Loading...
HomeMy WebLinkAboutBoard of Appeals and Equalization - 04/24/2003 APPROVED MINUTES EDEN PRAIRIE BOARD OF APPEAL AND EQUALIZATION THURSDAY,APRIL 24, 2003 7:00 P.M. City Center Council Chambers BOARD MEMBERS PRESENT: Patricia Pidcock, Chair; Judy Ilstrup, Doug Malam and Annette O'Connor BOARD MEMBERS ABSENT: Mike Best CITY STAFF PRESENT: Steve Sinell, City Assessor; Staff Appraisers: John Sams, Barb Cook, Jody Carlson and Colin Schmidt; Carol Pelzel, Recording Secretary I. CALL MEETING TO ORDER The meeting was called to order by Chair Pidcock at 7:00 p.m. Sinell presented an overview of the process and explained that this process is provided by State Statute to give those persons who feel the value or classification assigned by the City Assessor's office is incorrect the opportunity to appeal to someone other than the local assessor. Sinell explained that for the past ten years the City Council has appointed a special Board delegating their duties to that Board. State Statute provides for review of the current year's classification for taxes payable in 2004. State law values property at market value and the Board cannot adopt a different standard of value. Sinell further explained that the Board has been provided with information on the properties appealing their value. Sinell reminded the Board that they have 20 days in which to complete their business. II. ORDER OF BUSINESS A. Hear Personal Appeals Appeal No. 2 —John Smalkoski, 9900 Tree Farm Road Smalkoski said since the City has chosen not to pursue the Metropolitan Airport Commission's actions to allow larger jets in and out of Flying Cloud Airport the amount of air traffic noise affecting his property will double. Also, Smalkoski said his house increased $40,000 in value, a 15 percent increase. With the proposed increase in air traffic, there is no way the value of his home should increase that much. Pidcock said they do look at other homes in the neighborhood. Smalkoski showed that his house is almost directly under the airport's flight path. The other two equivalents were further away. The house furthest away had the highest value. BOARD OF APPEAL AND EQUALIZATION April 24, 2003 Page 2 O'Connor said she was not aware that the airport was definitely going to increase the size of the runway. Smalkoski said the process has started and construction will start this year. Sinell pointed out that the work being done is for utilities which includes sewer and water for the airport. Smalkoski said it is a matter of record that MAC is extending the runway. Sinell said the City did reach some understanding with MAC but were not exactly sure when the changes would occur. He said he did not think there was any funding to expand the airport at this time. Sinell explained that airports do affect property values as does highways and parks. What they try to do is measure if there is a difference. The comparable used for this case included a 1,080 square foot home to the north about one-half block off Pioneer Trail. The three homes used were in the same neighborhood and did not appear to be affected by the change in the airport. The airport has been there since 1978 and the purchase prices did not appear to be affected. City staff has not seen property values going down and a potential change to the airport does not appear to have affected those values. Malam explained that part of this Board's charge is to establish values as of January 2, 2003. Going forward, this airport change may happen some time in the near future. By State Statute, they cannot assume something might happen. If larger planes start flying over the petitioner's house he may have a better chance of lowering his property value next year. O'Connor said she has sold real estate west of the airport for four years. During this timeframe they have disclosed what is happening with the airport and there have not been more than five people who did not purchase because of the airport. O'Connor said she feels the proposed improvements to the airport have not yet affected property values. Pidcock said that as of January 1, 2003, there are no negatives affecting the value of this property. MOTION: Motion was made by Malam, seconded by Ilstrup, in Appeal No 2 to accept the review appraisal of$319,000 for the property located at 9900 Tree Farm Road, and sustain the estimated market value of$310,100. The motion carried 4-0. Appeal No. 3 —Bruce LaCoe, 9876 Windsor Terrace LaCoe explained that he had an appraisal of his house done for refinancing and the estimated market value was $379,000. He further explained that last year's valuation increased by an inflation factor developed by the Assessor and applied to his house as it is on others. LaCoe said he is a financial professional and