN THE COU14 Y OF HENNEPIN AND THE STATE OF MINNESOTA Board of Equalization June 6, 1 983 City Hall CALL TO ORDER The BrooZ��enter City Council met as the Board of Equalization and was called to order by Mayor Dean Nyquist at 7:09 p.m. ROLL CALL May or Dean Nyquist, Councilmembers 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 Tom Bublitz. Mayor Nyquist noted that Councilmember Ihotka was out of town and would be absent from this evening's meeting. He also noted that Councilmember Scott would be arriving later in the meeting. PURPOSE OF BOARD OF ECUALIZATIOII The City Tanager 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 1984 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 people who are pre — registered would be handled first at this evening's meeting. PROCEDURAL REVTDT 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 also explained that individuals may appeal to the Tax Court directly without going to the County Board or State Board. 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 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- 6-6-83 -1- The City Assessor stated that the duties* and the procedures to be followed by the Local Board are set in Minnesota Statute 274.01 to "examine and see that all taxable property in the City has been properly placed upon a tax list and duly valued by the Assessor ". Furthermore, he stated, "on application of_ any person, feeling aggrieved, the Board shall review the assessment and correct as shall appear just ". In reviewing the duties of the City Assessor, he noted the State Statute reads "All real property subject to taxation shall be listed and assessed every year with reference to its value on January 2, preceding the assessment ". The Assessor stated this has been done and the owners of the property in Brooklyn Center have been notified of any value changes. He also pointed out that Minnesota Statute 273.11 states, "All property shall be valued at its market value ". The City Assessor further explained the Statute states "In estimating and determining such value the Assessor shall not adopt a lower or different standard of value because the same is to serve as a basis for taxation; nor shall he adopt as a criterion and a value the price for which such property would sell at auction or at a forced sale, unless the Assessor determines the auction to be a market value sale, or an aggregate with all the property in the town or district; but he shall value each article or description of property by itself, and at such sum or price as he believes the same to be fairly worth in mone „ He pointed out h h o the 1 legislature e the stipulation that y po 983 legs latur added e stlpul do t the Assessor can use the price of property sold at auction if it is a market value sale. The City Assessor noted in cases where a property may be so unique as to make a comparative market value hard to determine, Minnesota Case Law is clear- as demonstrated in the case of Minnesota versus Fritch. In this case, the court stated, "It is up to the Assessor to form an opinion of the market value even when there is no market or sales to aid in fixing values, where there have been no actual sales for a long period of time, there is no way of determining values except by the judgment and opinion of men acquainted with the lands, their adaptability for use and the circumstances of the surrounding community ". The City Assessor. explained that the Assessor's work is based on historical value and that their data is based on actual sales and not.projections. THE CITY ASSESSOR'S REPORT The City Assessor next reviewed the sales ratio studies. He explained that the sales ratio study was a substantive part of what is done by the Assessing Department. He briefly reviewed the 1982 sales ratio study noting the aggregate ratio is 91 .1 %, the median ratio is 91.1 %, and the coefficient of dispersion is 6.0%. He then briefly discussed the definition of the coefficient of dispersion. He stated that the average sale price of ahome in Brooklyn Center is $70,000 and the average market value is $64, 000. 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 pointed out the percent of increase in sale prices in the City's neighborhoods from 1982 to 1983 ranged from 1 .6% to 10.2% and that the average increase, in valuation City wide was 4.3% for residential property. Councilmember Scott arrived at 7:15 p.m. The City Assessor reviewed inspections by the appraisers. He commented that State law requires one- fourth of the properties in the City be revalued and inspected each year. He showed the Council on a map of the City which areas had been revalued and inspected in 1982 for the 1983 assessment. He noted, in addition to the regular 6 -6 -83 -2- inspections made each year, the Assessing Department must also inspect the work on each building permit. Councilmember Theis inquired why the homes along the river had values increased so much. The City Assessor explained that the sales ratio in this area was apparently decreasing which indicated the homes in this area were undervalued. The City Assessor next reviewed a graph showing the average homestead property tax from 1974 to 1983 and