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HomeMy WebLinkAboutCC BOARD OF REVIEW MINUTES 04141987 Meeting Sheet IIIIIIVIIIVIIIVIIIVIIIVIIIIIIIIIII 101669 BOX: 21 Folder: CC MINUTES AND AGENDAS 1987 Document: CC MINUTES 04141987 J C 2 TY OF S T _ ANTHONY • BOARD O F REV= EW APR= L 1 4 , 1 9 8 "7 The Board of Review was called to order by Mayor Sundland at 6: 30 P.M. Present: Councilmembers Marks, Ranallo, Enrooth, and Makowske, Sundland. Also present: David Childs, City Manager Robert Hanscom and Tom Holmes, Hennepin County Assessors Three property owners were present to discuss the assessed valuations the assessors had designated for their St. Anthony properties. The Mayor explained the procedure which would be followed that evening as well as the appeal process which they could pursue through the county and state tax agencies if they were not satisfied with the Council' s judgments that evening. Mayor Sundland also advised them that the Council had established a policy of only considering changes of more than $1,000 ( should have been $1, 500 according to last year' s minutes) in what might be perceived by a property owner to be an incorrect valuation of the property being considered. • Peter Mazurko Questions Increase in Valuations for Split Level Homes Mr. Mazurko told the Council that: -at his request, his property at 3216 Belden Drive had been given an on-site inspection April 9th, after which he had been advised by a letter from Mr. Hanscom that the formula originally used to determine his assessed valuation had been correct and that valuation would remain; -even after discussing the matter further with Mr. Hanscom that even- ing, he still questioned why his :.valuation should have risen 5. 60 while the valuation of a more expensive rambler next door which had been constructed along side his home after the tornado at the same time in 1983 , and inspected by the same inspector in 1984 , had only experienced a 1. 06% increase; -the rambler has 3 ,456 square feet of finished space where his split level has only 1 , 846 square feet; -his valuation had increased $5 ,600 from $98,300 to $103 ,000 this year where the rambler, which had cost much more to build than his house, had had its valuation raised from $113,100 to only $114,300 in 1987 ; • -he couldn' t understand why both structures weren' t appreciating at the same rate although Mr. Hanscom had told him it was his "style of house" which had caused his home to increase faster in value; • -2- -the assessor had indicated split levels were appreciating in valua- tion faster than ramblers and that it had been the computer which had made the determination of just how much more his valuation should be raised over the ramblers; -he would like to know just what type of data had been fed into the computer to make this determination; -he had to concede, however, that he perceived his home was worth more than it had been assessed for; but -he would be willing to borrow $11,000 to purchase the house next door if by doing so he could gain another 1,800 square feet of living space; -he also couldn' t quite understand why the three bedroom rambler on the other side of his property had only received a 1/2o raise in valuation; and -he also wondered why three properties sitting next to each other weren' t escalating in value at the same rate. • Assessor Hanscom' s Response -said although the assessors do rely heavily upon the computers to make the final calculations, those figures are always based on data like the sales of like properties and characteristics of the pro- perties being evaluated which are put in by the assessors themselves; -indicated the assessors by analyzing information in the data bank can pretty much tell how the market is going in relation to a specific type of property; -reported that this year in looking at split levels, the assessor had perceived they appeared to be further short of the market than ram- blers and therefore deserved a larger increase in valuation to main- tain a good level of market value; -told Mr. Mazurko the assessor is satisfied the equity is there to support the raise in valuation for his house, as is true, with maybe a few exceptions, of most houses in St. Anthony; -perceived the evaluation process in the City is better than it has ever been but the assessors are working hard to make it even better; -added that 250 of the City is evaluated on an individual, door-to- door basis each year and the City takes an active role in seeing that those evaluations are correct. • Mayor Sundland told Mr. Mazurko that, since he had already had a physical inspection of his property, the Council would probably not include it in -3- those properties for which inspections would be ordered that evening. However, he reiterated the options the property owner had to appeal the assessor' s evaluation, saying he had no idea what the ratio was for successful appeals in the past. Mr. Mazurko Indicates He Would Carry His Concerns No Further -said he had only come to this hearing to get a better understanding of how valuations are determined; -indicated he would not go any further now that he had admitted he believed his home was worth at least as much as it had been assessed; -was concerned that he might be looking at a $5 ,600 raise in valuation each year when the owners of the ramblers on each side of him would be experiencing raises of $1,200 and less; -said, if that continued, he would be selling his house and buying a rambler; -still wondered why properties sitting next to each other weren' t escalating in value at the same rate; -believed nothing had really