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HomeMy WebLinkAboutBoard of Appeals and Equalization - 04/19/2007 APPROVED MINUTES EDEN PRAIRIE BOARD OF APPEAL AND EQUALIZATION THURSDAY,APRIL 19, 2007 7:00 P.M., CITY CENTER Council Chambers 8080 Mitchell Road BOARD MEMBERS PRESENT: Patricia Pidcock, Chair; Mike Best, Vice Chair; Brian Duoos; Doug Malam and Annette O'Connor CITY STAFF PRESENT: Steve Sinell, City Assessor; Staff Appraisers: Dave Buswell, Jody Carlson, Barb Cook, John Sams, and Colin Schmidt; Assessing Technician Lisa Ramsey; and Carol Pelzel, Recording Secretary I. CALL MEETING TO ORDER The meeting was called to order by Chair Pidcock at 7:00 p.m. The Board members introduced themselves presenting a brief background of their experience. II. PROCEDURAL INFORMATION BY STEVE SINELL City Assessor Sinell presented an overview of the process and explained that the purpose of the local Board of Appeal and Equalization is to hear appeals regarding current year market value and classification of properties. He reminded the Board that they cannot discuss these cases outside of a public forum in violation of the Open Meeting law. He explained that the Board is appointed by the City Council and the Council has delegated to this Board their powers and duties with regard to the current year market value. The Board shall serve at the direction and discretion of the City Council. Sinell reviewed Minnesota Statutes 274.01 and explained the law regarding refusal to allow inspection. The Board may not make an individual market value adjustment or classification change that would benefit the property if the owner or other person having control over the property has refused the assessor access to inspect the property. Sinell also reviewed the definition of market value and explained undue stimulus. III. ORDER OF BUSINESS A. Hear Personal Appeals Appeal No. 4 —Stan Tieva, 9680 Clover Circle Tieva explained that the Hennepin County web site states that market value should represent the most possible selling price of the property as of the assessment date. Tieva said he believes his estimated market value of$428,300 is too high and should be set at$385,000. Tieva presented to the Board five comparables surrounding his property that are valued less than his. He said he feels the comparables used by the City appraiser are unfair comparables and there is no BOARD OF APPEAL AND EQUALIZATION April 19, 2007 Page 2 justification for valuing his property at$428,300. He feels his valuation should fall in line with the comparables he presented. A recent market analysis done by a local realtor showed ten houses with four to five bedrooms recently sold for an average sale price of$313,600. Tieva stated that for the last five years his valuation has increased each year and the only change he made to his house was a kitchen upgrade costing $4,300. Tieva said he has lived in the house for 19 years. He said the idea of raising values every year has gotten out of control. Pidcock asked how the City appraiser arrived at this valuation. Staff appraiser Carlson explained that she chose the comparables that were two stories close to the square footage of the property in question and located in the vicinity. All of the comparables are within one mile of the applicant's home. Sinell reminded the Board that the assessment date is January 2, 2007. Depending on the market, they cannot go back. After reviewing the comparables presented, Duoos suggested that they lower the estimated market value to $420,000. He feels this is a fair valuation. O'Connor said she is not sure if the property should be valued over$400,000 or under$400,000. Pidcock said that based on the market for the last six months, she also questions the value of this property. Knowing how the market has been in that particular area, she does not feel that the $428,300 value is appropriate. Best said he also has some concerns with valuing this house over$400,000. MOTION: Motion was made by O'Connor, seconded by Malam, in Appeal No. 4 to reduce the estimated market value to $395,000 for the property located at 9680 Clover Circle. The motion carried 4-1 with Duoos voting nay. Duoos said he believes this property is worth more than $395,000 but not$440,000. Appeal No. 9 —Ramanathan Subramanian, 15323 Plumstone Drive Subramanian explained that after much negotiation, he was able to purchase this house for $450,000 and he would like the property to be assessed at that value at least