explained that current taxes are historically relatively low and have decreased from 1977 to 1981. He then reviewed a graph of the homestead property tax payments in Brooklyn Center as a percent of market value for the period 1974 to 1983. He noted there was a trend to a lower tax payment expressed as a percent of market value for homestead property. He also pointed out that the trend for commercial property would be the reverse of that for residential properties. The City Assessor reviewed a table showing the property tax levies for the various taxing jurisdictions in Brooklyn Center for 1982 and 1983, The City Assessor explained that all residential properties in the City are now on the computer system and that 95% of those properties in the City are valued through the use of the computer. He next reviewed legislative changes affecting property valuation. He then proceeded to review the average increases in assessed valuation for various priced homes poi nting out that, if the mill rate in the City does not change, a $45, 000 house will increase in valuation approximately 5 %, a home valued at $64, 000 will decrease approximately 14%, and a $90,000 home will be down approximately 4 %. He explained that with a mill rate increase, the $45,000 home in the City will experience a 20% increase, the $64,000 home will remain unchanged, and the $90,000 home will experience a 1O1 increase. Continuing his discussion of new legislation, he explained the State legislature kept the $650 homestead credit intact. He noted that with regard to Section 8 housing, on January 1, 1984, the tax rate will be prorated to only those units where Section 8 eligible people live. He also noted that the legislature changed the due date. for payment of taxes from May 31 and October 31 to May 15 and October 15. PUBLIC INQUIRY REGARDING LOCAL, ASSESM2NTS T TFe City Tanager explained that two individuals had pre- registered for this evening's meeting, Mr. Kenneth J. Bentzen, 5715 Emerson Avenue North, and Mr. John Lescault, 3507 62nd Avenue North. Mayor PTyquist recognized Mr. John Lescault who stated that he bought the property at • 3507 62nd Avenue North in April of 1983 at a sale price of $45, 000• He noted the sale was handled by a law firm representing Twin City Federal. He stated to the Board of Equalization that his assessment on the property has been sent at $57,800, and that he believes this valuation to be too high in light of the $45,000 purchase price. The City Assessor referred the Board of Equalization to report No. 2 prepared for 3507 62nd Avenue North, PID# 34- 119 - 21-43 -0036. He explained the property was inspected on June 3, 1983 and consists of 976 sq. ft., which is close to the average for a home in Brooklyn Center. He stated the market value was established at $58,500 tut it has been discovered that the City has no water service available to the property, presently, and that the estimated cost of water service would be $3,610.. In light of the absence of City water to the property, the City Assessor 6 -6 -83 -3- recommended the assessed valuation be reduced to $54,200. Mr. Lescault stated that when he talked to the City's engineering department, he was told that water service would cost $7,000. The City Manager stated that the staff could review the cost and verify this figure with the engineering department. Councilmember Theis inquired what the $3,610 represented, as stated by the City Assessor. The City Assessor explained that this figure represented the special assessment plus special charges for trenching in the existing street. Ile added that this cost does not include the on -site cost of a water connection. The City Manager recommended that the item be continued so that the staff could verify the figures. Kayor Nyquist noted that the Council would continue the consideration of Mr . Lescault Is property to the next regularly scheduled Council meeting to be held June 13, 1 983. The City Manager introduced the next appeal, which was from Mr. Dennis Peterson who was appealing the valuation of the property at 4811 69th Avenue,North. The City Assessor explained that Mr. Peterson was currently in the Soviet Union but that he would relay Mr. Peterson's appeal. He explained that the property in question was inspected on November 2, 1982 with an assessed value of $70,900. He explained the site is located on two platted lots and that the second lot was buildable. He stated that the staff recommendation would be to reduce the valuation because comparable homes are not assessed at 100/' of market value.' He recommended the market value on 4811 69th Avenue North, PID# 33- 119-21 --11 -0030 be reduced from $70,900 to $66,000. There was a motion by Councilmernber Scott and seconded by Councilmember Theis to approve the staff recommendation to reduce the 1983 assessed value on the property located at 4811 69th Avenue North, PID# 33- 119 -21 -11 -0030, from $70,900 'to $66,000. Voting in favor: Mayor Nyquist, Councilmembers Scott, Hawes, and Theis. Voting against: none. The motion passed. The City Assessor next reviewed the non - personal appeals received by the Assessing Department. He, reviewed the following list and recommendations for Council members: Case # 1 -A Dennis Peterson 4811 Avenue North PID# 33- 119 -21 -11 -0030 1983 EMV - $70,900 Recommendation: $66,000. 