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HomeMy WebLinkAbout04-21-2010 Board of Appeal and Equalization Minutes City of Orono (Official Publication) ASSESSMENT NOTICE �� � (LOCAL BOARD OF APPEAL AND -- EQUALIZATION) . N0710E IS HEREBY GIVEN,that the Local Board of Ap- ne�spapers peal and Equalization of the City of Orono in Hennepin County,Minnesota,will meet at the Orono Council Cham- AFFIDAVIT OF PUBLICATION bers,2780 Kelley Parkway, in said City of Orono at�:oo o'clock p m.on Wednesday,the 21 st day of April,2010,for the purpose of reviewing and correcting the assessment STATE OF MINNESOTA ) of said city for the year 2010. All persons considering �SS, themselves aggrieved by said assessment or who wish to complain that the property of another is assessed too low, COUNTY OF HENNEPIN ) are hereby notified to appear at said meeting and show cause for having such assessment corrected. Richard Hendrickson, being duly sworn on an oath,states or affirms that he is the Chief No complaint that another person is assessed too low will be acted upon until the person so assessed,or his agent, Financial Officer of the newspaper(s)known shall have been notified of such complaint. as Plymouth, Wayzata, Orono Sun-Sailor Dated this 23rd day of March,zoio. /s/ Linda S.Vee,City Clerk (April 8,2010)A2-AssessmentNotice and has full knowledge of the facts stated below: (A)The newspaper has complied with all of the requirements constituting qualifica- tion as a qualified newspaper as provid- ed by Minn. Stat. §331A.02, §331A.07, and other applicable laws as amended. (B)The printed public notice that is attached was published in said newspaper(s) once each week,for one successive week(s);it was first published on Thurs- day,the 8 day of April 2010, and was thereafter printed and published on every Thursday to and in- cluding Thursday, the day of ,2010;and printed below is a copy of the lower case alpha- bet from A to Z, both inclusive, which is hereby acknowledged as being the size and kind of type used in the composition and publication of the notice: ab nopqrstuvwxyz BY: � Z.tlE%�C`---�_._ CFO Subscribed and sworn to or affirmed before me on this 8 day of April , 2010. , c�/�' -� Notary Public �� "�;` � ', JUI�IA I HELKENN 1���� NOTAiiY PU�LIC-fdINNESOTA ��1.... P:1y Comm.Expires Jnn.31.2015 • CITY OF ORONO Local Board of Appeal and Equalization Wednesday, April 21, 2010 7:00 o'clock p.m. ROLL CALL The Orono Board of Review met on the above mentioned date with the following members present: Mayor James White, Council Members Doug Franchot and Jim Murphy. Representing City Staff were City Administrator Jessica Loftus, Hennepin County Assessors Thomas Kunik, Nathan Stulc, Joshua Hoogland, and Recorder Jackie Young. Mayor White called the meeting to order at 6:58 p.m. APPEALS 1. MICHAEL MISCHKE,1972 SHADYWOOD ROAD, PID#17- 117 -23 24 0025 Mischke stated he did have an assessor come out to look at his property, which contains a one bedroom, one bath house. The footings are on grade, which limits what you can do to improve the house. The assessor that visited the property indicated the house has little or no value. Mischke indicated he has two properties that he used for comparables. One property is located at 3200 Northshore Drive, and is a 50 -foot lot on the lakeshore. It listed for $610,000 and sold for $600,000. Mischke stated that property has an extra eight feet of lakeshore frontage, and is a much deeper lot. Mischke noted his property is two lots down from the channel and has a shared driveway, is on a busy road, and experiences a significant amount of noise since his property is located across the street from Lord Fletchers. Based on the square footage of his house, the value is $1300 per quare foot. Mischke reiterated that this is a very small property and you are limited in what you can do with it. Mischke stated his other comparable is located at 3635 Northshore Drive, which is also a 50 -foot lot. Mischke indicated he is not sure about the specifics. Mischke noted his neighbor's house located at 1978 Shadywood, with two baths, sold for $530,000 in October of 2009. It has double the lakeshore, three bedrooms, two bath, and a foundation. Mischke stated his property was appraised at $534,000 before the assessor reduced it to $501,000. Mischke stated when you compare the two properties, the land values are distorted and his is valued higher. Mischke stated he would like his valuation reduced. Mischke commented that presently