Value of two commercial parcels lowered after recommendation by assessor
Two commercial properties in Park Rapids received a decreased valuation after it was deemed they were too high.
The Park Rapids local board of appeal and equalization met last week to approve recommended changes to appeals within the city.
Mark Hewitt, representing Dorset Bancshares Inc., parent company of Northwoods Bank, came to the board seeking a lower valuation for some property he acquired through foreclosure.
The property is located east and northeast of the Walmart and is split into four lots, two zoned residential and two zoned commercial.
"We're required to have an appraisal when we make the loan and we're also required to have an appraisal when we acquire it through foreclosure," Hewitt said. "The estimated market value is substantially higher than the last two appraisals we've received."
The disparity makes it difficult to sell the property, he said.
Hubbard County assessor Bob Hansen said the two parcels on the south end are commercial and the northern two parcels are residential.
"My main concern is the two commercial parcels," Hewitt said.
Those two parcels are estimated at $218,000 for the 8.17 acre lot and $228,300 for the 8.59 acre lot. They each have city sewer/water.
The parcels don't, however, have access from a road. This is part of why Hewitt would like to see a decrease in property value.
Appraisers, along with assessors, have had difficulty determining a good value for the property because it's been difficult to find good comparables, said city assessor Loren Tolkkinen. The property is unique and there haven't been a lot of sales in the past few years.
"The new appraisals we're getting now are much lower," Hewitt said in comparison to valuation of properties.
Both residential and commercial are selling below the value, he said.
At first, the assessors had a difficult time making a recommendation on the property because it didn't fit into a category very well. Eventually, Tolkkinen recommended a reduction of 10 percent on each of the commercial lots for a combined value of $555,700.
The Park Rapids City Council, meeting as the board of appeal and equalization approved the recommendation.
The changes will go to the county for approval.