Seven years of property tax litigation: Renville County, beet sugar co-op at odds over assessed value
RENVILLE -- As of this month, Renville County and the Southern Minnesota Beet Sugar Cooperative have been locked in litigation over the property taxes the cooperative pays for seven years running without resolution.
The county's legal bills in the dispute to the law firm of Briggs and Morgan, of St. Paul, now total $1,243,774.46, and continue to grow. The County Board of Commissioners will be approving a $31,663.53 bill next week for legal services during the month of March to the firm.
Yet, like taxis lined up waiting for fares at the airport, lawsuits for taxes payable in 2008, 2009, 2010 and 2011 are still pending in District Court.
No one is opposed to seeing a resolution soon, but it's not expected either.
The cooperative recently indicated it would file a lawsuit for taxes payable in 2012 as soon as it could legally do so, according to the county's legal counsel, Marc Manderscheid with Briggs and Morgan.
The District Court has issued rulings in the lawsuits for taxes payable in 2007 and 2008, but lawsuits for the earlier years of the dispute remain unresolved. A lawsuit for taxes payable in 2006 is in the tax court, on hold pending the outcome of the earlier cases.
Both sides are anticipating a ruling by District Eight Tax Court Judge George Perez within a couple of months on lawsuits pertaining to taxes payable in 2003 and 2004.
The cases were remanded back to the tax court by the Minnesota Supreme Court.
Efforts to settle out of court have not succeeded either. The two sides met in mediation in November, and based on comments from both sides, made no progress whatsoever.
Renville County Assistant Attorney Glen Jacobsen said he has some hope that the awaited tax court ruling could provide a starting point for a second round of talks. "Hopefully we will get another chance to talk and start heading down that road again,'' he said.
The differences between the two sides have only grown over the seven years.
The sugar cooperative is challenging how its property is assessed for tax purposes, and consequently the size of its annual tax bill to Renville County. The initial lawsuit asked to reduce the assessed value to $8.5 million.
Its property is assessed at nearly $40 million in value, and results in an annual property tax bill to the county, Renville County West School District, township and other entities exceeding $1 million.
The sugar cooperative argues that the assessed value is grossly overinflated and out of line with the value of other, similar agricultural processing facilities.
The cooperative's attorney, Robert A. Hill of the Robert Hill Law Firm in Stillwater, charges that on a ground floor basis, the assessed value that Renville County uses is roughly in the range of $250 per square foot.
He points to the Jennie-O Turkey Store processing facility in Willmar, where he said the square foot assessment is closer to $12 per square foot; or, the IDS Tower in Minneapolis, where the assessment is closer to $80 a square foot.
The cooperative argues that the value should be determined by comparable sales of other processing facilities, where the values typically run in the neighborhood of $10 to $12 a square foot.
The county has argued -- and the District Court rulings for taxes payable in 2007 and 2008 upheld the argument -- that assessments should be based on the appraisal of the property as a "special use'' facility. The District Court also included tanks, silos and other structures as taxable property.
From the start of the litigation to today, there is somewhere between $7 million and $8 million in taxes under challenge by the cooperative.