for the first year. He said he has no comparables but did purchase this house four months ago for$450,000. Subramanian stated that he would like to enjoy the benefit of his negotiations for at least one year. Sinell said he does not disagree that the applicant paid $450,000 for the property; however, a quick sale was wanted in December. Comparable#1 is located across the street from the property in question and that same house sold in August for $509,998. Malam explained that there is incredible pressure from the developer to sell these homes at the end of the quarter and especially at the end of the year to meet their quotas. At the time the applicant purchased his home the sales were probably slow. Malam said it appears that the applicant was at the right place at the right time. Duoos said he has seen homes listed at $700,000 to $800,000 dropping $100,000 to move them. He said he agrees with Malam and the applicant did get a great deal. O'Connor reminded the applicant that their task is to determine if this property could be sold at what it is valued at. If they continue to have a market like they BOARD OF APPEAL AND EQUALIZATION April 19, 2007 Page 3 have now and sales such as this continue to occur in this neighborhood, home values may come down. O'Connor said that what the applicant paid for the home is really irrelevant. The Board has to decide what the value of this home is as of January 1, 2007. Duoos said he believes the applicant could put this home on the market this summer for $450,000. He was in the right place at the right time and did benefit in closing before January 2. He does not necessarily agree that since the applicant paid $450,000 that that is the value. Duoos suggested that they value the home at$475,000. Malam pointed out that one and a half years ago it was predicted that they would sell 25 houses in this development. They have only sold five in the two years that they have been located there. This is the only phase in the Hennepin Village development that has detached single-family homes. MOTION: Motion was made by Malam, seconded by Best, in Appeal No. 9, to reduce the estimated market value to $450,000 for the property located at 15323 Plumstone Drive. The motion carried 4-1 with Pidcock voting nay. Appeal No. 10—Mark Saastad, 12272 Jack Pine Trail Saastad explained that he feels his property should be valued at$106,000 because of the major water problems he has. His sump pump runs continuously and pumps thousands of gallons of water. Nothing he has done has prevented this water problem. Saastad said he purchased the house in 1987. They thought building up the soil around the foundation would help to alleviate the water problem but that did not work. Saastad said it is like having an underground stream. Pidcock pointed out that by law they cannot adjust Saastad's property value until an appraiser has been in the house. She asked that Saastad contact the City appraiser to set up a time for an inspection. Saastad said he would call the City and set up an appointment. MOTION: Motion was made by Best, seconded by O'Connor, in Appeal No. 10 to refer this item to the Assessor to complete review. The motion carried 5-0. Appeal No. 13 —John Severson, 17201 Trenton Lane Severson said he was appearing before the Board to contest the proposed $39,600 increase in value to his property. This summer the City appraiser came into his home and found that his basement was finished. Severson explained that the previous owner had used left over exterior material to finish the basement. It is the kind of material you would expect to see in a tree house and in their eyes, it would be a complete tear out. He pointed out that the value of the neighbor's homes on either side of his increased only about$9,000. Severson assumed that the additional $30,000 increase in value was because of the basement being completed. He indicated that their value should only be 15 to 20 percent more than the figure of his neighbors because that is the amount of additional square footage they have. They feel$10,500 for market appreciation would BOARD OF APPEAL AND EQUALIZATION April 19, 2007 Page 4 be fair. Severson pointed out that they have a "substandard" finished basement. They are going to have to tear everything out and start over so it is actually going to end up costing him money. Severson said they are asking that the increase be limited to $15,000 and the property should be valued at around $515,000 rather than $540,000. Sinell explained that they have five comparables in the neighborhood that are the same size. One of those sold in January, 2007 for$599,900. Adjustments totaling $35,000 were made. Also, a very similar house slightly smaller sold for$545,000 and the appropriate adjustments were made for that. Sinell said staff feels that the comps in the neighborhood support the original assessment. Severson said he feels $515,000 is a more fair value with current market conditions and based on the comparables across the street. Malam said he had several clients in the area and they sold their homes in the $530,000 range. He pointed out that Severson paid $514,000 for his home and property values have increased more than $1,000 in one and a half years. MOTION: Motion was made by Malam, seconded by Best, in Appeal No. 13, to sustain the current estimated market value of$540,300 for the property located at 17201 Trenton Lane. The motion carried 5-0. Appeal No. 16 —Christopher and Jennifer Wells, 17271 Acorn Ridge Sinell explained that an appraiser has not yet gone through this property and staff will perform a complete review. Jennifer Wells said that in 2006 their property was valued at$660,600 and the assessed value for 2007 was $718,400. When they received the notice in January, 2006, they questioned the large increase because they had not made any improvements to the property and their basement is not finished. Wells said it was her understanding that their street was in a special group to reassess to market value. Wells presented comparables located in their neighborhood. The first sold for $720,000 and is located directly across the street from their home. This home had upgrades that their home does not have including a finished basement. Deducting the upgrades, a comparable price to their home would be $681,000. A second home sold for $850,000. Based on a head-to- head comparison taking into account additional upgrades, a finished basement and the developer price increase, the value of that home could be estimated at$691,000. Wells said that based on the reasons presented, they believe the fair market value for their home should be around $691,000. This value would also be based on comparables in the neighborhood. Sinell pointed out that they would do comparables including premium lots and custom built homes. Unfortunately, many of the appeals came in the last day and City staff has been unable to complete the reviews. BOARD OF APPEAL AND EQUALIZATION April 19, 2007 Page 5 Recess A short recess was called after which the meeting was reconvened at 8:45 p.m. Appeal No. 32—Yuri & Boni Berndt, 10180 Bluff Road Yuri Berndt explained that they purchased their home in September, 2006 for$732,000 with an assessed value as of January 2, 2007 of$744,200. Based upon some statistics, Berndt said they feel that the assessment is substantially unequal to other similarly situated taxpayers in the City and surrounding neighborhood. He stated that their house was purchased three months from the end of the year and they do not feel their value should have an annualized increase of 7 percent over three months. Berndt pointed out that the Minnesota Revenue's Property Values and Assessment Practices Report provides a summary of assessed property value and assessment practices with the State of Minnesota. Based upon this information and the dollar value of the property, the assessed value of$744,200 is substantially unequal to the assessed value of other residential classified properties located in the City. Pidcock pointed out that according to Hennepin County, they are expected to be at 100 percent of market value. Berndt presented comparable sales in the surrounding neighborhood. The comparables show an average sales ratio of properties not assessed for value in excess of their purchase price is 91.953 percent. Using the ratios, they are looking at a value of about$675,000 for his property. Sinell pointed out that the study Berndt refers to is for 2005 assessment. The Department of Revenue looks at values after the assessment is established. Eden Prairie is at about 97 percent value on average. The Department of Revenue and the Minnesota Tax Court have determined that the assessment should be between 90 and 105 percent. Eden Prairie has met the market value standard and there were no adjustments for unequal assessments to any individual property. This only occurs when the assessment falls below 90 percent and they would then move back 7 