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Ag land continues steep value increase


Fri, Jun 27th, 2014
Posted in All Government

Fillmore County Assessor Cynthia Blagsvedt reviewed the numbers on property values at the June 24 meeting of the Board of Appeal and Equalization. Because there are only four commissioners at this time, County Auditor/Treasurer Shirl Boelter was sworn in along with the commissioners to serve on this board.

The value of good tillable agricultural land has doubled in just four years and more than tripled in nine years. County wide tillable land median selling price was $7,150 with a high sale of $10,000 per acre. These increases have helped to cause the township levy rates to go down because of an increased overall tax capacity.

The total value of all the agricultural/rural land (over $3 billion) now makes up 77 percent (last year 74 percent) of the total property value in the county including all classifications of property. Ag land value saw an increase of 16.54 percent in one year. Residential properties make up 19 percent or more than $785 million of the total property value in the county. The one year increase in value for residential property was 1.44 percent. Other categories including commercial make up just over 4 percent of the total property value in the county. The total value increase for the county including all classifications of property for one year was 12.69 percent, primarily due to the increase in value of tillable agricultural land.

Due to residential sales in individual cities estimated market values required a decrease in the cities of Harmony, Mabel, and Peterson and an increase in Preston and Rushford.

New construction had picked up over one year for most classifications except agricultural/rural, which was down 25 percent. However, new construction on agricultural/rural properties still totaled more than $5 million.

Appeals

This board is tasked to hear appeals of the current year valuations or classifications from property owners who want to appeal the total estimated market value of their property. Board members must justify value changes for any property as this will “have the effect of shifting the tax burden to other property owners.”

Stone Mill Hotel and Suites and Feed Mill

Richard Lamon appealed the valuation and/or classification on two parcels located in Lanesboro, Stone Mill Hotel and Suites and the red Feed Mill building. He explained that Cynthia Blagsvedt and property appraiser Ron Vikre both looked at his properties.

Lamon was appealing the valuation of the Stone Mill property and the classification of the red Feed Mill property.

Lamon was prepared with his Schedule C to show the net profit or loss on the business related to the properties. Duane Bakke warned him that if he handed that information to the board it would be become public record. Also, it would not help the board in determining valuation of the Stone Mill.

Blagsvedt explained that there is a process to determine valuation based on the income approach. Information had not been previously made available to the assessor’s office to see if that process would affect the estimated market value of this property. Vikre explained that they would have to determine the capitalization rate and apply the numbers he has that relate back to value. This second valuation of the property would then have to be looked at to see if it is valid. The Schedule C information for the past three years would be used in this process.

Vikre noted that the sale of Mrs. B’s in Lanesboro is the most comparable property to the Stone Mill. Vikre said the adjusted sales price, excluding personal property, was $304,000. The current taxable market value on the property is $327,000. He explained that in the next sales study this sale could affect values for 2016. Values for 2015 are established in 2014.

Bakke suggested that Lamon go through the income process at the assessor’s office and see what adjustment can be made, if any. Vikre said that once the board adjourns, values can not be changed. The estimated market value of the Stone Mill property is $319,000 currently. A motion to leave the valuation as is with a recommendation to go through the income process for a future evaluation was approved.

The Feed Mill currently is classified as commercial. Lamon requested that a portion of the building be reclassified as there will be one or two rooms which can be rented. Blagsvedt explained that if certain criteria is met, it could be reclassified. At this time Lamon had not submitted the permit in January which would have been necessary to meet the required criteria. Vikre said that if the criteria is met, the change in classification could be made next year.

The total estimated market value of Lamon’s two properties is about $550,000 with a total property tax of $13,042. He maintained that the two parcels would not be salable at their current estimated market value.

A motion was made and approved saying the red Feed Mill classification would not be changed and the market value would be held at the current value.

Vitse Appeal

Paul Vitse, Preble Township, had questioned the valuation of his property due to the condition of a bridge on a roadway used to get to his property. In a letter to the assessor he argued that his property valuation should be reduced since the bridge which is rated at three ton is not adequate to allow access by emergency vehicles, for example a fire truck.

At the May 27 meeting of the county board a resolution was approved which requested a variance to replace a timber deck bridge in Preble Township east of Choice on a dead end limited use roadway. The variance would allow the structure to be replaced with a relatively low cost structure consisting of three box culverts with concrete decking. The variance was approved by the state. County Engineer Ron Gregg explained that the current bridge is eleven and one half feet wide and will be replaced later this fall or next spring with the low cost structure that will be raised a couple of feet and have a twenty foot wide deck.

Vitse is one of two seasonal residents that use this roadway.

Marc Prestby said he would like to have a discussion with Vitse about the bridge replacement. A motion was made and approved to have no change in valuation of the Vitse property.

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