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HomeMy WebLinkAbout05-08-2000 Board of Review Reconvened MinutesORONO BOARD OF REVIEW RECONVENED MONDAY, MAY 8, 2000 • ROLL The Orono Board of Review met on the above - mentioned date with the following members present: Mayor Gabriel Jabbour, Council Members Charles Kelley, Barbara Peterson, Richard Flint, and Bob Sansevere. Representing staff were City Administrator Ron Moorse, City Attorney Tom Barrett, Hennepin County Appraiser Kim Jensen, Hennepin County Senior Appraiser William Davy, and Recorder Alissa Winternheimer. Mayor Jabbour called the meeting to order at 6:35 p.m. APPROVAL OF MINUTES Kelley moved, and Peterson seconded, to approve the Minutes of the Orono Board of Review Meeting on April 26, 2000. Vote: Ayes 5, Nays 0. COUNCIL ACTION ON ASSESSOR'S RECOMMENDATION • 1. Matt Nicoll of 160 Smith Avenue, #02- 117 -23 -21 -0029 Mr. Nicoll stated that when he bought the house he accounted for the lot size, septic system, and his ability to expand later. If he had known that 2 -3 years later he would be hit with the cost of sewage hook up in the amount of $23- 30,000, he would have had the seller pay that or would have reduced purchase price of the house. He hired Paul Hoffner, who is certified with an SRA designation, to appraise the home. His appraisal included the 3 most recent property sales in Orono; all 3 sales were in higher end developments. Davy was given a copy of the assessment. After adjusting the most recent sale comparables for square footage and land value, he came up with an assessment of $525,000. Nicoll feels that should account for the cost of sewage hookup. Mayor Jabbour asked if he had an approved and functioning septic system. Nicoll responded he did. He felt he was being forced to hook up to sewage now to reduce the overall cost to the City. His system is as good or better than 90% of the septic systems in Orono. Mayor Jabbour stated that the assessor is the City's employee under contract and is an expert. Mayor Jabbour does not feel qualified to decide the value of anyone's home. The assessor found the home was valued at $595,000. Mayor Jabbour understood Nicoll's argument, but couldn't override the assessor. Davy stated he has reviewed the appraisal by Hoffner. The problem with the $525,000 assessment was that it was based on the purchase price of $450,000 7 years ago. Property • value has increased 5 % -10% each year over the last 7 years. When he looked at the adjustments made, he didn't see where Hoffner adjusted $25- 30,000 for the other properties. Davy felt he ORONO BOARD OF REVIEW RECONVENED MONDAY, MAY 8, 2000 1. Matt Nicoll of 160 Smith Avenue, #02- 117 -23 -21 -0029 continued could support his appraisal at $597,000. Special assessments are the burden of the seller, $597,000 is below what the house would sell for today, and a future hookup fee would not be a negative factor for a buyer in this price range. Mayor Jabbour stated that with a home with a perfectly functioning septic system, the owner is paying for two systems and one of them should be taken off the market price. Nicoll stated that if he were looking at a house that cost $400,000 and he knew that as soon as he closed on the house, he would be responsible for a $100,000 assessment, he would not close on that house. Therefore, the assessment does affect the potential sale of the property and the market value should be adjusted. Davy asked if the assessor should be adjusting for home equity loans too. Mayor Jabbour stated that he would not pick up someone else's tab when buying a property. • Mayor Jabbour moved, and Peterson seconded, that the Nicoll property's (#02- 117- 23 -21- 0029) market value be reduced by the sum of $25,000 to $572,000 based on fact that they have a full functioning septic system. Vote: Ayes 5, Nays 0. • 2. Mr. Otten of Otten Bros. Nursery Mr. Otten explained that the outlot behind the nursery has a proposed service road. The county has carried the road at a nominal fee of $200 because of the restrictions on it. Last year, when he added a loading dock, the value went from a nominal $200 to $40,000. The proposed value for this year is $50,000. Otten talked to Ray Shudy from the county and explained that the outlot is still a restricted easement. Otten stated that Orono has access to a well through the outlot and he still feels restricted as to its use. The rest of the property was also raised by $350,000. He is looking for relief on the service road. Mayor Jabbour stated that this is an unusual situation. If it's City land, he shouldn't pay taxes on it. Kelley stated that since the City hasn't made up its mind about the service road, he should be left alone. Peterson agreed. Kelley stated that this situation also reflects on Sid Reber's property. Mayor Jabbour stated that because Otten has limited use of the road, it should be kept at a nominal fee. Davy stated that it does have value because Otten is using it for his loading dock. Mayor Jabbour stated he understood that, but Otten's exclusive use is not by choice, it's simply because • the City hasn't decided what to do with the road. 2 *r ORONO BOARD OF REVIEW RECONVENED MONDAY, MAY 8, 2000 0 2. Mr. Otten of Otten Bros. Nursery continued Peterson suggested a value of $1,000 be placed on the outlot. Davy asked Otten if at some time in the future he would be willing to sell the outlot to the City for $1,000. Otten did not offer a reply. Kelley moved, and Peterson seconded, to assess the property at a value of $1000. Vote: Ayes 5, Nays 0. 