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HomeMy WebLinkAboutBoard of Appeals and Equalization - 04/24/2014 APPROVED MINUTES EDEN PRAIRIE BOARD OF APPEAL AND EQUALIZATION THURSDAY,APRIL 24, 2014 7:00 P.M., CITY CENTER Council Chambers 8080 Mitchell Road BOARD MEMBERS PRESENT: Patricia Pidcock, Chair; Lyndon Moquist, Vice-Chair; Jim Johnson, Annette O'Connor, and Todd Walker BOARD MEMBERS ABSENT: None CITY STAFF PRESENT: City Assessor Steve Sinell; Staff Appraisers: Jody Carlson, Dave Buswell, Jessica Pike, John Sams and Colin Schmidt; Assessing Technician Lisa Ramsey and Recording Secretary Jan Curielli I. CALL MEETING TO ORDER The meeting was called to order by Chair Pidcock at 7:03 p.m. Pidcock asked the Board members to introduce themselves. II. PROCEDURAL INFORMATION BY STEVE SINELL City Assessor Sinell introduced the staff members present. He presented an overview of the process explaining the Board of Appeal is a process required by State Statute. Any appeals not completed this evening will be completed twenty days later. The decision of the Board can be appealed to the County Board of Equalization. III. ORDER OF BUSINESS A. REVIEW APPEALS #1 thru#12 AS LISTED ON THE APRIL 24, 2014 BOAE LIST AND STATUS OF APPEALS Appeal#1 —Richard & Jane Norell, 16184 Terracewood Dr. Mr. Norell stated concerns about the 15% increase in the assessment for his home. When he purchased the home in 1988, there were construction problems that required $82,000 of repairs that year. Subsequently there were additional repairs of$11,000 required when the house was found to have a crumbling of the foundation wall and to need other repairs in the basement. While he believes his home is in good condition now,he was concerned the "stigma" associated with the construction problems would affect the sale of his home. He agreed with the assessor on a 15% "stigma" factor for his home. He said the January 2014 assessed value of his home was $379,800, and he thought the assessed value should be $329,000. He noted he would be comfortable BOARD OF APPEAL AND EQUALIZATION MINUTES April 24, 2014 Page 2 with a value of$340,000. He explained the comparable properties he submitted with his application and compared those to the ones provided by the Assessing staff. Norell stated the 15% increase in his assessed value seemed large, and he did not think the market is up to that degree. He said the larger dispute is whether the home would sell for$440,000. Sinell said the review appraisal of this property came in at$440,000. After review and applying the 15% "stigma" factor, the estimated market value (EMV) of the property was set at$379,800. He noted the 15% factor is almost the same as the cost to fix the home. Sams reviewed the comparable sales, all of which were properties with two-car garages. Moquist stated the 15% "stigma" factor is very generous, considering the amount of time that has passed since the repairs were done to the home. In response to a question from Moquist, Sinell said the overall market in the City varies by neighborhood. The average change was 5.0%, but the range was 0-20%. In response to a question from Johnson, Sams said comparables 3 and 6 are in the vicinity of Mr. Norell's property. In response to a question from Moquist, Sinell replied the comparable located on Grandview put forth by Mr. Norell is located north and west of the Norell property. Norell stated when he tried to sell his home 20 years ago several factors were perceived to detract from the home's value: the two-car garage, no backyard and no master bath suite. O'Connor stated $379,800 is a more realistic value than $400,000. Walker stated $379,800 is a very modest appraisal in today's market, and he thought the property would probably sell in the low $400,000 range. He said he wouldn't be overly concerned about the impact of repairs done in 1988 on a sale of the property in today's market. Moquist and Pidcock agreed $370,000 seemed to be a reasonable figure. MOTION: Motion by Moquist, seconded by O'Connor, in Appeal No. 1 to reduce the estimated market value to $370,000. Motion carried 5-0. Sinell suggested the Board consider Appeal#5 next because that taxpayer was present. Appeal#5 —Chunxiang Li, 17909 Haralson Dr.. Ms Li distributed additional information about her property to the Board members. She stated her property was purchased in December of 2009. In the last few months dry wall and carpet were added to the basement at a cost of$8,000. She applied for a permit from the City in September 2013;however, the improvements to the basement BOARD OF APPEAL AND EQUALIZATION MINUTES April 24, 2014 Page 3 were not completed until March 18. She did not believe the basement improvements should be included in the assessed valuation because they were completed after January 2, 2014. Moquist asked what condition the basement was in before the improvements were made. Ms Li said they added drywall on the ceiling and walls and installed carpet. There is a bathroom in the basement,but that was included in the previous value. She said they spent$8,000 on the improvements,but those improvements are valued on the appraisal at$26,000. She stated the improvements made were not luxury improvements, and the bathroom was already finished. She thought it was not reasonable to assess the improvements at 300% of their cost. Ms Li reviewed a list of comparables she researched on edinarealty.com. The comparables are located in her neighborhood and were sold during 2012 and 2013. She said only one of the 11 comparables she found has three bedrooms on the upper level on a similar lot; the rest have four bedrooms. She stated that the number of bedrooms is a key component of the home's value. She believed an adjustment of $5,500 to compensate for the lack of a fourth bedroom was too low. She said it should be around $30,000. Ms Li stated her estimate of the value would be $343,267, which would include an adjustment of$32,833 for the lack