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HomeMy Public PortalAbout04/11/01 Board of Appeals CCM89 MEDINA MINUTES OF APRIL 11, 2001 BOARD OF REVIEW The City Council of Medina, Minnesota met in special session on April 11, 2001 at 7:30 p.m. in the City Hall Chambers. Mayor John Ferris presided. Members present: Ferris, Lane, Smith, and Zietlow. Members absent: Workman. Also present: Assessor, Rolf Erickson, Mike Carroll, Representative of the County Assessor's Office, and Administrator Clerk -Treasurer Paul Robinson. Rolf Erickson gave an introduction. He said that the purpose of tonight's meeting is to consider adjustments to property tax values for the tax year 2001, payable 2002. He said there are two ways the board can correct the value, the board can find that a value is incorrect and adjusted the value up or down accordingly, or they can find that there is a false classification and they can change the property classification. Erickson said that Minnesota is also required to value properties at market value, and explained how the County sets the acceptable values for land on an aggregate basis and can, after the fact, increase a market value of a city if it is found to be too low. Market value is defined as the price a willing buyer will pay a willing seller. Erickson said there are two kinds of data they use to determine value. One is objective data, such as the physical characteristics of the house, the property, the number of square feet, the number of bedrooms, type of roof, type of building materials, etc. The second is the subjective data, this is basically the appraiser's opinion about the quality of the house, the aesthetic value of the house, etc. Erickson said overall increases in residential property in Medina was 14%. For properties on lakeshore it was 20%, apartments were 25%, and commercial/industrial property 9.5%. He said individual property increases varied from 0 to 70%. Erickson said there is an extreme amount of pressure on land values in this area. There is just not a lot of land left. Jim Lane asked Erickson what the total market value was this year compared to last. For 2000 it was $544,600,000 and for 2001 it was $631,200,000, approximately a 16% increase. There was some discussion about the limited market value. Erickson said this law was scheduled to sunset this year. He said if it were to sunset, then those properties with a large discrepancy between their limited value and market could see dramatic increases in the future. Erickson believed the law would probably be extended, however, there are many varying proposals at the legislature. Everyone will have to pay attention to what types of changes may occur. Jim Lane was concerned about the difference in Medina between the limited market value and the estimated market value. Erickson said for April 2000, Medina's limited market value was $511,000,000 and the estimated market value was $524,000,000, a $13,000,000 difference. Medina Board of Review Meeting Minutes April 11, 2001 90 The meeting was opened to those who wanted to appeal their property value. Mark Flaten - 325 Cheyenne Trail Mr. Flaten presented analysis of market values in the area. He believed, based on sales and values of like property in the area, and since all the homes on his street were built by the same person, that they would all have relatively similar property values, however, they differ considerably from house to house. Erickson said they went through all those homes this year and did adjust the values of homes in that area. Mr. Flaten was primarily concerned with the value given to the home across the street from him. He said that was basically the same home as his. Erickson pointed out that Mr. Flaten had a finished basement where his neighbor did not and that the house, as a whole, was of higher value. He said the neighbor's house has a two -car garage where Mr. Flaten had a three -car garage. NOTE: COUNCIL ACTION WAS TAKEN AT THE END OF THE MEETING ON EACH REQUEST. IN THE MINUTES, COUNCIL ACTION WILL FOLLOW THE ITEM. Mr. Flaten's property value went from $499,000 to $579,000. The consensus of the Council was to trust the assessor's read on this particular house. It was over 10 acres, it was in a very nice area, and it seemed that in this particular case, the increase was justified. The Council did not take any action on this property. Erickson described the next steps for appeal. He said if people wanted to continue to contest the valuation, the next step would be to go to the County Board of Review and from there, to the Minnesota Tax Court. Erickson said that at those levels there would be a more in depth analysis done by real estate professionals to analyze the value of the home. He said this analysis would not take into account the valuation of neighboring home, but would focus on the market value of the particular home being evaluated. Molly Hasek - 4645 Brook Street Hasek said the value of her property went from $186,000 to $221,000. Her primary issue with the valuation of her house is that the neighbor's house has been in a state of disrepair for over a year and a half. Their neighbor's construction project has impacted their current property values. They have a silt fence in their yard, the neighbors house does not have siding on it, and there are many unfinished parts of the house that bring the value of their house down. She said if they were to sell their house today, they could not realize the same value than if the neighbors house was not in a state of disrepair. She showed pictures of the neighbor's house and after looking at the pictures, the consensus of the Council was to reduce the property value from $221,000 to $210,000. This property was to be reevaluated next year based on the neighboring property's condition. Moved by Jim Lane, seconded by Phil Zietlow, to approve a $210,000 valuation. Motion passed unanimously. Medina Board of Review Meeting Minutes April 11, 2001 91 Ray Lunde - 972 Hamel Road Lunde said he owns a six unit apartment building on Hamel Road. Mr. Lunde said that his values went from $159,000 to $191,000 last year and then to $239,000 this year. He believed these were significant increases and did not believed they were warranted. It is a six -unit apartment; he only charges people $500.00 per month. It is a hobby for him and he is not looking to make a huge profit, and does not believe these types of increases are warranted. Erickson gave some examples of some other apartment properties. He said four-plexes in the area have been selling in that range per unit and higher. In Spring Park, apartments have been going for $45,000 a unit. Since there are no other apartment buildings in Medina, it is hard to compare; however, this one is at $39,000 a unit. Four-plexes have been going for $70,000 a unit. Erickson said, in this area, and in general, the value for apartments is very, very high and