OLIVIA -- Years of litigation over how Renville County should value and tax the Southern Minnesota Beet Sugar Cooperative property will likely come to trial this April in Renville County District Court.
The Renville County Board of Commissioners signaled that an out-of-court settlement does not appear likely when the board informally agreed at its meeting Tuesday to consider additional funding for the costs of defending the county. Commissioners will decide at next week's meeting whether to authorize an additional $175,000 toward the ongoing litigation costs.
To date, the county has approved $578,269.97 toward the costs of litigation, according to information provided at the meeting.
The Southern Minnesota Beet Sugar Cooperative has filed five separate lawsuits challenging how its property is valued for taxing purposes for the years 2004, 2005, 2006, 2007 and 2008. There have been rulings by the Eighth Judicial Tax Court and State Supreme Court on cases involving the 2004, 2005, and 2006 cases, but no final resolution.
Those three cases have been returned to the tax court, where they are currently stayed under an agreement between the parties, according to the attorney representing the county, Marc Manderscheid, of the Briggs and Morgan Law Firm, Minneapolis.
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Contacted after the meeting, the attorney said that the parties agreed that rather than have five cases active simultaneously, the parties would litigate the issues in the 2007 and 2008 cases.
Those cases are currently scheduled for a hearing March 3 and trial on April 28. District Judge Bruce Christopherson recently ruled that for the 2007 and 2008 cases, he would abide by earlier court rulings finding that the highest and best use for the Southern Minnesota Beet Sugar Cooperative is as a sugar processing facility, and that it will be considered a special use facility.
Both of those rulings are seen by the county as supporting its approach as to how the sugar cooperative's property should be valued.
It's a very complicated tax case, said Manderscheid. Both parties have completely different approaches as to how the cooperative's property should be valued for taxing purposes. The sugar cooperative argues for a sales comparison approach, while the county favors a cost approach, he said.
The different approaches result in very different values to the property. The values show just how far apart the two parties are. In the 2007 and 2008 cases, the sugar cooperative argues that its property should be appraised at $7.5 million. The county has argued for a $55 million appraisal, while the courts have used a "default'' assessment of $40 million.
The courts did not specify how the default assessment was reached, and that remains an issue in the three cases currently in the tax court.
Manderscheid said he does not anticipate an out-of-court settlement at this point, and he believes the matter will go to trial.
At its meeting, Renville County Board expressed its disappointment that a ruling by the state's Supreme Court did not lead to a resolution of the case.
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Ultimately at stake is the taxes paid by the sugar cooperative. Court records for taxes payable 2005 showed the taxes at $557,024.
The cooperative is represented in the litigation by Attorney James H. Gilbert of Minneapolis. He was unavailable for comment Tuesday.