of a fourth bedroom on the upper level and would not include the improvements to the basement. Sinell stated the mass appraisal data shows that homes with either three or four bedrooms on the upper level sell for about the same price. The data shows a price difference between two and three bedrooms, but not much of a difference for three versus four bedrooms. He said they can't start making adjustments for three versus four bedrooms as that would lead to undervaluing every three bedroom house in Eden Prairie. Sams noted the upper levels of the comparables are generally the same square footage whether they have three or four bedrooms. In response to a question from Pidcock regarding the basement not being finished by January 2014, Sinell said they have to value the improvements whether completed or not. The appraiser was there on November 4, 2013, and the drywall truck was in the driveway. O'Connor stated three or four bedrooms in homes below $500,000 isn't much of an issue. Johnson stated three and four bedroom homes almost always come in at different prices. He thought it is a real issue that affects the sale ability of the home. Sinell said he would prefer to have time to look over the information provided by Ms Li tonight so he would like to continue this item. Our appraisal deals with what has sold in the neighborhood, and our comparables suggest an EMV of$402,600 while Ms Li suggests $357,000. BOARD OF APPEAL AND EQUALIZATION MINUTES April 24, 2014 Page 4 Moquist commented Ms Li's comparables seem similar in floor plan. Ms Li said the finished basement has the same assessed value whether it is a luxury finish or not,but quality is very important when a house is sold. Sinell responded the market sees it as a finished basement. Ms Li said it was not reasonable to assume the basement was finished by January 2014 just because the drywall truck was noted in the driveway in November 2013. She stated it was also not fair to compare her home with other homes that have four bedrooms on the upper level. MOTION: Motion by Johnson, seconded by Moquist, in Appeal No. 5 to continue this item to the May 13 meeting. Motion carried 5-0. In response to a question from Walker, Ms Li said the fourth bedroom in the basement was there before the recent improvements were made. Appeal#2— Shravan Pargal, 16997 New Market Dr. Sinell explained this property has been before the Board before, and the comparables support the assessment. It is a big house on a big lot. MOTION: Motion by Walker, seconded by Moquist, in Appeal No. 2 to affirm an estimated market value of$426,900. Motion carried 5-0. Appeal#3 —Dipak J Shah, 7993 Lismore Circle MOTION: Motion by Moquist, seconded by Walker, in Appeal No. 3 to affirm the original estimated market value of$344,500. Motion carried 5-0. Appeal#4 —Appeal cancelled baxpayer, 4/22/2014 Appeal#6—John & Jane Thielen, 17974 Evener Way Sinell explained this property sold a year ago. MOTION: Motion by O'Connor, seconded by Moquist, in Appeal No. 6 to affirm the original estimated market value of$130,000. Motion carried 5-0. Appeal#7 —I1-12 Property Illinois LP Sinell explained this property is rental and the owner needs to coordinate inspection with the tenant. The assessor recommends the Board continue this appeal to allow time to schedule an inspection. BOARD OF APPEAL AND EQUALIZATION MINUTES April 24, 2014 Page 5 MOTION: Motion by O'Connor, seconded by Moquist, in Appeal No. 7 to continue this item to the May 13 meeting. Motion carried 5-0. Appeal#8—Alliant Tech Systems, Inc., John Hoyt @ Ryan LLC. Sinell explained John Hoyt of Ryan LLC, a property tax consulting group, filed the appeal by email as authorized representative for ATK as tenant. Sinell said he informed Mr. Hoyt we need to review the leases/subleases in place and income statements in order to review the property. We have not received the income information. The assessor recommends no change to the value. MOTION: Motion by Johnson, seconded by Walker, in Appeal No. 8 to affirm an estimated market value of$17,261,000. Motion carried 5-0. Appeal#9 —Traci Tomas, VP, CPG Leasing, LLC Sinell explained they made a similar appeal last year. The property is vacant land with a storage lease for a future airplane hangar. MOTION: Motion by Walker, seconded by O'Connor, in Appeal No. 9 to affirm an estimated market value of$29,000. Motion carried 5-0. Appeal#10—Moiz Akhtar, 7867 Shamrock Tr. MOTION: Motion by Johnson, seconded by Moquist, in Appeal No. 10 to reduce the estimated market value to $1,490,000. Motion carried 5-0. Appeal#11 — Kim Frye, 9110 Belvedere Dr. MOTION: Motion by Moquist, seconded by Johnson, in Appeal No. 11 to reduce the estimated market value to $420,000. Motion carried 5-0. Appeal#12 —Daniel & Laura Robbins, 11397 Landing Road MOTION: Motion by O'Connor, seconded by Moquist, in Appeal No. 12 to reduce the estimated market value to $1,075,000. Motion carried 5-0. Appeal#13 — Kelsey Kluge—7260 Willow Creek Rd. Sinell explained this appeal came in today. The assessor would like to have it referred back for further review. MOTION: Motion by Moquist, seconded by Johnson, in Appeal No. 13 to continue this item to the May 13 meeting. Motion carried 5-0. BOARD OF APPEAL AND EQUALIZATION MINUTES April 24, 2014 Page 6 B. HEAR OTHER PERSONAL AND WRITTEN APPEALS FROM SIGN-UP LIST OUTSIDE COUNCIL CHAMBERS C. SCHEDULE NEXT MEETING The next meeting of the Board of Appeal and Equalization is scheduled for Tuesday, May 13, 2014 at 7:00 p.m. D. CLOSE THE BOARD OF APPEAL AND EQUALIZATION MEETING TO ADDITIONAL APPEALS MOTION: Motion by Walker, seconded by O'Connor, to close the Board of Appeal and Equalization meeting to additional appeals. The motion carried 5-0. IV. CONTINUE THE BOARD OF APPEAL AND EQUALIZATION MEETING MOTION: Motion by Moquist, seconded by O'Connor, to continue the Board of Appeal and Equalization meeting to May 13, 2014. Motion carried 5-0. The meeting was continued at 8:25 p.m.