two doors down from his property is another house that is currently for sale consisting of three bedrooms, two bath, and a full concrete basement. It is currently on the market for $565,000. The property has been on the market for the past two years and has not sold. In addition, the buyer has not had anybody look at it this spring. Mischke stated in his view his neighbor will not get that for the property due to the market. White asked what the age of the house is. • Mischke indicated it was originally constructed in 1912. Stulc stated the assessor who looked at the property is the chief assessor for Hopkins. PAGE 1 of 6 i,. , . CITY OF ORONO Local Board of Appeal and Equalization Wednesday, April 21, 2010 7:00 o'clock p.m. Mischke stated he reduced it from $534,000 to $501,000. White requested Mr. Mischke provide his information to the assessors. Murphy noted that the real estate market last year and the year before has been in a state of decline and that it is difficult to find comparables. The Board attempts to find obvious discrepancies in the valuations, such as an extra bathroom being included in the valuation. There are a number of 50 -foot wide lots on the lake. Developers are not buying property and the amount of development has declined in this market. Kunik stated there are sales that are not arms - length transactions available but that the Assessor's Office is not able to utilize those by state statute in valuing someone's property. Mischke asked why they are exempt. Kunik stated there are a number of things that the state considers non -arms length sales, such as bank sales and foreclosures. Stulc stated those types of sales will influence the market but that they are not allowed to take those into consideration when determining valuation of properties. is Kunik pointed out the Assessor's Office has certain parameters that they are required to follow. As the • assessor looks at a property, they look at sales that are deemed good and use those as comparables. Steve Harris, 3850 Watertown Road, noted that foreclosure sales accounted for 43 percent of the house sales in Minnesota last year. Kunik stated they are only looking at this area and not the rest of Minnesota. Foreclosures are generally not considered a significant influence and are not used as comparables. The Board directed the Hennepin County Assessor's Office contact Mr. Mischke to review his property and documentation. 2. BRAD BLANKENSNIP, 2605 LAFAYETTE ROAD, PID #21- 117 -23 21 -0007 Blankensnip stated he would have been in here last year to complain about his valuation but was unfortunately in the hospital. Blankensnip distributed some information to the Board. Blankensnip stated that he has a copy of an appraisal that was done by Molly Brown for a refinancing of his home and that he feels this appraisal is accurate. The process of the appeal was very thorough and is well documented. The difference between Hennepin County's valuation of $1.9 million and the real estate appraiser's valuation of $1.5 million is too great to ignore. Blankensnip noted that all of the comparables used in his appraisal are located on Lake Minnetonka. The comparables are properties that are roughly in the same condition as his and were built between 1947 and • 1952, which at today's standards would probably be a tear -down. Blankensnip stated that unfortunately some of the comparables are too far away to meet the standards, which is typical in this type of PAGE 2 of 6 • CITY OF ORONO Local Board of Appeal and Equalization Wednesday, April 21, 2010 7:00 o'clock p.m. marketplace but that his appraiser did make adjustments for those. Blankensnip noted Ms. Brown has been a full -time appraiser for the past four years and is independent. She was hired by Wells Fargo to conduct the appraisal as part of the refinancing. Blankensnip indicated he has also talked with friends and builders who construct homes in this price range and asked if they would buy his property for 1.5 million and was told they would not. There is currently not a market for this type of house. Murphy noted he had his home appraised in July at the same standards and that his appraisal came out $300,000 less than what his house was valued at by Hennepin County. The appraiser also had a difficult time finding comparables. Stulc stated they just received the appraisal yesterday and would need time to review it. White asked how many feet of lakeshore there is. Blankensnip indicated there is approximately 300 feet of lakeshore and that he does not feel $1.9 million is a fair price. The Board requested the Hennepin County Assessor's Office contact Mr. Blankensnip. Stulc stated they will contact each person that appears tonight and prepare a recommendation packet • based on all the information that has been submitted. Following this meeting of the Local Board of Appeal and Equalization, the residents will have the ability to go before the Hennepin County Board of Appeal and Equalization. A full appraisal will be completed and each resident will have the opportunity to appear before the Hennepin County Board. 