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HomeMy WebLinkAboutBoard of Appeals and Equalization - 04/24/2001 CITY OF EDEN PRAIRIE BOARD OF REVIEW UNAPPROVED MINUTES TUESDAY,APRIL 24, 2001 7:00 P.M. CITY CENTER 8080 MITCHELL ROAD COUNCIL CHAMBERS BOARD OF REVIEW MEMBERS: Patricia Pidcock—Chair, Mike Best—Vice Chair, Judy llstrup, Doug Malam, and Annette O'Connor BOARD OF REVIEW STAFF: City Assessor Steve Sinell, Appraiser II John Sams, Appraiser II Barb Cook, and Recording Secretary Barbara Anderson I. ROLL CALL/CALL MEETING TO ORDER Chair Pidcock called the meeting to order at 7:00 p.m. All members were present. II. ORDER OF BUISNESS A. Approve minutes from April 5, 2001 Board of Review Meeting. Sinell noted that on page 3, the last paragraph, the text should read County Attorney, not City Attorney. MOTION: Best moved, seconded by Malam, to approve the Minutes of the April 5, 2001 Board of Review Meeting as corrected. Motion carried 5-0. B. Review items continued from April 5, 2001. (6) Realife Valley View Cooperative of Eden Prairie 1/2001 EMV$10,395,800 Richard Brown spoke on behalf of the cooperative, and noted that Mr. Sinell had delivered the staff report in the rain, which was greatly appreciated. He noted the real estate is owned by the people who are members of the cooperative. They agree they do not qualify for the limited cooperative but they agree with the City that the income approach would be the fairest way to approach the assessment. Bob Hanson asked that they give the board information regarding expenses from the first year, and he reviewed the information on the income and the operating expenses. With a cap rate of .081 they get a market value of$7,333,100 which is less than what the City has given them. The felt they should pay taxes based on income but the valuation should be adjusted to give them a fairer market valuation which would lower their tax burden. They requested that they receive a lower valuation which would reflect a fairer way of taxing a unique property. Sinell reviewed the staff report and noted that there is a rent factor as well as an equity part which does not reflect the actual value of the property. He discussed the variables they considered and concluded that the price per square foot for Eden Prairie apartments BOARD OF REVIEW MINUTES April 24, 2001 Page 2 is generally much higher than what is claimed and paid to Realife because of the equity paid for by the owners or tenants. Hanson noted the assessor has chosen to use a figure used for community rental properties and this is not such a property. They are not free to sell their equity, and all they can do is have the benefit of living in the space. They have a variety of housing options they can offer people because of the diversity of unit types. This property is not subsidized by HUD and it is not a general apartment building. Discussion ensued regarding this type of housing and how it was viewed on a legal basis. The various ways of valuing this type of property were discussed. Pidcock stated it was the job of the Board to determine the value of this property as if it were on the market today. Malam stated their income approach was subsidizing the lower income people who live in this development. He did not feel that the figure of$826,000 was a valid figure. Discussion ensued regarding various types of apartment and condominiums which could be compared as they were similar to this property. Various properties in adjacent communities were discussed. Sinell stated staff would agree to a valuation of $10,000,000. Brown noted that if it were not for shares purchased, this type of building could not be built as it would be cost prohibitive. If the Board wants to sell the building their by-laws require that 80% of the shareholders agree, which would not happen. This was developed to provide affordable housing for low to middle income senior citizens. The figures are too high as this building cannot be compared to a commercial property. If they have to pay the taxes as assessed they will face a substantial increase in fees, which they cannot afford. O'Connor commented that if they are placing a commercial valuation on a property which cannot be sold, they have a problem. Sinell commented if this is true, then it must be valued using the cost approach. That would be more than the income approach. The City wants a mix of housing types to provide choices for people who want to live in Eden Prairie. There are apartment buildings that have entered into 40 year mortgages to provide low and moderate income housing. He discussed the process of property valuation and how the City arrived at the