Winter 2021

EQUAL EYES OFFICIAL PUBLICATION OF THE MINNESOTA ASSOCIATION OF ASSESSING OFFICERS

MNMAAO.ORG

Winter 2021 VOLUME 43 NUMBER 163

The Greatest Architectural Loss in Minneapolis History Education: A Year in Review Photo Contest Winners

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EDITORIAL COMMITTEE

Executive Officers President

Patrick Chapman, SAMA st 1 Vice President

Joe Udermann, SAMA 2nd Vice President

Tim Bulger, SAMA Financial Officer

Chase Peloquin, SAMA Past President

Daryl Moeller, SAMA

Regional Directors Region 1

Ryan DeCook, SAMA Region 2

Jennifer Flicek, SAMA Region 3

Jean Sowada-Popp, SAMA Region 4

Amber Peratalo, SAMA Region 5

David Parsons, SAMA Region 6

Doug Bruns, SAMA Region 7

Chris Odden, SAMA Region 8

Mary Jo Otten, SAMA Region 9 Joshua Hoogland, SAMA Committee Chairs Agricultural

Mark Koehn, CMA CAMA and GIS

Randy Lahr, SAMA Conference Coordinator

Paul Knutson, SAMA, RES Editorial

Lori Thingvold, SAMA Wright County Managing Editor

Jason Jorgensen, SAMA Wadena County Associate Editor Committee Chair

Jamie Freeman, SAMA Clearwater County

Information Systems

Michael Neimeyer, CMA

Legislative

Mark Peterson, SAMA

Membership Coordinator

Rebecca Malmquist, SAMA, RES

Nominating and Procedures Residential Rules and Resolutions Sales Ratio Scholarship Secretary Site Selection

Nancy Gunderson SAMA Jake Pidde, SAMA Stearns County Clay County

Jason Jorgensen, SAMA

Amber Swenson- Hill, SAMA Polk County

Strategic Planning

Michelle Snobl, AMA

John Conway, SAMA Joe Udermann, SAMA Dell Sanko, CMA Carrie Borgheiinck, SAMA Penny Vikre, SAMA Lisa Clarke, CMA Michelle Moen, SAMA

Summer Seminar Coordinator

Kim Jensen, SAMA, CAE

Ann Miller, SAMA Treasurer

Reed Heidelberger, SAMA U40/10 Troy Halter, CMA

Tax Court / Valuations

Educational Workgroups

Assessor Development Course Management Mike Bjork, AMA Washington County

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Missy Manke, CMA Wright County

Winter 2021 / Equal Eyes

Holly Soderbeck, SAMA MN Dept of Revenue

Patrick Chapman, SAMA

Course Curriculum & Standards

Tina Diedrich-Von Eschen, SAMA Sherri Kitchenmaster/Jessi Glancey, SAMA

Education Coordinator/Online Admin.

Emily Squyres

INdex Commissioner’s Comments 4 President’s Perspective

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MAAP Update

8 10

Education

The Greatest Architectural Loss in Minneapolis History

12

Top 10

20

Classifieds

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What You Get For

23

Out of the Past

25

Transitions

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Tax Court

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* The statements made or opinions expressed by authors in Equal Eyes do not necessarily represent a policy position of the Minnesota Association of Assessing Officers.

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Commissioner’s Comments

By Robert Doty MN Revenue Commissioner

New Year, New Opportunities Now that 2021 is here, the Department on the agenda as the governor and of Revenue is gearing up for another legislators craft a budget for 2022productive year for the agency and our 23. partners like MAAO. You play a key role in our property tax Before continuing this discussion, system, which helps fund important I’d like to introduce myself as the public services across Minnesota. new revenue commissioner. For the Whatever this year brings, the last three decades, I’ve worked as an department is here to support you accounting, finance, and organizational with the tools and guidance you need. leader in both the private and public In normal times, physical inspections sectors. and meetings make up a large part of your work. But last year we all Most recently, I served as Revenue’s needed to adapt quickly to social assistant commissioner for tax policy distancing requirements and other and public engagement. In that role, safety measures just as appeals I’ve seen how the department’s season began – one of the busiest partnership with MAAO benefits our times on the property tax calendar. state.

We continued to adapt our routines throughout the year. Together, we I look forward to building on this tackled many questions about how to relationship, and to meeting you – fulfill assessors’ statutory duties in a whether virtually or in-person – at safe way for you and the Minnesotans future MAAO-Revenue events. we all serve.

Fluid Situation The COVID-19 pandemic continues to present special challenges to property assessors and dominate public debate at the Capitol as the legislative session begins (January 5). Taxes will also be

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I know our Property Tax Division discussed these, and other topics, with you at the MAAO Fall Conference in October. That discussion showed how many assessors found the transition to working from home relatively

easy, though not always seamless, which mirrors our experience at Revenue.