understands the process of making original and inflationary assessments. He asked City staff for the details used in developing the estimates to guarantee that the detail will tie out to the original estimate. LaCoe said he believes the estimate of$379,000 should be the market value used. Sinell explained that in reviewing the appraisal done for this property, it is stated that the function of that appraisal is for mortgage purposes only. The City's appraisal is done for tax purposes. The City's appraisal was done in January while the appraisal done for Mr. LaCoe was done in October. The City used the most recent sale information in the neighborhood. When the October appraisal was completed, this information was not available. Pidcock said she was surprised that the private appraisal would include comparables located so far from the subject BOARD OF APPEAL AND EQUALIZATION April 24, 2003 Page 3 property. LaCoe pointed out that the person he used for his appraisal is a professional used to buy and sell homes. O'Connor explained that when a realtor goes out to do a market analysis, they will not use old properties that have sold a year ago. Pidcock pointed out that the bank states that no properties should be used as a comparison if they are located more than a mile away from the property. LaCoe said the properties used were within that boundary. Sinell said this is a difference of opinion. When the private appraisal was done the information that is available now probably was not available then. LaCoe said they are looking at a ten-percent difference or $40,000. The person doing his appraisal does this for a living and he does it every day. O'Connor pointed out when an appraiser goes out to do an appraisal for refinancing all they have to do is justify the value of the mortgage. O'Connor asked LaCoe if he would use this appraisal if he were to sell his house. LaCoe said this information will be looked at when someone buys the house. However, he is not out there selling his house right now. If a buyer saw the appraisal for$379,000 they certainly would not pay $417,000. Sinell said that Schmidt did a superior job with the appraisal working with the information that is available now. LaCoe asked what has changed since the October appraisal. O'Connor pointed out that values do go up in Eden Prairie. LaCoe pointed out that the winter is the worst time to try and sell a house. Pidcock said there are fewer people looking for homes at that time of year. O'Connor suggested that they continue this item to give Board members an opportunity to view the comparables used for this property. MOTION: Motion was made by O'Connor, seconded by Malam, in Appeal No. 3 to continue consideration of this item to the May 13, 2003, meeting. The motion carried 4-0. Appeal#8 —Bruce Russo, 17171 Padons Drive Russo explained that he had an appraisal done for refinancing in late December and the estimated market value of that appraisal was $435,000. The City's estimated market value came in at$458,400. This evening he was given an update of that value to $460,000. Russo said he was of the understanding that the value was to have been from January 2. Russo further explained that his house was the first one built in the cul de sac two years ago. The house constructed to the west of his was turned 90 degrees from the cul de sac from what was expected. When construction was started Russo said he went to the City and was told that as long as the house is built within the setbacks there is not much they can do about it. The placement of this house allows the two-story structure to overlook his house. Russo said his house also has a very unusual floor plan in that the master bedroom suite is located in the basement of the rambler style house. There is no master suite on the main floor. Russo pointed out that there is a conservation easement in the entire development. What is unusual about his lot is that the conservation easement comes up 100 feet from the lake. Russo said if he wanted to add a pool or something similar he would not be able to do it in the back yard. Malam pointed out that the homeowner was aware of this at the time he built. Russo said that is correct and he is not bringing up the easement as an issue but it may be an issue for someone who may be looking at purchasing his property. BOARD OF APPEAL AND EQUALIZATION April 24, 2003 Page 4 Sinell explained that in reviewing this property it appeared that the only way to see the neighboring house would be from the porch. Everyone on that cul de sac attempted to maximize their view of the lake. Sinell said staff does agree with Mr. Russo in that this is an unusual floor plan and they did make a ten-percent adjustment on the comparables. This property is on a lake