specific valuation on this property. Best noted he could not justify the figure of$8.5 million for this building. Malam concurred, as did Ilstrup. O'Connor commented she agreed, and would prefer to see something less,but their hands were tied. MOTION: Best moved, seconded by Malam, to reduce the appraisal to $10,000,000 from the $10,395,800 valuation. Motion carried 5-0. (10) Philip Schmidt, 7256 Gerhard Drive 1/2001 EMV$186,100 Philip and Cherilyn Schmidt were present and asked that the value of their property be lowered as they believed it was too high given the fact that it was an older neighborhood and they have a lot of noise from I-494. There is a house that is in the vicinity (#8) which BOARD OF REVIEW MINUTES April 24, 2001 Page 3 was almost a copy of their home and while his has not been inside that home,he felt that since the Board reduced that valuation,his should be reduced as well. Pidcock asked why they purchased that house and Schmidt responded they had been living in an apartment and this was their first house. They plan to install shutters to see if that will abate the noise. Sams stated they took three sales which were in the same neighborhood in close proximity to the Schmidt home, and staff felt the analysis of$188,000 was correct. MOTION: Malam moved, seconded by O'Connor to accept the staff offer of a valuation of$170,000 for the property at 7256 Gerard Drive. Motion carried 5-0. (13) Curtis Fischer, 8863 Hidden Oaks Drive 1/2001 EMV$353,600 Curtis Fischer reviewed the history of his tax valuation and noted that every year his taxes have increased. They can view the lake only in the winter when there are no leaves on the trees, and there is a fence between his property and the park and they have to go around like everyone else. Their house is a three bedroom home, with small bedrooms. They have a large master bedroom and basement. He reviewed the sales history of the house, noting the home was constructed in the 70s and the rooms are fairly dark because the windows open out towards the back of the house. They do not believe anyone would pay $400,000 for their house but they would be willing to move farther south and buy something which was more modern and had more light. He believed a valuation of $311,000 was more appropriate. Sinell commented the house has a better lot,privacy and more amenities. Discussion ensued regarding the valuation of the Fischer home versus a neighbor's house. Sinell stated the house at 8917 Hidden Oaks Drive sold for$348,000 and was valued at $311,000 and he felt that Mr. Fischer was confused about this. A negative adjustment was made for$20,000 and the assessor still believes this house would sell for$400,000. Discussion ensued regarding an appropriate valuation for the subject property. MOTION: Malam moved, seconded by O'Connor, to retain the staff valuation of $353,600. Motion carried 5-0. (5) Gary Johnson, 10106 Juniper Lane 1/2001 EMV $285,900 Sinell noted that Mr. Johnson had called and agreed with the valuation of$285,900. MOTION: llstrup moved, seconded by Best, to retain the staff valuation of$285,900. Motion carried 5-0. BOARD OF REVIEW MINUTES April 24, 2001 Page 4 (11) Kevin Witthuhn,8902 Pine Bluff Court 1/2001 EMV$226,100 MOTION: Malam moved, seconded by Best, to support the staff valuation of$226,100. Motion carried 5-0. (12) Edenvale Family Housing, 7489 Mitchell Road 1/2001 EMV 2 866 000 Sinell reviewed the staff report and noted that Minnesota Statutes require they should use market rates in their property valuations for properties of this type. MOTION: Malam moved, seconded by Best, to sustain the staff valuation of $2,866,000. Motion carried 5-0. (14) Ronald VanAsten, 8233 Hillside Drive 1/2001 EMV$150,900 MOTION: O'Connor moved, seconded by llstrup, to reduce the valuation to $135,000 per staff agreement. Motion carried 5-0. (15) John & Harriet Peterson, 7828 Bailey Drive 1/2001 EMV$504,700 Sinell noted that the owner agreed to reduce the valuation to $490,000. MOTION: Best moved, seconded by O'Connor, to reduce the valuation to $490,000 per agreement between the owner and the City. Motion carried 5-0. (16) Robert & Melinda Liska, 11232 Mount Curve Road 1/2001 EMV 380 200 MOTION: O'Connor moved, seconded by Best, to agree on a valuation of$380,000 and change the property to a homestead status. Motion carried 5-0. C. Sign Board of Review Documents. The Board of Review signed the documents presented by Assessor Cook. III. Adjourn the 2001 Board of Review Meeting. MOTION: Malam moved, seconded by Best to adjourn the meeting of the 2001 Board of Review. Motion carried 5-0. The Board of Review was adjourned at 8:40 p.m.