changed since the 1984 inspection each • home had been given except that the rambler' s owner had finished off his basement which should have at least raised its valuation to the same level as his; -questioned what sort of data the assessors put into the computer be- cause he didn' t think there were that many split levels in St. . Anthony. Mr. Hanscom. responded by saying: -he thought there were a good number of split levels in St. Anthony and not only these, but all split levels county-wide were considered in making this year' s determination; -on a general level, all split levels were being assessed more in Hennepin County; however, -he did not know whether or not the same treatment might be given to this type of property in Ramsey County. Mr. Hanscom conceded that "assessing was not an exact science" because all homes were probably not going to be sold for the market value placed on them by realtors, who rarely agree with each other on those estimates. Mayor Sundland told Mr. Mazurko he appreciated his honest assessment of his home' s value because the Council would become very concerned if a • number of homeowners reported their homes were worth less than they were assessed. -4- Mr. Hanscom told Councilmember Ranallo the reason there had been a deviation between the raises the two ramblers experienced could have been because of different characteristics of the two properties. He said the assessors had looked at the Parade of Homes last year to see how costs of various aspects of properties like decks, finished basements, fireplaces, etc. had escalated and that information had been fed into the computers. Therefore, one of the ramblers might have received a higher valuation because of a fireplace or something else the other didn' t have, he added. Mr. Childs pointed out that Mr. Mazurko had said one of the rambler' s owners had finished off his basement since the last physical examination of the property in 1984 and those improvements had probably not yet been included in the valuation assessment. Mr. Hanscom agreed that the only way the assessors can know about such improvements without inspections is if a building permit is issued by the City. This would be remedied when that quadrant is inspected by the assessors in 1988. Mr. Mazurko reported the interior of his previous home across from St. Charles Church had never been physically inspected while he lived there between 1973 and 1983 . He also denied ever receiving a notice that the assessor had attempted such an inspection during that period. LaVonne Fritz, 3105 Croft Drive, who was also present to protest her assessed valuation, told the assessors that "never in the 26 years I 've lived in my home had I had a physical inspection of my property by the County Assessors. " No action was deemed necessary related to Mr. Mazurko' s property. On-site Inspection of Office Condo in Northgate Office Park Requested by Tim Tromiczak Mr. Tromiczak told the Councilmembers: -commercial evaluations had been explained to him by Mr. Holmes who had said his valuation was based on comparables for recently sold condos in this and similar office complexes; -his own valuation had gone from $81, 300 to $81,400 which sounded fair to him since the last condo sale in the office park had been for $94 ,000 until he had gotten appraisals from three different realtors which had been for much less than his assessed valuations; -Thorpe Realty had told him the best he could hope to sell his condo would be between $68,100 and $71,000 because the new tax laws made such investments less desirable. Calhoun Realty had suggested the property would sell for around $70, 500 and a local realtor, Dave Forsythe, had estimated the condo would probably only sell for $69,000 ; -5- -he was also given to understand most commercial property values had dropped 17% since the new tax law had passed. The office condo owner said further: -his condo is divided into three 360 square foot offices for which he asks rents of $295, including utilities; -he has had a 30% vacancy for the past six months but, even with a 100% occupancy, he would be paying 1/3 of this income in taxes on the property; -he considered the rents in the complex to be realistic even though there is a 40% vacancy; and -he perceives it would be necessary for him to go to the bank for help before he could even sell his property or else continue to lose money every month. When he asked the realtors what he could do to solve his dilemma, Mr. Tromiczak said he was told, if he could get his taxes reduced, the condo might be perceived by prospective buyers to be more profitable and its value might even be raised up to the $75,900 he paid for it in the fall of 1985. • Assessors Response Mr. Holmes indicated it had been he who had set the assessed value on Mr. Tromiczak' s condo and had explained to him over the phone that: -all sales which had taken place at the Northgate had been original developer sales to first owners and each and every one of them had been in excess of what their 1987 assessed valuations were; -no secondary sales had occured which could provide a basis for reducing those valuations; -the condos which have been sold had been purchased over the last two years. There had been gradual price escalations for those properties during that period and those prices have all been met. Mr. Hanscom added that: -residential and commercial condos started out as very popular pro- perties to own; -assessors look at the sales a year prior to the assessments so any slide in value since January, 1987 , would not be reflected in this year' s evaluations; • -properties