and it has a very nice lot. On lakeshore property there are usually some eclectic ways the houses are put on the lots to take advantage of the lake. Sinell said their appraisal did make an adjustment for the non-typical floor plan and non-typical layout of the neighboring property and they felt this adjustment offset those issues. The comparables included one lake home and one non-lakeshore property. Sinell said he feels the private appraisal missed the point of the lake. Russo said Duck Lake is not a real lake but more of a pond. O'Connor asked Russo if he purchased this lot because of the lakeshore. Russo responded that this is one of a few lots in Eden Prairie that face south. O'Connor said she feels the big question is whether or not this Board feels ten percent for the non-typical floor plan is enough of an adjustment. Russo said the important issue is that of the neighboring house and how it negatively impacts the value of his house. Pidcock said that might be true for Russo but the next owner may not be negatively impacted. Russo asked how that is decided. O'Connor said that the master in the lower level is a negative,however,being on a lake is not a negative. Sinell pointed out that the ten-percent adjustment is more than it would cost to fix the layout of the home. He explained that the private appraisal was for$425,000 while the City's was at$460,000. O'Connor said she would be more comfortable with an estimated market value of somewhere between $425,000 and $458,000. Motion: O'Connor moved in Appeal No. 8 to adjust the market value of the property located at 17171 Padons Drive to $435,000. For lack of a second, the motion failed. Motion Malam moved, Ilstrup seconded, in Appeal No. 8 to adjust the market value of the property located at 17171 Padons Drive to $445,000. The motion carried, 4-0. Appeal No. 9 —Realife Valley View Cooperative, 10785 Valley View Rd. Bob Hanson, Treasurer for Realife Valley View Cooperative, explained that the co-op has a membership of 135 people that are over 55 years of age. They do not own the unit; they are members of the co-op. There are 94 units in the building and it is a non-profit corporation. Hanson pointed out that a unique feature of this co-op is that there is a limitation on the membership values. They are only allowed to increase the value of these units by one percent per year. This is a serious restriction and would require an 80 percent vote to change this requirement. That is highly unlikely to happen. Hanson said he is requesting that the Board consider limiting the value of this property to $9.2 million for the 2004 assessment. Sinell said staff feels the members own the apartment building by the terms of the agreement. The decision to limit their increase is determined through the Association's bylaws. Sinell pointed out that by taking the income approach to valuation and adding the members' equity the BOARD OF APPEAL AND EQUALIZATION April 24, 2003 Page 5 $10.2 million value can be supported. They may limit increases to the individual units but have not limited increases to the property as a whole. Malam said he understands what the petitioner is saying and he understands that he feels like his hands are tied,however, this Board's hands are also tied. Limiting the increase to one percent has nothing to do with the established value. It has to do with the way the co-op set up their bylaws and has nothing to do with selling this property. Hanson said he does not believe they could get 80 percent of the people to sell. Motion: Motion was made by Malam, seconded by Ilstrup, in Appeal No 9, to sustain the current estimated market value of$10,201,700 for the property located at 10785 Valley View Road. The motion carried 4-0. Appeal No. 13 —Steve Guyette, 6529 Rowland Road Guyette explained that property adjoining his was developed without the City submitting the plat to the Watershed District to determine if the lot was developable nor did they hold the developer to the developer's agreement. These issues still affect the value of his property. Guyette said adjustments were made to the value of his property last year. Guyette reviewed with the Board the valuation history of this property. The property next door was purchased in 1992 for $425,000 and the value of that house for this year is $467,000. It is a house very similar to his. Guyette said he feels his property was never evaluated under the requirements of State Statute 273.11. He asked that the Board consider re-evaluating this piece of property based on the changes that have taken place in the last year. Pidcock asked Guyette what he felt the value of his property should be. He responded that he is not a real estate professional and he has no idea but does feel it should not