Ownership of Northtown Mall has filed petitions with the Minnesota Tax Court challenging the estimated market value placed on the shopping center property by the Anoka County Assessor’s Office over a two-year period.
To help the county defend the petitions, the Anoka County Board Aug. 8 approved a professional services agreement for appraisal work by Shenehon Business & Real Estate Business and Real Estate Valuations in an amount not to exceed $70,000.
Typically, the assessor’s office defends the county in petitions to the state tax court, but given the magnitude of this petition and the tax dollars at stake, completing daily work in conjunction with such a large tax court appraisal is not feasible, according to County Assessor Alex Guggenberger.
The appraisal work will also require trips to other states to compare shopping centers, Guggenberger said in an interview following the county board action.
Shenehon is very experienced in this type of work, he said.
The petitions comprise nine parcels that make up the shopping center property, Guggenberger said.
But the parcel on which Home Depot is located is not part of the court challenge because it is owned by Home Depot, he said.
According to Guggenberger, the petitions cover the 2015 estimated market value for tax year 2016 and the 2016 estimated market value for the 2017 tax year.
For the 2016 tax year, the county’s estimated market value on all nine parcels was $51,773,000 and the property tax was $1.96 million, while for the 2017 tax year, the 2016 estimated market value was set by the county at $67.55 million with the total tax $2.47 million.
The taxes do not include special assessments, which are not under appeal, Guggenberger said.
And there was $1.15 million in new construction at Northtown Mall in 2015 that was reflected in the 2016 estimated market value, he said.
In figures provided by Guggenberger, the county’s estimated market value for the shopping center in 2014 was $51.77 million and the total tax paid in 2015 was $2.02 million “This was not appealed,” he said.
For taxes payable in 2018, which won’t be set by taxing jurisdictions that include the county, the city of Blaine and Spring Lake Park School District 16 until December, the 2017 estimated market value is $66.94 million.
The petitioner is Glimcher Realty Trust/Glimcher Northtown Venture LLC/GB Northtown LLC, Guggenberger said.
The exchange of appraisals for the first petition (2015 estimated market value for tax year 2016) has to be submitted to the state tax court is Nov. 27, but if the petition is settled out of court prior to that date, the county will only be on the hook for $20,000 of the appraisal agreement cost, he said.
The tax court has set a trial-ready date of Jan. 29, 2018 on the first petition, but the 2017 petition is not yet under scheduling order, Guggenberger said.
The county has not received any indication from Glimcher on what it believes the estimated market values should be for the two years, according to Guggenberger.
“There have been some negotiations, but they have not gone anywhere,” Guggenberger said.
According to Guggenberger, the county assessor’s office uses a computer-assisted mass appraisal system to determine property values, a system that is a cost based and values various components of each parcel based on data collected as part of a five-year requirement.
“The cost data that is utilized is reviewed and adjusted annually based on a detailed sales ratio analysis performed on recent sales, Guggenbeger wrote in an email.
“It’s the sales in any given year and our subsequent adjustments to market value based on our sales ratio analysis that get reviewed by the Minnesota Department of Revenue to ensure we are meeting state of statute requirements.”
Northtown Mall opened in 1972. For many years it was owned for many years by Glimcher Realty Trust, Columbus, Ohio, but in January 2015, Glimcher merged with Washington Prime Group, owned by the Simon Property Group, and is now known as WP Glimcher, which, as of December 2016, owned and managed 114 properties across the country.
The Minnesota Tax Court is a specialized, executive branch of the courts established by the Minnesota Legislature to hear only tax-related cases. The court’s three judges all have expertise in tax laws, according to the court’s website.