that sell in 1987 will be used to determine the 1988 assessment. Councilmember Enrooth wondered whether there was any provision for rebating a 12% to 15% differential which might exist in this case. He said if the last sales in this complex preceded the tax law changes that might account for the difference between what was paid for a condo in 1986 and what could be gotten for one after last December. He and Councilmember Ranallo both said they doubted the property in question was worth as much now as it had been in early 1986. Mr. Hanscom told Councilmember Marks the assessors are continually evaluating commercial property and there is no evidence in the market that office space in general has been adversely impacted by the change in tax laws. To the contrary, that market has been consistently going up. He also said he could not predict how his office would react to realtors ' appraisals of this property and was not certain whether the sales which had been used as a basis for Mr. Tromiczak' s valuations had been made before or after the new tax laws had gone into effect. Council Action Motion by Marks, seconded by Enrooth to request the Hennepin County Assessors reevaluate the Northgate condo property owned by Tim Tromiczak, 1797 Spruce Court, and to report back the results of that reconsideration when the Board reconvenes in two weeks. • Motion carried unanimously. LaVonne Fritz to Appeal Reevaluation of Her Property at 3105 Croft Drive to the Hennepin Board of Equalization The property owner indicated the following about her property: -she and her ex-husband had literally "hand built the entire split level except for digging the basement, between 1961 and 1962" ; -her valuation had increased $29,000 or 43% from $68,000 in 1981 to $97,000 in 1987 ; -this included a 32% raise she had experienced in 1982 when the pro- perty was transferred to her name after her divorce. That increase had been reduced to 26% through the efforts of Hennepin County Com- missioner Sam Sivanich. None of this had come about because of an assessor' s inspection and no notice of an attempt to inspect her property had ever been left at her door. Ms. Fritz said because she had no response to her phone call to the assessors protesting her valuation raise, she had written them a letter. Her first response to that had been a call to her at work last Friday asking her to get home before 4:00 P.M. to enable the assessor to inspect her home. She said this had been very difficult for her to do because • she was in a training program at the Health Department and she had let the young assessor know she was not happy about that when she met him at • -7- 4: 00. The assessor had been very courteous in spite of this, the property owner said and following his inspection had adjusted her valuation down to $93 ,500 . However, Ms. Fritz said, she had taken advantage of three realtors ' offers to give a free appraisal of her home and they were all within $4,000 of each other in suggesting she might get from $86, 000 to $90,000 for her home, but only after she had spent between $7,000 and $8,000 to remodel her kitchen and finish off the second bathroom she has in the basement. Ms. Fritz said her home has only one fireplace, one ceramic bath and no deck and from what she has observed from sales in the Village, she does not believe her split level home is assessed at or below its market value. She said Bill Bowerman' s split level house which is near her had sold for $107 ,000 last year, but she perceived that house had been far superior to her home in quality. She concluded by saying she perceived the assessors "were doing a number on me. " This statement drew the following responses: Sundland -pointed out that his own home, which he had built for $20,000, had increased in value at about the same rate as • Ms. Fritz ' s home over the years. Ranallo -suggested a paid-for appraisal might have come in higher; -indicated the County had probably picked up on the change of property owners in 1982 and raised its assessed valua- tion without an inspection. Hanscom -said he had talked to the assessor who had inspected the Fritz property and supported his estimate that the valua- tion should be reduced no further than the $93 , 500; -told Councilmember Marks the Board of Equalization would weigh a paid-for, market rate, real estate appraisal against the assessor' s recommendation and he had no idea which would prevail. Marks -told Ms. Fritz it sounded to him like she might have better success taking her case to the Board of Equalization than she would having another inspection of her property. The property owner agreed, saying she had only wanted to make a statement at this hearing and had intended at the beginning to address the Board of Equalization about her concerns with what happens to property after a divorce, perceiving the treatment she received in this case was one of the reasons women and children end up being poor. • -8- Council Action The following motion was made to enable Ms. Fritz to take the second step in the appeal procedure: Motion by Ranallo, seconded by Marks to uphold the assessed valuation the Hennepin County Assessors Office had placed on the property at 3105 Croft Drive after they had made an on-site inspection of the premises. Motion carried unanimously. BOARD OF REVIEW RECESSED Motion by Ranailo, seconded by Marks to recess the April 14, 1987 Board of Review at 7 : 35 P.M. to be reconvened at 7: 30 P.M. at the start of the Council' s April 28, 1987 meeting. Motion carried unanimously. Respectfully submitted, Helen Crowe, Secretary • Mayor ATTEST: City Clerk •