3. BERT ADDISON, 3390 BAYSIDE ROAD, 305 Tonkawood Avenue, PID #05- 117 -23- 130029 Addison stated a couple of years ago they had an offer on the property but the prospective buyers were told by the City that it was an unbuildable lot. White asked how big the lot is. Addison indicated it is a 50 -foot lot. White asked why it would not be buildable. Addison stated they had a very nice offer on the lot but that they were told by the City approximately two years ago that it was not buildable. There is sewer to the lot. Addison stated he would like to know what the status of the lot is. White stated according to the Hennepin County Assessor's Office, it is a buildable lot. Murphy requested City Administrator Loftus check on the status of the lot. doKunik asked if they had a certain size structure that the prospective buyers wanted to put on the property and were turned down. PAGE 3 of 6 CITY OF ORONO Local Board of Appeal and Equalization Wednesday, April 21, 2010 7:00 o'clock p.m. . Addison indicated he does not have that information. 4. BILL WYATT, 4235 COUNTY ROAD 6, PID #31- 118 -23 12 0013 Wyatt indicated he appeared tonight to reserve his right to appear before the Hennepin County Board and had nothing else to add to the record. 5. CHRIS MANDY, 2175 WEBBER HILLS ROAD, PID#03 - 117 -23 -34 -0003 Mandy stated he purchased the home on February 11, 2010, for $389,000. They also received back $10,000 for the closing costs and the assessment for the sewer of $4,000. When they received their appraisal at closing, it valued the home at $390,000. The letter from the Hennepin County Assessor's Office values it at $455,000 for 2010. Mandy noted he did speak with the assessor and he came out and looked at the home. The assessor reduced the valuation from 455 to 430. White asked when the house was purchased. Mandy indicated they purchased the home in February of 2010. Mandy noted the listing history of the • house shows that the home was originally put on the market for $529,000, with the price being reduced routinely. Mandy noted the property sat on the market for 56 days before they purchased the home. White asked if the sale would count on this year's valuation. Stulc stated the Department of Revenue would look at this sale for the 2011 assessment. Stulc indicated the Assessor's Office will not ignore this sale and will review it. Stulc indicated they will be in contact with Mr. Mandy. Stulc noted this was a foreclosed house but that he will see how it compares to the normal real estate market. 6. BRAD BAKKE, 3235 CRYSTAL BAY ROAD, PID#17 - 117 -23 410009 Bakke stated between his home and both homes on either side of him, the last one you would pick would be his. Bakke stated the first property on the corner is valued at $20,000 less than his, the other adjoining home is valued at $23,000 less than his, and the house to the west is valued $86,000 less than his. In addition, a house a little further away is valued at $174,000 less than his. Bakke indicated he would trade his house for any one of those. Bakke stated he would like to meet with the assessor. Stulc noted he has not spoken with Mr. Bakke but that they would schedule an inspection and review the • information. PAGE 4 of 6 CITY OF ORONO Local Board of Appeal and Equalization Wednesday, April 21, 2010 • 7:00 o'clock p.m. 7. GREG SWENSON, 875 FOREST ARMS LANE, PID 07 -117 23 13 0041 Swenson stated he did put together a spread sheet that he would like to distribute to the Board. Swenson stated in his opinion the current valuation is too high. When you look at every property that sold for $600,000 to $1.9.million, you get 45 sales. When you narrow those down to properties that are located on Lake Minnetonka, you get 13 properties. Overall those properties sold for 85 percent of the current market valuation in 2009. Based on that, Swenson indicated his market value should