percent, not to 12 percent. Sinell said staff would be willing to reduce the value of this property to $732,000. Berndt said he feels they should be treated the same as the neighbor down the street. The City does have the ability to make an adjustment as long as it is equal. In response to a question from Best, Berndt explained that he purchased the property on September 19, 2006 and paid $732,000 for it. He said he wants to be treated like everyone else in his neighborhood. His neighbor paid $13,000 more for his home than he did and it is assessed somewhere in the $640,000 range. O'Connor explained that properties on Bluff Road capture higher prices than some on other streets in the same neighborhood. Prices vary in the neighborhood depending on the builder. O'Connor said it is a difficult time when you paid $732,000 for the house and the market has adjusted and you are now saying it should be at$675,000. Berndt said he is not saying that $675,000 is a fair market value but that the assessed value is substantially unequal to other individuals in his neighborhood. BOARD OF APPEAL AND EQUALIZATION April 19, 2007 Page 6 Pidcock explained that this Board's job is to determine what the fair market value of this home is as of January 2, 2007. MOTION: Motion was made by Duoos, seconded by Best, in Appeal No. 32, to reduce the estimated market value to $732,000 for the property located at 10180 Bluff Road. The motion carried 5-0. Appeal No. 48 —Herbert Dahl, 6954 Tartan Curve Dahl explained that he does have an inspection scheduled for tomorrow. He does not agree with the assessment from last year. Dahl said he purchased the house 29 years ago and has not made any significant updates. He has not replaced the windows and the house has the original masonite siding. The kitchen has not been remodeled and the master bath is rather small. The house can use some updating. Pidcock said there is nothing they can do at this time since he has not yet had an inspection. If he cannot reach an agreement with the appraiser he should come back on May 8. MOTION: Motion was made by Best, seconded by O'Connor, in Appeal No. 48 to refer this item to the Assessor to complete review. The motion carried 5-0. C. Hear Other Appeals Appeal No. 58 —Margaret Wood, 14309 Chestnut Drive Wood presented some comparisons in her development. A realtor looked at her home in October and valued it at$189,000 and it was suggested that she make $3,000 worth of improvements to update the property. Wood said she thought of selling the house in March for$184,000. MOTION: Motion was made by Best, seconded by Duoos, to refer this item to the Assessor to complete a review. The motion carried 5-0. B. Review Written Appeals Appeal No. 1 —Norma Beasant, 8266 Labont Way MOTION: Motion was made by Duoos, seconded by O'Connor, in Appeal No. 1 to sustain the estimated market value of$289,000 for the property located at 8266 Labont Way. The motion carried 5-0. BOARD OF APPEAL AND EQUALIZATION April 19, 2007 Page 7 Appeal No. 5 —David Ingber, 8943 Sylvan Ridize MOTION: Motion was made by Best, seconded by Duoos, in Appeal No. 5 to sustain the estimated market value of$526,000 for the property located at 8943 Sylvan Ridge. The motion carried 5-0. Appeal No. 6 —Daryl Horak, 12346 Oxbow Drive MOTION: Motion was made by Malam, seconded by Best, in Appeal No. 6 to sustain the estimated market value of$273,500 for the property located at 12346 Oxbow Drive. The motion carried 5-0. Appeal No. 7 —Doug Stansbury, 9439 Olympia Drive MOTION: Motion was made by Best, seconded by Duoos, in Appeal No. 7 to refer this item to the Assessor to complete review. The motion carried 5-0. Appeal No. 8 —Joseph Difrancesco, 6317 Chatham WaX MOTION: Motion was made by Best, seconded by Duoos, in Appeal No. 8 to refer this item to the Assessor to complete review and to continue discussions. The motion carried 5-0. Appeal No. 14 —Melissa Penrose, 9306 Amsden Way MOTION: Motion was made by Best, seconded by Duoos, in Appeal No. 14 to refer this item to the Assessor to complete review. The motion carried 5-0. Appeal No. 15 —Andy Peczalski, 9873 Balmoral Lane MOTION: Motion was made by Best, seconded by O'Connor, in Appeal No. 15 to refer this item to the Assessor to complete review. The motion carried 5-0. Appeal No. 16 —Christopher& Jennifer Wells, 17271 Acorn Ridge MOTION: Motion was made by Duoos, seconded by O'Connor, in Appeal No. 16 to refer this item to the Assessor to complete review. The motion