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HomeMy WebLinkAboutBoard of Appeals and Equalization - 05/13/2003 UNAPPROVED MINUTES EDEN PRAIRIE BOARD OF APPEAL AND EQUALIZATION THURSDAY, MAY 13, 2003 7:00 P.M. City Center Council Chambers BOARD MEMBERS PRESENT: Patricia Pidcock, Chair; Mike Best, Judy Ilstrup, Doug Malam and Annette O'Connor CITY STAFF PRESENT: Steve Sinell, City Assessor Carol Pelzel, Recording Secretary I. CALL MEETING TO ORDER The meeting was called to order by Chair Pidcock at 7:00 p.m. II. ORDER OF BUSINESS A. Approve minutes from April 24, 2003, Board of Appeal and Equalization Meeting Motion: Malam moved, O'Connor seconded, to approve the April 24, 2003, minutes as presented. The motion carried, 4-0-1 with Best abstaining because of absence from that meeting. B. Review items continued from April 24, 2003 Appeal No. 3 —Bruce LaCoe, 9876 Windsor Terrace LaCoe explained that the appraised value never equals the assessed value nor does the assessed value equal the appraised value. Some use the conservative approach while others are aggressive. LaCoe said he believes that is what they have with his value. There is a $40,000 difference and he feels the value of his home should be somewhere in between that amount. LaCoe said he reviewed the comparables that were presented by the City Assessor. Comparable No. 3 is 2.5 miles away from his house. A comment was made at the last meeting that comparables should be within one mile of the property. Comparable No. 2 is 1.35 miles away from his house and there is a park across the street. This park would increase the value of that property. LaCoe pointed out that Comparable No. 1 had a$3,000 adjustment because there was no patio. LaCoe indicated that his house has a concrete slab under the deck and they have to walk downstairs through an unfinished basement to enjoy the patio. He stated that he did not feel his patio was worth $3,000. LaCoe said he paid $500 to have the cement slab added and the City Assessor is now valuing it at$3,000. LaCoe explained that there are several inconsistencies with the comparables. Comparable one was listed for$469,900 and in four days the value was reduced to $455,000. This results in a $15,000 discrepancy. Comparable No. 2 appears to have $15,000 to $20,000 of additional value that was not recognized. LaCoe said he feels the market value of his home is somewhere in between the $40,000 difference. BOARD OF APPEAL AND EQUALIZATION May 13, 2003 Page 2 Sinell explained that they normally do not use the set value of a listing because the house has not sold. The additional information was provided for the Board to show that the house is worth something in the $400,000 range and not the $300,000 range. Sinell said some of the differences are subjective and one of those would be landscaping. Malam said he feels that Mr. LaCoe assumes that appraisals tend to be on the conservative side, which is not true. Clients are going to lenders stating that they need the house to be appraised at a particular value. Malam explained that 99 percent of the appraisers try to be as accurate as they can. It is not an exact science. Pidcock explained that this Board has to determine what they think is the value of the property on January 1, 2003. Sinell pointed out that this is a small neighborhood and there is not going to be three sales each year. The home that did sell in this neighborhood indicated a lower value. Sinell said the Board could reduce the value to that lower number and that would not be unreasonable. An adjustment of$1,000 could be made for the patio. Pidcock said in her real estate career she has seen homes sell for less than their appraised value and others right on the appraised value. Best indicated that he had driven by this property. He stated that if he were to place this property on the market he would value it closer to $405,000. It is difficult to find a house like this in Eden Prairie for anything less than $400,000. The property is nice, not cluttered but is rather plain. Motion: Best moved, O'Connor seconded, in Appeal No. 3 to adjust the market value of the property located at 9876 Windsor Terrace to $405,000. The motion carried, 5-0. Appeal No. 6 —EdTed Properties, 6466 City West Parkway Harlan Jacobs, General Partner of EdTed Properties, explained that this property was purchased in 1987 as rental income. Jacobs said he disagrees with the approach that was used in valuing this property. This is an investment property and is not owner occupied. The value from the income approach should be used. Jacobs stated that he finds it unreasonable that this rental property be placed in a separate category. He indicated that being valued like owner occupants should not penalize him. He pointed out that in the last couple of years they have lost money and he is asking that this property be valued more closely to the capitalized value of$177,200. He was originally told that the property was worth $230,000 and now the appraised value is at $250,000. Jacobs said he is respectfully requesting that this property be treated as income property and that it not be valued as if it were owner occupied. O'Connor said she is not familiar with these types of properties and asked what the difference is between owner occupied and not owner occupied properties in terms of value. Jacobs responded that most people rent space and the people who want to be in control of the property own it. This particular office condominium is largely occupied by owner occupants. They do pay a $250 monthly fee to United