We’re fortunate that telework and online conferencing technology make it possible to do much of our work at a safe, social distance. We may be able to transition back to office work this year, as COVID-19 vaccines become more available.

However, we all continue to deal with some big unknowns. It’s not yet clear when things will start returning to what we remember as “normal.” At the Fall Conference, some concerns were raised about the pandemic’s continuing impact on our collective work.

We continue to take questions and consider options for how to administer property taxes in a safe and fair manner for 2021 and beyond.

For now, please stay safe and follow our existing guidance on the use of virtual meetings and other tools to do your work remotely.

The department will continue to monitor this situation and the

Commissioner’s Comments, continued

legislative session. As always, we’ll provide updates and guidance on any law or policy changes that affect your work.

If you have any questions, please • Providing information in alternate email us at proptax.questions@state. languages or formats for people mn.us or contact your Property Tax whose primary language is not Compliance Officer.

English, or who may have visual or other impairments to reading

Short-Term Rentals

Building One Minnesota

Speaking of changes, in December we sent you guidance on a new law that clarifies the classification of residential properties rented out by their owners. Qualifying short-term rental properties may be classified as 4b(1) residential nonhomestead if they: • Rented for more than 14 days in the previous year

Finally, I’m honored that Gov. • Internship programs to draw Tim Walz appointed me to lead the new assessors from diverse department. I share his vision for One backgrounds into the field Minnesota. As commissioner, my top priority is to provide a fair and • Sharing information among transparent revenue system to help assessors of different ages and plan for Minnesota’s future. experiences, and mentoring staff

• Rented for periods of less than 30 consecutive days • Have fewer than four units • Are not homesteaded The new law applies only to taxes payable in 2022 and later. For 2021, the classification made during the 2020 assessment applies.

Increasing diversity, equity, and inclusion for the Minnesotans we serve and within our own agency is a key part of this effort at Revenue– as it is for all government agencies.

After the MAAO conference, several of you shared what your organizations are doing in this regard. To name a few: • Training employees on diversity, equity, and inclusion

These kinds of engagement help all of us, whether in - or outside of government. I’m excited to see the progress we’ll make together.

On behalf of everyone at Revenue, Happy New Year – and thank you for your partnership.

Robert Doty is commissioner of the Minnesota Department of Revenue.

If you have any questions, please email us at proptax.questions@state.mn.us or contact your Property Tax Compliance Officer.

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president’s perspective

By Patrick Chapman, SAMA Ramsey County

MAAO President

“The Pessimist Sees Difficulty in Every Opportunity.

The Optimist Sees Opportunity in Every Difficulty.”

– Winston Churchill I would like to thank all the members of MAAO for electing me president.

I look forward to working with all the executive board members, MAAO members and the regional directors of the next year. We have a challenge Infront of us, but it is a great opportunity to grow. We will meet this challenge.

To let you know a bit about myself.

I am currently working for Ramsey County Assessor’s office as the Residential Supervisor. We have a 23-person section that handles all 148,000 residential parcels for value and classification. I have been in this office for 13 years. Prior to working at Ramsey County, I was a fee appraiser in the metro area. I am also proud to say that I am a veteran of the US Army and was on active duty from 1987 to 1991 and was with the Minnesota National Guard from 1991 to 1997. I have many interests and most of them involve the outdoors, softball, hunting and fishing just to name a few.

Since being elected president I have

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been working on several things, mostly involving decisions on classes. I know around the state there is a wide opinion on the way that classes should be held. I will listen to all the opinions and try to make good decisions that will work for the whole of MAAO. We have challenges in front of us that none of us were really expecting. Have faith that we will make decisions that we feel are the best for all concerned.

We h a d a n e x e c u t i v e b o a r d meeting recently in Grand Rapids Minnesota. Like most of our events these days it was a hybrid meeting.

I think this will become the norm for us as we move forward. We need to find ways to stay together and be apart. We will ensure that the classes can meet social distance guidelines and be remote whenever we can. Making classes virtual is a huge undertaking. There is no quick way to get some of this done and it will take some time and effort to make strides forward. The effort that went into last year’s Summer

Seminar was tremendous. We were able to host some classes and get them done so our members could have the education they needed as the licensing cycle was coming to a close. I would like to personally thank Emily Squires for her effort in the area. She was brilliant in facilitating this effort. Other people that I would like to shine a light on were Brett Hall, Dan Squires, John Conway, Bob Thompson, and Anthony Cortilet. These individuals stepped up and walked into the unknown of the virtual classroom. Thank you to all of them for responding so swiftly to the call for action in our organization’s time of need.

The MAAO is made up of several great committees. They drive the work that our organization does.