carried 5-0. Appeal#19 —Michael Dungan, 7854 Dover Cove MOTION: Motion was made by Malam, seconded by O'Connor, in Appeal No. 19 to refer this item to the Assessor to complete review. The motion carried 5-0. BOARD OF APPEAL AND EQUALIZATION April 19, 2007 Page 8 Appeal#20—Kari Larsen, 10380 Meade Lane MOTION: Motion was made by Best, seconded by Duoos, in Appeal No. 20 to refer this item to the Assessor to complete review. The motion carried 5-0. Appeal#21 —John & Donna Thomas, 15801 Cedar Ridge Rd. MOTION: Motion was made by Best, seconded by O'Connor, in Appeal No. 21 to refer this item to the Assessor to complete review. The motion carried 5-0. Appeal#23 —Mong-Hang Nguyen, 8700 Darnel Road MOTION: Motion was made by Best, seconded by O'Connor, in Appeal No. 23 to refer this item to the Assessor to complete review. The motion carried 5-0. Appeal#26—James Rohde, 12473 Riverview Road MOTION: Motion was made by Malam, seconded by O'Connor, in Appeal No. 26 to refer this item to the Assessor to complete review. The motion carried 5-0. Appeal#28 —Jim& Sara Kunitz, 9220 Talus Circle MOTION: Motion was made by Best, seconded by O'Connor, in Appeal No. 28 to refer this item to the Assessor to complete review. The motion carried 5-0. Appeal#31 —John Goergen, 6805 Lorena Lane MOTION: Motion was made by O'Connor, seconded by Malam, in Appeal No. 31 to refer this item to the Assessor to complete review. The motion carried 5-0. Appeal#34 —Nicole Corbin, 9740 Tree Farm Road MOTION: Motion was made by O'Connor, seconded by Malam, in Appeal No. 34 to refer this item to the Assessor to complete review. The motion carried 5-0. Appeal#38 —Glen & Karen Vanic, 14864 Boulder Pointe Rd. MOTION: Motion was made by Malam, seconded by O'Connor, in Appeal No. 38 to refer this item to the Assessor to complete review. The motion carried 5-0. Appeal#39 —Kevin Murphy, 9492 OlyMpia Drive MOTION: Motion was made by O'Connor, seconded by Duoos, in Appeal No. 39 to refer this item to the Assessor to complete review. The motion carried 5-0. BOARD OF APPEAL AND EQUALIZATION April 19, 2007 Page 9 Appeal#42 —G. Patrick Bonnie & Lynn Krapf, 10485 Manton Lane MOTION: Motion was made by Malam, seconded by Best, in Appeal No. 42 to refer this item to the Assessor to complete review. The motion carried 5-0. Appeal#45 —David Duhaime & Roxanne Emmerich, 11534 Chamberlain Ct. MOTION: Motion was made by O'Connor, seconded by Best, in Appeal No. 45 to refer this item to the Assessor to complete review. The motion carried 5-0. Appeal#46—Caroline Nelson, 9049 McGuffey Road MOTION: Motion was made by O'Connor, seconded by Duoos, in Appeal No. 46 to refer this item to the Assessor to complete review. The motion carried 5-0. Appeal#47 —Steven & Michele Kuebler, 17682 Steadiniz Road MOTION: Motion was made by Best, seconded by O'Connor, in Appeal No. 47 to refer this item to the Assessor to complete review. The motion carried 5-0. Appeal#51 —Shravan Pargal, 16997 New Market Drive MOTION: Motion was made by O'Connor, seconded by Best, in Appeal No. 51 to refer this item to the Assessor to complete review. The motion carried 5-0. Appeal#52—Tom Klingen, 7042 Willow Creek Road MOTION: Motion was made by O'Connor, seconded by Malam, in Appeal No. 52 to refer this item to the Assessor to complete review. The motion carried 5-0. Appeal#53 —Matthew & Kathryn Johnson, 11553 Welters Way MOTION: Motion was made by O'Connor, seconded by Malam, in Appeal No. 53 to refer this item to the Assessor to complete review. The motion carried 5-0. Appeal #55 — Kenneth Clinton, 9115 Victoria Drive MOTION: Motion was made by O'Connor, seconded by Best, in Appeal No. 55 to refer this item to the Assessor to complete review. The motion carried 5-0. BOARD OF APPEAL AND EQUALIZATION April 19, 2007 Page 10 D. Schedule next meeting. MOTION: Motion was made by Malam, seconded by O'Connor, to schedule the next meeting of the Board of Appeal and Equalization for Tuesday, May 8, 2007, at 7:00 p.m. The motion carried 5-0. E. Close the Board of Appeal and Equalization Meeting to Additional Appeals MOTION: Motion was made by Best, seconded by O'Connor, to close the Board of Appeal and Equalization meeting to additional appeals. The motion carried 5-0. III. CONTINUE THE BOARD OF APPEAL AND EQUALIZATION MEETING MOTION: Motion was made by O'Connor, seconded by Malam, to continue the Board of Appeal and Equalization meeting to May 8, 2007. The motion carried 5-0 and the meeting was continued at 9:20 p.m.