Park Rapids Board of Appeal OKs property value adjustments
The city board of appeal and equalization upheld seven appeals on April 15, 2021 and heard a report on property values based on 2019-20 sales.
The Park Rapids Board of Appeal and Equalization on Thursday, April 15 upheld seven recommended adjustments to taxable property values in the city.
Mayor Ryan Leckner chaired the board, which consisted of city council members Erika Randall, Tom Conway and Bob Wills.
Richard Bradow appealed the assessment of two of the three lots he owns on the south shore of Mud Lake, off East River Drive.
According to City Assessor Loren Tolkkinen, one of the lots comprises a small triangle of land along with a significant portion of the lake. Because most of the lot is unusable because it’s underwater, Tolkkinen recommended exempting the value of the unusable portion from property tax, lowering the taxable value of the parcel from $10,400 to $3,800.
Bradow had asked whether the value on this parcel could be frozen, to keep the tax rate on it from creeping up and to facilitate selling it to a neighboring property owner. County Assessor Jamie Freeman said that is not an option.
Regarding the lot where Bradow’s home is located, Tolkkinen explained that lots that can be split into conforming residential parcels are taxed at a higher rate than unsplittable lots. Although Bradow’s home place is theoretically splittable, Tolkkinen said the location of the house makes it economically unfeasible to split the lot, so he recommended assessing it as unsplittable, reducing the assessed value from $277,700 to $275,300.
Randall moved to approve both recommendations. The motion passed unanimously.
Freeman recommended removing the value of a travel trailer owned by Jeff and Jodie Wohlgamuth from the tax roll.
Freeman said the couple appealed the tax statement they received on the trailer, which was parked at Big Pines RV Park, because they already had tabs for the trailer from the North Dakota Department of Motor Vehicles.
Noting that tax statements are issued for RVs set up for seasonal use if no vehicle tabs are displayed, Freeman said the Wohlgamuths were advised about how to display the tabs properly.
Deputy County Assessor Maria Shepherd said their office handles similar appeals administratively when they’re received within 10 days of the tax statements going out. In cases like this, where the appeal missed that deadline, it has to come before the city council.
Conway moved to approve Freeman’s recommendation, and the motion passed unanimously.
Ben Franklin issue
Tolkkinen acknowledged he had made a mistake in the tax classification of the basement area of the Ben Franklin store, which owners Frank and Lucienne Bray improved last year.
Tolkkinen explained that the property is split between a non-homestead residential classification for the apartments on the second floor and a commercial classification for the store itself. He said he inadvertently included the basement in the valuation not of the store but of the apartments.
As a result, Tolkkinen said, part of the valuation that is overridden for apartments was mistakenly overridden for the portion of the store that was placed on the wrong record. Therefore, he recommended correcting the error. He said this would change the value of the store from $296,700 to $348,900.
Randall moved to approve this recommendation, and the motion passed unanimously.
Assistant County Assessor Lauren Anderson recommended adjusting the valuation of a parcel owned by David Bjerklie on East River Drive.
Anderson explained that the parcel was linked, for valuation purposes, with a neighboring lot where Bjerklie’s primary residence was located and both lots were classified as homestead. When Bjerklie moved away and homesteading was removed from the primary parcel, it was inadvertently left on the secondary parcel.
Anderson recommended removing homesteading from the secondary parcel as well, changing its classification to seasonal. Randall’s motion to that effect passed unanimously.
Anderson presented another travel trailer appeal brought by Gary Weicherding, similar to the Wohlgamuth appeal. Wills’ motion to withdraw the tax statement passed unanimously.
Tolkkinen also recommended reclassifying a lot on the first block of 6th Street East, behind the Affinity Realty office, owned by Park Rapids PR, LLC.
He explained that the company purchased the lot with the express purpose of turning it into a parking area for the realty office, but when street improvements on Park Avenue opened up space for on-street parking, they decided to leave the parcel as-is.
Tolkkinen said he had reclassified the parcel from residential to commercial and assessed it as part of the realty office site. He recommended returning the parcel to a non-homestead residential classification, changing the value from $8,500 to $9,800.
Tolkkinen further explained that the increase in valuation is due to the parcel being assessed as a separate site. Wills’ motion to approve his recommendation passed unanimously.
To explain how property values were adjusted for this year’s assessment, Tolkkinen presented a sales study for the period from Oct. 1, 2019 to Sept. 30, 2020.
Under state guidelines, he said, property values are adjusted so that, on average, estimated property values in a neighborhood and use classification reflect actual sales within a range from 90 to 105 percent.
Tolkkinen said there were 58 qualified sales of improved residential and seasonal properties during that period in Park Rapids. He compared this to 84 sales during the previous year.
Despite this decrease, Tolkkinen said, “There was a limited supply of housing on the market this last year, and I think that’s continuing this year. If you talk to a realtor, they say when properties under $150,000 to $200,000 come on the market, they’re sold within a week.
“So, it’s a pretty strong market for those residential properties, and it sounds like that will continue for the foreseeable future.”
He reported that in residential property values:
The city’s overall median sales ratio, measured against 2020 estimated market values before values were adjusted, was 88.5 percent. After raising residential values, the adjusted ratio is now 94.1 percent.
Bare lots up to 1 acre went up in value by 10 percent from last year, except in the northeast section of town. The value of lots around 5 acres stayed relatively unchanged, while tracts over 10 acres in size went down about 15 percent.
Land values on the Fish Hook River remained unchanged, while Fish Hook Lake and Mud Lake land values went up 5 percent.
Regarding commercial properties, Tolkkinen reported there were eight sales of improved properties during the study period, with an overall median sales ratio of 97.1 percent compared to 2020 values, and an adjusted ratio of 97.9 percent compared to 2021 values.
In finer detail, he said:
Values along State Hwy. 34 East went up 3-5 percent.
Values on Hwy. 34 West, on U.S. Hwy. 71 and in outlying areas went up 8-12 percent.
Values on South Main Avenue were down roughly 10-20 percent.