DISCLAIMER

 

05-0627R


RESOLUTION AUTHORIZING AN AGREEMENT FOR APPRAISAL SERVICES WITH THE VALUATION GROUP, INC., RELATED TO THE KOHLS TAX COURT PROCEEDINGS IN THE AMOUNT OF $6,000.

BY COUNCILOR STAUBER:

     RESOLVED, that the proper city officials are authorized to enter into an agreement substantially in the form of that on file in the office of the city clerk as Public Document No. __________ with The Valuation Group, Inc., for appraisal services related to the tax court proceeding involving the Kohls store property near Miller Hill Mall in the amount of not to exceed $6,000; payable from Fund 100-700-1407-5441.


STATEMENT OF PURPOSE:  The purpose of this resolution is to authorize an agreement with The Valuation Group, Inc., to provide appraisal services necessitated by the tax court proceeding instituted by Kohls seeking reduction of its real estate taxes on its store located near Miller Hill Mall.


The first setting for tax court is September 19, 2005. We will be requesting a continuance and the trial will be rescheduled for a later date.


The issue is the validity of the city assessor’s determination of taxable estimated market value for taxes pay 2005. The assessor has established the value as $5,805,000 for pay 2005, the valuation includes the $2,000,000 expansion of the property completed the prior year. Kohls contends that the property is overvalued and is not taxed fairly and equitably. If Kohls is successful in reducing the value to the amount they claim is appropriate, it would cause the city to refund a portion of the $27,932 in real estate taxes already received by the city, either as a pay-back or as a set-off to future receipts, and an undetermined tax dollar loss per year thereafter, based on current tax rates and the resulting valuation set by Minnesota tax court. At this time, there have been no representations made by either Kohls or their attorney as to the amount of reduction they are seeking in tax court.


Because of the amounts at risk, the assessor has recommended bringing in a nationally recognized expert in valuing retail establishments such as Kohls, The Valuation Group, Inc. and its principal, Paul G. Bakken, to support the assessor’s determination of value with his independent, expert valuation. The petitioner has also retained an appraiser who is recognized as a national expert on mall related appraisals.


Because this matter is expected to go to trial, the amount of this contract is higher than in other cases in that it covers both the limited opinion of value and related, pre-trial work and, in addition, an amount to cover the cost of trial testimony and a full appraisal.