2-A) Brock Hotel Corp. Holiday Inn PID# 35- 119 -21 -41 -0003 1983 17W - $3,308,200 Recommendation: $2,800,000. 3 -A) Texas Air Corp. Vacant Land PID # /02- 118 -21 -11 -0001 1983 EMV - $576,100 Recommendation: Refer to staff for a report back at a continued meeting. 6 -6 -83 -4- 4 -A) Texas Air Corp. Vacant Land PID# 02- 118 -21 -11 -0006 1983 E - $429,500 Recommendation: Refer to staff for.a report back at a continued meeting. 5 -A) Plitt Theaters, Inc. 2501 County Road 10 PID# 02- 118 -21 -24 -0013 1983 HMV $716,100 Recommendation: Refer to staff for a report back at a continued meeting. 6-A) Gabbert & Gabbert Co. Westbrook Mall PID# 03- 118 -21 -14 -0022 1983 ETV - $2,908,200 Recommendation: Refer to staff for a report back at a continued meeting. 7 -A) The Prudential Ins. Co. 6820 Shingle Creek Parkway of America PID# 35- 119 -21 -12 -0002 1983 EP'N - $2,664,200 Recommendation: Refer.to staff for a report back at a continued meeting. 8-A) The Prudential Ins. Co. 6840 Shingle Creek Parkway of America PID# 35- 119 -21 -21 -0003 1983 EMV - $2,024,900 Recommendation: Refer to staff for report back at a continued meeting. 9-A) Raymond G. & Agnes L. 4- Plex'- 1425 55th Avenue North Janssen PID# 01- 118 -21 -33 -0072 1983 UTV - $126,700 Recommendation: Refer to staff for a report back at a continued meeting. 10-A) R.Z. Zych & J.F. 4 -flex - 620 53rd Avenue North Fahrenholz PID# 01 -11€3 -21-43 -0073 1983 EMV - $141,200 Recommendation: Refer to .staff for a report back at a continued meeting. 11 -A) Dale M. Stone 4 -flex - 5500 Bryant PID# 01- 118- 21-31 -0061 1983 13TV - $172,200 6 -6 -83 -5- Recommendation: Refer to staff for a report back at a continued meeting. 12 -A) William F. & Bonnie L. 4 =flex (4) Shutte' PID# 35- 119 -21 -11 -0007 6719 Humboldt 1983 RIV - $126,700 PID# 35- 119 -21 -11 -0008 6721 Humboldt 1983 IN - $126,700 PID# 35- 119 -21 -11 -0009 6715 Humboldt 1983 NN - $126,700 PID# 35- 119 -21 -11 -0010 6717 Humboldt 1983 HIV - $126,700 Recommendation: Refer to staff for a report back at a continued meeting. There was a motion by Councilmember Hawes and seconded by Council-member Scott to concur with the staff recommendations regarding the non - personal appeals described above, and to approve the staff recommendations for the non - personal appeals with the exception of Case No. 1A, 7A, and 8A. Voting in favor: Mayor Nyquist, Councilmembers Scott, Hawes, and Theis. Voting against: none. The motion passed. The City Assessor . introduced the next inquiry from the Prudential Insurance Company. The appeal addressed the properties at 6820 and 6840 Shingle Creek Parkway, PID# 35-119-21-12-0002 and PID# 35- 119 -21 -21 -0003 respectively. The City Assessor explained the combined value of the properties was $4,689,100. Mayor Nyquist recognized Mr. James Holter who addressed the Council and stated that he was representing Prudential this evening, and that he was the Senior Vice President of Property Valuation Services. Mr. Holter stated that he was here to address the appeal for Prudential regarding the properties at 6820 and 6840 Shingle Creek Parkway, PID# 35- 119 -21 -12 -0002 and PID# 35- 119 -21 -21 -0003 respectively. He distributed to Council members information regarding the Prudential Properties and requested that the data distributed this evening remain confidential. The City Assessor stated that it is within the State law to provide confidentiality for the information submitted by Mr. Holter. Mr. Holter stated that the buildings at 6820 and 6840 Shingle Creek Parkway were built in 1974 prior to the energy conservation era. He explained the buildings are one story structures with mezzanines. He proceeded to review the 1981 statement of income and operations for the buildings and explained that over the last three years the property has not exceeded 66.6% occupancy. He also pointed out that mezzanine space is not a popular type space in the rental market today. He added that there is also no median break at the site and as a result trucks must turn right only and cannot make a left turn on Shingle Creek Parkway. He pointed out that tenants have indicated that this is a problem' at the site. Mr. Holter added that utility costs has also been rising over the'past several years. Mr. Holter next reviewed a prepared pro forma statement on the properties. He then reviewed for Council members a table showing the commitments of $100, 000 and over on multi- family and nonresidential mortgages made by 20 life insurance companies, and noted that the tables show that -during the last quarter rates dropped and resulted in a higher capitalization rate. Mr. Holter explained that the pro forma. value of the properties was $4,196,420 and that he would look at this value and not at historical data in determining the value of the property. He added that Prudential had an 6 -6 -83 -6- appraisal of the property done on February 4, 1983 by the American Appraisal Company. He explained that, at that time, the market value appraisal was $4,300,000. He submitted to the Council