Properties to manage the facility which includes grass and snow removal. BOARD OF APPEAL AND EQUALIZATION May 13, 2003 Page 3 O'Connor said it was not this Board's fault that Jacobs office is not owner occupied. Jacobs pointed out that owner occupied properties set the rules for all properties. Income property should be valued on an income basis. Sinell explained that this property is a 2,054 square foot office condo in a multi unit building. State law states that the City Assessor has to consider all factors in determining market value. The City did consider market approach and income approach. They did not consider a cost approach because the property is 20 years old. Sinell indicated that on this particular property they found that the actual income approach and the market approach did not have the same number. There are a number of properties that are income producing but are not competing with owner occupants. The sales comparison approach indicates a value range of$222,800 to $294,800. Based on the owner's actual income and expenses, the income approach indicates a market value of$177,200. This approach is not how office condominiums and townhouses are currently being purchased. Current sales in Eden Prairie indicate that the market value of office condominiums and townhouses is not based on the rental income the property may generate but is based on the benefits an owner occupant enjoys. Sinell explained that State law states that they cannot adopt a different value standard. Staff feels the $230,000 value is appropriate. Malam stated that this is a segmented market but there are buyers out there. For example, a house that is rental property is not valued any less than a house that is owner occupied. Ilstrup said she feels the value is within a reasonable range. Best said he feels that owner occupied versus non-owner occupied property value is not different on one versus the other. The State maintains that you have to look at the highest and best use of the property and they need to look at all of the information available. This Board's function is to determine if the estimated market value is reasonable. Motion: Best moved, seconded by Ilstrup, in Appeal No. 6, to sustain the current estimated market value of$230,000 for the property located at 6466 City West Parkway. The motion carried, 5-0. Appeal No. 11 —Paul Gallenberger, 8182 Pristine Pine Trail Sinell explained that the review for this property was included in the agenda material. Staff supports the January 2, 2003, value to be $498,000. Motion: Malam moved, Ilstrup seconded, in Appeal No. 11 to sustain the estimated market value of$498,000 for the property located at 8182 Pristine Pine Trail. The motion carried, 5-0. Appeal No. 12 —Carl R. Adams, 9475 Olympia Drive Sinell reported that the City Appraiser, John Sams, and the homeowner both agreed that the estimated market value should be reduced to $625,000. This is an unusual house. It is very large on the first floor with a very small second floor. O'Connor asked if the value was reduced BOARD OF APPEAL AND EQUALIZATION May 13, 2003 Page 4 because of the unusual style of home. Sinell responded that it is one of the things they look for in mass appraisals. Motion: Best moved, Malam seconded, in Appeal No. 12 to reduce the estimated market value to $625,000 for the property located at 9475 Olympia Drive. The motion carried, 5-0. Appeal No. 14 —Esther Findley, Nichols Financial Services Co., 7610 Smetana Lane Sinell reported that after receiving additional income information, staff agreed to reduce the estimated market value to $9,336,000. Motion: Malam moved, Best seconded, in Appeal No. 14 to reduce the estimated market value to $9,336,000 for the property located at 7610 Smetana Lane. The motion carried, 5-0. Appeal No. 16 —James Kaufman, 7356 Ontario Blvd. Sinell explained that this property has deferred maintenance for which an adjustment of$10,000 was made. An issue with this appraisal is that this property backs up to and has a view of Edenvale conservation area. A $20,000 adjustment was made for that. Best questioned the value of this property. Sinell responded that it has a premium lot,however, there is no landscaping. Sinell reviewed with the Board the comparables for this property. Malam pointed out that the premium lot price would be offset by the deferred maintenance. Motion: Best moved, seconded by Malam, in Appeal No. 16 to reduce the estimated market value to $285,000 for the property located at 7356 Ontario Blvd. The motion carried, 5-0. Appeal No. 17 —Richard D. Peppin, 10188 Meade Lane Sinell reported that this property is located on Purgatory Creek and the back yard was lost to flooding. The yard has been restored but will never be back to its original state. Malam pointed out that there has been extensive drain tiling added to the back yard. Best said this house appeared to be the smallest house in the neighborhood. When looking at the back yard it is very obvious that there are some major problems. Sinell stated that staff is making a$140,000 adjustment. The property cannot be restored back to what the owner had originally paid for it. Motion: Best moved, O'Connor seconded, in Appeal No. 17 to reduce the estimated market value to $485,000 for the property located at 10188 Meade Lane. The motion carried, 5-0. III. ADJOURN THE 2003 BOARD OF APPEAL AND EQUALIZATION MEETING MOTION: Motion was made by Malam, seconded by Ilstrup, to adjourn the 2003 Board of Appeal and Equalization meeting. The motion carried, 5-0. The meeting adjourned at 8:30 p.m.