be valued at$469,000. Malam said last year staff did go back to take another look at this property and did drop the value. This year the increase is about half of what they have seen in appreciation in Eden Prairie. Malam said he feels the petitioner is getting a good deal. He continually brings up something that occurred ten years ago and they cannot go back and fix that. Motion: Motion was made by Malam, seconded by O'Connor in Appeal No. 13 to sustain the current estimated market value of$469,700 for the property located at 6529 Rowland Road. The motion carried 4-0. Appeal No. 17 —Richard D. Peppin, 10188 Meade Lane Peppin asked that his request be tabled until the Board's next meeting. His home on Meade Lane was purchased in June of last year and since that time he has experienced several problems. The property backs up to Purgatory Creek and this influenced him to purchase the property. Peppin explained that with all of the rain last spring and because the property is built on light sand they experienced some major soil erosion. This resulted in their losing some very old trees and because of the erosion the foundation of the home needed to be stabilized. Additional work will BOARD OF APPEAL AND EQUALIZATION April 24, 2003 Page 6 need to be done this spring. Peppin said he is not sure what the cost will be or how much time it will take to get the property back to its original condition. Peppin said he would like additional time to assess the situation. Sinell said staff would also like time to work with the petitioner to see if they can agree on a value. Motion: Motion was made by Ilstrup, seconded by Malam, in Appeal No. 17 to continue consideration of this item to the May 13, 2003, meeting. The motion carried 4-0. B. Review written appeals. Appeal No. 4 —Philip Bly and Brenda Urke, 10720 Hennepin Town Road Malam asked if this lot is buildable. Sinell responded that it is not in its current condition. Sinell said that the market shows that people will pay for unusable property to enjoy for the natural beauty. People will buy adjacent properties for their private recreational use. A comparable piece of land sold on January 2001, for$40,000. Motion: Motion Malam, second Ilstrup, in Appeal No. 4 to sustain the current estimated market value of$29,900 for the property located at 10720 Hennepin Town Rd. The motion carried 4-0. Appeal No. 6 —Ed Ted Properties, A Minnesota Real Estate Partnership Harlan Jacobs, General Partner— 6466 City West Parkway Sinell explained that this is an office condo and City staff would like additional time to inspect and appraise this piece of property. Motion: Motion O'Connor, second Ilstrup, in Appeal No. 6 to continue consideration of this item to the May 13, 2003, meeting. The motion carried, 4-0. Appeal No. 11 —Paul Gallenberger, 8182 Pristine Pine Trail Sinell reported that City staff would like to have this item continued to allow them to continue with the appraisal process. Motion: Motion Ilstrup, second O'Connor, in Appeal No. 11 to continue consideration of this item to the May 13, 2003, meeting. The motion carried, 4-0. Appeal No. 12 —Carl R. Adams —9475 Olympia Drive Motion: Motion O'Connor, second Malam, in Appeal No. 12 to continue consideration of this item to the May 13, 2003, meeting. The motion carried, 4-0. BOARD OF APPEAL AND EQUALIZATION April 24, 2003 Page 7 Appeal No. 14 —Esther Findley, Treasurer Tim Nichols, Nichols Financial Services Co. - 7610 Smetana Lane Sinell explained that this is a new cooperative and staff is still seeking financial information from them. He asked that this item be continued. Motion: Motion O'Connor, second Ilstrup, in Appeal No. 14 to continue consideration of this item to the May 13, 2003, meeting. The motion carried, 4-0. Appeal No. 16 —James Kaufman, 7356 Ontario Blvd. Motion: Motion Ilstrup, second O'Connor, in Appeal No. 16 to continue consideration of this item to the May 13, 2003, meeting. The motion carried, 4-0. C. Hear Other Appeals (Those not on the original Board of Appeal and Equalization Review List.) None were received. D. Schedule Next Meeting Motion: Motion was made by Ilstrup, seconded by O'Connor, to continue the April 24, 2003, Board of Appeal and Equalization meeting to Tuesday, May 13, 2003, at 7:00 p.m. The motion carried, 4-0. E. Close the Board of Appeal and Equalization meeting to additional appeals. MOTION: Motion was made by Malam, seconded by O'Connor, to close the Board of Appeal and Equalization meeting to additional appeals. The motion carried 4-0. III.CLOSE THE BOARD OF APPEAL AND EQUALIZATION MEETING MOTION: Motion was made by Malam, seconded by O'Connor, to continue this meeting to May 13, 2003, at 7:00 p.m. The motion carried 4-0 and the meeting was continued at 8:55 p.m.