that the value for tax purposes on the properties should not exceed $4,300,000. The City Manager recommended that Case Nos. 7A and 8A be referred to the staff to allow them to.prepare a report for the next meeting. There was a motion by Councilmember Scott and seconded by Councilmember Hawes to refer Case Nos. 7A and 8A, an appeal from the Prudential Insurance Company regarding the properties at 6820 and 6840 Shingle Creek Parkway, PID# 35- 119 -21 -12 -0002 and PID# 35- 119 -21 -21 -0003 to staff, to allow them to prepare a report to be submitted at the next regularly scheduled City. Council meeting. Voting in favor: Mayor Nyquist, Councilmembers Scott, Hawes, and - Theis. Voting against: none. The motion passed. The City Assessor next introduced the names of a number of persons who had requested a review by the Board of Equalization this evening but had not pre - registered. The Assessor noted the following names: 1. Barbara Schopf, 4201 Lakeside, Apt. 113, PID# 10-32 -0085 2. Harold E. Eklund, 5712 Irving, PID# 02 -14 -0076 3. Richard & E. Diane Curylo, 7243 Willow Lane, PID# 25 -41 -0038 4. Gerald Salitros, PID# 10=-41 -0003 The City Assessor stated that, with the exception of Mr. Salitros, he recommended that the remainder of the requests be referred to staff for presentation at the next meeting. Mayor Nyquist recognized Mr. Richard Curylo, 7243 Willow Lane, who stated that he purchased a home on Willow Lane at a purchase price of $88,000 in June and that the home was assessed at $95, 000. He added that an appraisal had been done on the home for,remortgage purposes and was $90,000. The City Manager stated that the staff will report on this item and make a recommendation at the next meeting. There was a motion by Councilmember Hawes and seconded by Councilmember Theis to refer the appeals from Barbara Schopf, 4201 Lakeside, Apt. 113, PID# 10-32 -0085, Harold E. Eklund, 5712 Irving, PID# 02 -14- 0076, Richard & E. Diane Curylo, 7243 Willow Lane, PID# 25-41 -0038, to the City staff and to authorize the staff to prepare a report on the properties for the next regularly scheduled Council meeting. Voting in favor: Mayor Nyquist, Councilmembers Scott, Hawes, and Theis. Voting. against: none. The motion passed. The City Manager reviewed the location of Mr. Salitros I property, pointing out that it was on the northwest side of Ryan Lake and was the land discussed with regard to a possible de- annexation of property to either the City of Robbinsdale or Minneapolis. Mr. Salitros stated that in 1972 the property was obtained from his wife's mother and was zoned light industry. He added that in 1974 he contacted the City to build a home on this site and was informed that the land was zoned 02. He pointed out a large percentage of the land is unbuildable. He stated that a property appraisal on the property was done by Mr. Norton Hose, 4800 13th Avenue South, zip code 55417, tel 6 -6 -83 -7- no. 823 -4684. He explained that this appraisal resulted in a valuation of $12,000. Mr. Salitros then asked why the taxes on this parcel of property increased. The City Tanager explained that the tax increase was a result of the State legislature's shift in taxing various categories of land. i The City Assessor explained that the 02 zoning was indicated for this parcel on the old comprehensive plan of the City. He stated that the City Planning Department would be willing to recommend to zone the property R1 and the City could take care of this. He added that he was not aware of any request received to rezone the land or for a building permit. He noted that the land consists of approximately 18 acres of land and v ater and is an appraisal problem. He noted it has been valued as a substandard single family lot.. He noted the City paid $4,500 per acre for unbuildable land similar to this property and that AIr. SalitrosI land was valued at $700 per acre. Mr. Saltiros stated that he did ask for a rezoning and a building permit in 1975. The City Manager stated that it appears that one buildable lot can be made from the property and that he would have no problem with recommending an R1 zoning. The City Assessor stated his previous statement regarding the request for rezoning and a building permit was incorrect since he had only checked as far back as 1976. lie added that it is difficult to establish a value for this type of land and that a $12,000 value is probably as accurate as $13,000. He recommended that the property be valued at $12,000. There was a. motion by Councilmember Scott and seconded by Councilmember Theis to establish the assessed value of the property described by PID# 10- 41 -GW3 at $12,000. Voting in favor: Mayor Nyquist, Counc i lmembers Scott, Hawes, and Theis. Voting against: none. The motion passed. MOTION FOR CONTIEUATION OF BOARD OF EQUALIZATION P ET ING There was a motion by Councilmember Theis and seconded by Councilmember Scott to continue the Board of Equalization meeting to -7:00 p.m. on Monday, June 13, 1983. Voting in favor: Mayor Nlyquist, Council-members Scott, Hawes, and Theis. Voting against: none. The motion passed. The Board of Equalization adjourned at 8:35 P.M. Clerk Mayo i IZ / i 6 -6 -83 -8-