this seems to be right in the ballpark with others, if not lower. The consensus of the Council was that the value of this property was in the ballpark, if not low. No action was taken on this property. Mike Kilcovne - 1672 Homestead Trail Kilkoyne said that originally his house was assessed at $170,000 and that the assessor reduced it to $144,000, however, he believed that was still too high and explained in great detail, a number of problems with the physical condition of the house, and the limited ability for him to build a replacement house on the lot. After some further discussion, Phil Zietlow asked when he purchased and how much he purchased it for. Mr. Kilkoyne said that in 1995 they purchased the house for $140,000, however, he said they did not realize how bad a condition it was in. They were somewhat naive purchasers. Erickson said in this case, he believed that was a fair assessment. He believed the land alone actually could be valued for that amount. He cited other examples of properties that have sold in the area. He said this property is right across from Baker Park, enjoys quite a bit of the amenities, and is one of the few smaller lots in this area of Medina. After some discussion, the Council members agreed that the house was in poor condition and there were some concerns about the ability to develop the lot. Moved by Carolyn Smith, seconded by Phil Zietlow, to reduce the value to $133,700. Motion passed unanimously. Alan Noot -1950 South Ridge Drive Mr. Noot said last year their property value was $389,000. He said this year it is proposed to be raised to $448,000. He said they were interested in moving, but wanted to stay in the same district for their children, and when they saw the new property value, they were excited. However, they had a broker do a market analysis and after the market analysis, the broker came back with a selling range of $325,000 to $350,000. Medina Board of Review Meeting Minutes April 11, 2001 92 There were some questions about the house. Noot said the house was on 9.18 acres on County Road 24. The size of the house was 2,200 square feet finished. The assessors had actually gone through the house that evening. Erickson said it had nine -foot ceilings, three bedrooms, two and a half baths. Mr. Noot said that their broker was a very reputable and well respected realtor in the area. He said their house could only be sold between $320,000 and $350,000. They were very disheartened by this, however, they have been told that he is right on. Phil Zietlow said on the card it says there is 2,367 square feet finished, and that the home was built in 1992. After some discussion, the City Council, decided to reduce the increase to between 11 and 12%, an average for the area , from 15% as had been proposed. This lowered Mr. Noot's value to $432,000. Moved by Jim Lane, seconded by Carolyn Smith, to lower the value to $432,000. Motion passed unanimously. Garvey - 4350 Hamel Road Amy Garvey representing her father at 4350 Hamel Road, said her father had seen a dramatic increase in their property value. She said it went from $970,900 to $1,583,000. Erickson said this is a case where they found an area where they had not properly valued the land. He said Mr. Garvey had 63 acres of agricultural land valued at $159,000. Erickson said that the main portion of this increase was related to that. This value went from $159,000 to $686,000. He said that since this portion of the value is still being classified as agricultural, the net increase in taxes is not as dramatic as if it were classified as residential. Erickson said that this property is in the $1.5 to $2 million range for value. After some discussion, the Council agreed with the assessor's increase on the agricultural land value and took no action on this property. Morris Nelson - 4612 County Road 116 Nelson said he has a half -acre lot with a three bedroom 850 square foot home. He said he did not agree with the $45,000 value. He said the home needs remodeling and he was told that he would not be able to build on this lot again. He said since it is unbuildable, the lot is basically worthless. Phil Zietlow said that the City has allowed people to build on lots of record. He said characterizing this property as unbuildable, might not necessarily be true. In the end, the Council believed that this property was valued very low and did not require any additional adjustment. No action was taken. Medina Board of Review Meeting Minutes April 11, 2001 93 Dave Truax - 355 Lakeview Road Truax said he recently finished his basement in 1999. He said the permit value for this improvement was $8,500, however, his market value went from $220,000 to $282,000. He believed this was not comparable to other sales within the area. There were some questions about his house. He had 100 feet of lakeshore on Holy Name Lake and the house was built in 1969. Dave Truax thought that at most, his house would be valued at $250,000. There was some discussion about lakeshore property. Dave Truax said that it is not really a lake, they like it, but on some summer days, it can be pretty smelly. Carolyn Smith asked how many square feet were finished. There were a total of 3,100 square feet, 1,800 of the main floor, and about 80% of the basement. Erickson said that basic homes in Medina Morningside have been selling for between $150,000 and $180,000, with no lakeshore. Dave Truax said at a minimum his value has been diminished from the construction of the sewer pipe which has torn up his entire year. He said if they were to sell their house today, it would not be worth as much because there is a big mud pit in the backyard. Moved by Phil Zietlow, seconded by Jim Lane, to reduce the value to $260,000. Motion passed unanimously. Wallace Marx - 2700 Parkview Drive Mr. Marx sent a letter. In his letter he described a total property value increase of 52% from 2000 to 2002 and 38% from 2001 to 2002, or a value increase from $1,599,600 in 2001 to $2,203,500 in 2002. He believed this was an unreasonable increase in value for his properties. Erickson said a similar 38-acre parcel in the central part of Medina, without a house, sold for over a million dollars. After some discussion, it was decided to take no action on this request. Tom Dvkhoff - 615 Hamel Road Erickson said Mr. Dykhoff called him about three addresses, each were fourplexes. He said Mr. Dykhoff was not seeking any adjustment from this board, but was going directly to the County Board or to the Minnesota Tax Court. The values on his property went from $194,000 to $243,000, or around $60,000 per unit. Moved by John Ferris, seconded by Carolyn Smith, to adjourn the meeting at 9:25 p.m. Motion passe B. Ferris, Mayor Paul Robinson, Administrator Clerk -Treasurer Medina Board of Review Meeting Minutes April 11, 2001 94 (THIS PAGE LEFT BLANK INTENTIONALLY) Medina Board of Review Meeting Minutes April 11, 2001