Land developers challenge property assessments for bare lots on Willmar's east edge
WILLMAR--The fallout from the city of Willmar's failure to properly assess vacant platted lots has percolated its way up to the county level. Two Willmar residential developers took their case to Kandiyohi County this week, claiming their bare pl...
WILLMAR-The fallout from the city of Willmar's failure to properly assess vacant platted lots has percolated its way up to the county level.
Two Willmar residential developers took their case to Kandiyohi County this week, claiming their bare platted lots have been assessed for more than they're worth.
Ron Christianson and Warren Erickson made their appeal Monday to the county Board of Equalization.
"Land has not increased that much in value, folks, not in Willmar," Christianson told the board.
Both are seeking to have the assessed value of the lots-about 90 parcels in all, located in Woodbury Addition and Trentwood Estates-lowered to better reflect what they believe is the true value.
A decision will come next week when the Kandiyohi County Board of Commissioners meets Tuesday. The delay will allow enough time for the board to view the property firsthand and have further discussion.
Both Christianson and Erickson saw significant increases this year in the assessed valuation of their undeveloped residential lots. In many cases the value more than doubled, impacting the taxes they'll pay on the properties next year.
But it's uncertain whether Kandiyohi County can grant much relief.
At issue is a state law requiring vacant lots platted on or after Aug. 1, 2001, to be valued at or near market value. Assessors have seven years to bring bare land up to full market value once the lots are platted.
When the city merged its assessor's office last year with the Kandiyohi County Assessor's Office, it was discovered that the law hadn't been followed by the city of Willmar. Many of the lots in Trentwood Estates and Woodbury Addition were platted more than 10 years ago, forcing the assessor's office to bring them up to market value in one fell swoop in order to comply with state law. The two residential developments are on the city's east fringe.
Val Svor, county assessor, said her office has to work within the mandates.
"We are required to value at market value," she said.
Values must be within 90 percent to 105 percent of what the market indicates, she said.
"I feel their pain," she said of the developers. "I still have a job to do."
A review of sale prices for bare platted lots throughout the city showed a sizable gap between what the lots in question were assessed for and what comparable lots were actually selling for, Svor said.
That's a red flag that the lots were under-assessed, she said.
Svor said she adjusts for the additional cost of making a parcel ready for improvements-for example, when city water and sewer don't extend beyond the curb. She also discounts for parcels that don't have utilities or curb and gutter.
Her office also is willing to make allowances for lots that might be less desirable or have fewer amenities.
"I am not inflexible by any means," Svor said.
But the goal of her office is to be fair to all taxpayers when determining market value, she said, adding that other taxpayers have to pick up the burden when properties are undervalued.
Erickson, owner of the Erickson Land Co., said he was "very surprised" when he opened his property value statement from the county assessor this spring and saw the jump in assessed valuation on his vacant Trentwood Estates lots.
Christianson, a partner in the family-owned Christianson Properties and also a member of the Willmar City Council, voiced dismay too with the increase.
He and Erickson said the bare platted lots have minimal value until they're actually purchased and someone builds a home on them. They said sales have been slow in both Trentwood Estates and Woodbury Addition, averaging two to three sales per year.
"Right now, any lot that I sell I'm basically breaking even on," Erickson said.
Residential developers won't want to do business in Willmar if the cost becomes too punitive, he said. "At what point do I walk away from those lots?" he asked.
Christianson said he knows there are regulations that must be followed but said they're "really guidelines."
"You have some discretion on what to do for local citizens and local developers that are trying to keep the tax base expanding," he said. "We are doing all we can to expand the tax base."
The challenge for the County Board is how to balance relief for property owners while adhering to the law, said Roger Imdieke, board chairman.
"This is not black and white," he acknowledged.