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STATE OF MINNESOTA IN SUPREME COURT A11-0399 Tax Court Berry & Co., Inc., Relator, vs. County of Hennepin, Respondent. ________________________ Filed: August 24, 2011 Office of Appellate Courts Gildea, C.J. Took no part, Meyer, J.

William R. Skolnick, Amy D. Joyce, Skolnick & Shiff, P.A., Minneapolis, Minnesota, for relator. Michael O. Freeman, Hennepin County Attorney, Michael Bernard, Assistant County Attorney, Minneapolis, Minnesota, for respondent. ________________________

SYLLABUS 1. The tax court's determination that the highest and best use of the subject

property was redevelopment was not erroneous. 2. The tax court's valuation of the subject property is supported in the record

and not clearly erroneous. Affirmed. Considered and decided by the court without oral argument. 1

OPINION GILDEA, Chief Justice. Following a trial, the Minnesota Tax Court determined the value for property tax purposes of relator's property in Wayzata, Minnesota. Relator, Berry and Co., Inc. ("Berry"), appeals to our court, claiming that the tax court erred in determining the highest and best use for the property and in valuing the property. We affirm. Berry contested the 2007 and 2008 assessed values of the subject property, which is located at 253 Lake Street East, Wayzata, Minnesota. The subject property totals 53,227 square feet. There are three buildings on the subject property, but both Berry and respondent Hennepin County agree that the buildings add no value to the property. The subject property is classified under city ordinance as commercial and zoned as C-4A, Limited Central Business District. The County assessed property taxes on the subject property based on its conclusion that the property had an estimated market value of $2,540,000 as of January 2, 2007, and $2,650,000 as of January 2, 2008. Berry petitioned the tax court for relief from the County's property tax assessment. At trial, Berry and the County each offered expert appraiser testimony as to the estimated market value of the property. Both appraisers used the market sales comparison approach to value the subject property. This approach requires the appraiser to compare "the subject property with sales of other comparable properties, adjusting for differences such as location, size and time of sale." Carson Pirie Scott & Co. (Ridgedale) v. Cnty. of Hennepin, 576 N.W.2d 445, 447 (Minn. 1998). The

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tax court adopted this valuation approach, and the parties agree that this is the proper approach. Berry's expert used five comparable properties, also located in Wayzata's Limited Central Business District, in his analysis. He concluded that the highest and best use of the subject property was "interim occupancy of the existing buildings, as-is, for the nearterm future. Thereafter, the subject improvements would be razed to construct new improvements . . . ." Based on his analysis, Berry's expert valued the subject property at $1,620,000 as of January 2, 2007, and $1,550,000 as of January 2, 2008. The County's expert used four comparable properties from the Lake Street Market Area1 in his analysis. He concluded that the highest and best use of the subject property was redevelopment. Based on his analysis, the County's expert valued the subject

property at $3,881,000 as of January 2, 2007, and $4,153,000 as of January 2, 2008. The tax court determined that the highest and best use for the subject property was redevelopment. The tax court also agreed with the County's expert on the valuation question. Specifically, the court concluded that the market value for the subject property as of January 2, 2007, was $3,881,000, and that the value as of January 2, 2008, was $4,153,000. On appeal, Berry challenges the court's highest and best use determination and its valuation for both 2007 and 2008.

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The Lake Street Market Area is an area

Download A11-399, Berry & Co., Inc., Relator, vs. County of Hennepin, Respondent..pdf

Minnesota Law