3. Morris Nelson at 1900 Shoreline Drive #10- 117 -23 -42 -0018 and #10- 117 -23 -42 -0017 Mr. Nelson stated he was present to discuss the non - buildable property adjacent to his address. His understanding from discussions with Davy is that the property is valued at $182,000 because he and his wife own it. If anyone else owned the property it would be valued at $50,000. Nelson felt the value should be the same regardless of the owner. Davy stated that there are 2 side by side lots, one with a house and one vacant. The vacant lot is under the 2 acre minimum and is not valued as a buildable site. It would be valued at $300,000 if it were. They valued the property according to how it contributes to the primary property. The lots could be sold together as a 3 '/2 acre site with extra lakeshore frontage. The vacant lot's value is $182,000. The overall value of both properties is $495,000. The lot with the house is valued at $300,000. The highest and best use of the vacant lot is to the neighboring property as a part of the homestead. Mayor Jabbour asked Nelson if he provided the Council % ith a professional appraisal. Nelson replied he did not, he was arguing that the issue was treated differently in the past and he felt it should be assessed consistently. Sansevere asked the value of the lot last time it was appraised. Nelson stated it had been valued at $50,000. Mayor Jabbour stated it is hard for the Council to know the value of someone's property and that Nelson wasn't giving the Council enough tools to vote in his favor. Nelson stated that the property hasn't changed size and isn't contributing any more to his property now than before. Mayor Jabbour replied that the market has changed. He stated he was having a hard time agreeing or disagreeing with Nelson. Flint stated that the issue bothered him because there was a modest house on a beautiful property. If the City- constantly pushes property values up, it could force the house to be sold, torn down, and some other thing put up. Flint stated he favored reducing the 3. assessment. Mayor Jabbour stated the Council is forced by law to look at the market value. • Nelson stated that based on conversations with Davy, if he put the property in someone else's name it would become a $50,000 property. Sansevere asked Davy if that was what he told him. 3 ,f ORONO BOARD OF REVIEW RECONVENED MONDAY, MAY 8, 2000 Morris Nelson at 1900 Shoreline Drive #10- 117 -23 -42 -0018 and • #10- 117 -23 -42 -0017 continued Davy replied he had not said that. The Council has to look at how the lot contributes to the main property as a secondary parcel. Sansevere asked if the values would change if he sold the parcels separately. Davy stated that the value would not change significantly because it is lakeshore property. Nelson stated that a very nice older house will be lost as the property value is increased. He stated he wants consistent and fair treatment. Sansevere asked how many years Davy has made assessments for the City and why the jump in value occurred. Davy replied he has worked for the City for 2 years and last year the property was not part of the assessment area. Mayor Jabbour stated the City has had a great deal of inconsistency in its assessments. The current Assessor is working to make property values more consistent. Flint moved, and Peterson seconded, to reduce the assessment of the undeveloped parcel by $45,000. Mayor Jabbour asked how the council felt on the issue. Sansevere asked Flint how he arrived at $45,000. Flint replied he was trying to guess the value of the whole and felt that $450,000 was a • reasonable value of the property. Mayor Jabbour asked Nelson if he had considered combining the properties. He replied he had not. Mayor Jabbour stated he can't support Nelson's appeal without guidance. Vote Ayes 2, Nays 3 (Mayor Jabbour, Sansevere, Kelley). Peterson moved, and Sansevere seconded, to accept the Assessor's recommendations on the rest of the 2000 Estimated Market Values on properties in Orono. Vote: Ayes: 5, Nays 0. The Board of Review was adjourned at 7:12 p.m. ATTEST: 4/ , Linda S. Vee, City Clerk Gabriel abbour, Mayor • 4