have dropped by 15 percent rather than 8 percent. Swenson noted one specific property that is located next to his property has been for sale since November of 2008 at $799,000. That property is also on the lake. The valuation on the adjoining residence has been 48 percent more than his but that his land has been valued 50 percent more than the neighbors. If you put those together, Swenson indicated his property has been valued 3 percent more than his historically. Swenson stated when you look at the broader range of values, his house is worth around $800,000 and not $872,000. Kunik stated valuations also depend on the amount of frontage and whether it is a flag ship lot. Kunik indicated they would need to look at the information and property. 8. STEVE HARRIS, 3850 WATERTOWN ROAD, PID 32- 118 -23 -32 -0005 • Harris stated his taxable valuation has increased over the years from $1.4 million in 2006, $1.6 million in 2007, $1.9 million in 2008, and $2.047 million in 2010. Harris indicated he built the house and has resided in the residence for the past 23 years. The barn on the property is 75 years old. There have been no improvements or remodeling of the house since it was originally constructed. Harris indicated he does not understand why his valuation would increase that much since the market peaked in 2006 and valuations have been decreasing. Murphy noted that the valuations are generally about two years behind the market. White noted Mr. Harris has experienced approximately a 15 percent increase each year. Stulc noted they have not reviewed the property and would need to speak with Mr. Harris further. Harris provided three comparables to Mr. Stulc for his review. Harris noted his monthly tax payment is now higher than his original mortgage payment. #9. ROBERT HUMPHREY, 669 MTK. HIGHLANDS LANE, PID#06 - 117 -23 44 0007 Humphrey asked if the market value established in 2009 is a true market value. Stulc indicated it is. Humphrey stated he has lived in his residence for 23 years and has done very few upgrades to the property. The property is located on the lake and is less than one acre. Humphrey indicated he is now retired but would like to stay in the property and is in the process of refinancing the property. During the PAGE 5 of 6 „_ CITY OF ORONO Local Board of Appeal and Equalization Wednesday, April 21, 2010 7:00 o'clock p.m. refinancing process they were requested to obtain an appraisal by the mortgage company. The appraiser is a person who has lived in this area. Humphrey indicated the real estate appraisal was very thorough and the appraiser arrived at a figure of $850,000. The Hennepin County Assessor's Office says that the property is worth $1.243 million, which is a huge disparity of almost $400,000 from the real estate appraisal. Humphrey indicated in his view the appraiser has undervalued my property slightly and the County has overvalued the property. Humphrey indicated he would be willing to split the difference. Between 2008 and 2009, Humphrey indicated his property taxes went up 40 percent. Humphrey stated the assessor did visit his property and reduced his valuation by $50,000 less than what it is currently valued at. Humphrey indicated in his opinion there are two areas of disparity. One is the difference between the independent appraisal and the county appraisal. The other point of disparity is the increase in 2008 and 2009. Humphrey stated he would like the assessor to revisit his property. The realtors he has spoken to have said that lake property has dropped 20 to 25 percent. Humphrey stated if that is indeed the case, his property, based on the local appraisal of $1,059 million, would probably sell for between $869,250 and $927,200, but that his valuation is at $1,043 million, which is another huge disparity. Kunik stated the 20 to 25 percent decrease is probably the difference between the initial listing prices of the properties and what they sold for.. Humphrey stated that percentage was based on the sale price of the properties and not the listing price. Humphrey indicated he does have an appraisal that he would like the Assessor's Office to review. Written letters submitted: Cornelia Klitzke, 555 Oxford Road. ADJOURNMENT Murphy moved, Franchot seconded, to adjourn the Orono Local Board of Appeal and Equalization at 8:24 p.m., and to reconvene the hearing on Wednesday, May 5, 2010, at 7:00 p.m. VOTE: Ayes 3, Nays 0. ATTEST: in a S. Vee, City Clerk LJ tZ5-- a s M. White, Mayor PAGE 6 of 6 • •