I would like all of you to look at the webpage and look at the list of committees and see if there is something on there that you want to get involved with. I do have one chairperson that would like to step down and that would leave an

President’s Perspective, continued opportunity for someone to take over the nomination committee as Michelle Snobl would like to move on from that committee. Their work is to help find and facilitate our elected positions and is a great way for someone to get involved with MAAO. Other committees may be looking for members so take a look and take a chance to get involved.

information needed. We hope to be able to do things in person this year but are ready to pivot at a moment’s notice if we need to be remote. I would ask all members to please maintain your flexibility as we are reacting to the situation as it develops.

If you need any help reach out to our committee and we can get you the help you need.

The legislative session was long this year and in talking with our legislative liaison, Matt Hilgart, the session was one out of the norm. With COVID-19 affecting everything it made this a challenging year for the legislature. In the end we did get an abbreviated tax bill and it made the short-term rental part of the 4(b)1 residential class. It additionally allowed for a one-time transfer of a disabled veteran exclusion to the surviving spouse. We look forward to another legislative season on the horizon.

I really want to mention the job that was done by my predecessor. Daryl Moeller did an outstanding job with the worst possible situation. At the beginning of the pandemic, he had to deal with situations that were unconscionable just weeks earlier.

The care and integrity in which he made some very thoughtful decisions was impressive. I would call on all of you to thank Daryl for the job he did holding our organization together.

He was able to get Summer Seminar virtual in a couple of short months and find a hybrid option for the fall conference that worked for the whole state. MAAO will be in debt to Daryl for some time to come. And I want to personally say thank you.

As some of you know I am also on the designation committee.

This committee is instrumental in providing classes and content for members to be successful in the pursuit of their AMA designation.

Last year were we able to give the seminar remotely and provide the

me as we navigate some uncharted waters and hit some really big waves. I am looking forward to the opportunities that the next year will offer our organization. I cannot wait to see how all of you great people rise and respond. I am extremely proud of this organization and all its members. I know we will be stronger on the other side of this challenge. I look forward to the time when we can all be together again. Until that moment revel in the opportunity provided by challenge.

I hope all of you stay healthy and safe.

Patrick Chapman, SAMA President MAAO

We don’t know the future, but we can learn from the past. Know that we must be flexible. This is what I have planned for the next year. Please join

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MAAP UPDATE

By Amanda Lee 2019-2020 MAAP President amandalee@co.mower.mn.us

“If we don’t change, we don’t grow. If we don’t grow, we aren’t really living.” ~Gail Sheehy This will be my last article for MAAO as I have accepted a position in our Recorder’s Office. Our Vice President, Jenna Takemoto, from Sherburne County will be assuming my duties. I hope that you and yours are still staying healthy. Look for information coming next year for our MAAP 2021 conferences!

~Amanda Lee

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MAAP UPDATE

By Jenna Takemoto 2020-2021 MAAP President

Hello MAAO Members!

This year has quickly gone by. MAAP officers made the decision early on to put all 2020 events and seminars on hold due to the pandemic.

Our 2021 MAAP Summer Workshop will be held in St. Cloud on August 19th & 20th at the Holiday Inn. Our Winter 2021 meeting will be held at the Sherburne County Government Center in December – date to be determined. Both meetings we hope to hold in person as well as offer virtual options. We will follow all CDC guidelines.

We are working with DOR to receive Continuing Education Hours (CEH) at the winter meeting. Since we had a great turn out in 2019, we are working on getting 4 CEH credits instead of 3. Once again, we extend an invite to all MAAO members. At this time our topics for both workshops are still to be determined.

If you or any staff are not a current MAAP member and would like to join us, the annual MAAP membership fee is $10. You may contact me for details.

I encourage MAAP participation of all administrative staff in each county. We always have topics of discussion relating to some parts of our jobs. Bonus – networking opportunity is always fun! It’s amazing to be able to speak and learn from others who do the same position. It will benefit you, your office and county!

“The best way to predict your future Is to create it.” ~ Abraham Lincoln ~ Jenna Takemoto 2020-2021 MAAP President Jenna.takemoto@co.sherburne.mn.us

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MAAO Education 2020 – A Year in Review

By Emily Squyres, MAAO Education Coordinator

The year 2020 has challenged each of us and required us to be thoughtful, nimble, and innovative, and MAAO has done no less with its educational offerings.

While we began 2020 education strong with good showings for “ALP with Ethics,” “Basic Appraisal Principles,” and “Basic Appraisal Procedures” in January and February, and “USPAP” in March, the statewide shutdown in March necessitated that MAAO cancel the March “Mass Appraisal Basics” offering. That decision, and the new reality we all found ourselves within, initiated flurries of email chains and many hours spent on the phone and in video conferences discussing the next few months of courses. MAAO leadership carefully considered each inperson offering and began making the difficult decision to cancel additional 2020 education including the June “Residential Assessing 101” and “Basic Apartment Valuation” courses. It was not long before these conversations ultimately led to the decision to also cancel in-person Summer Seminars.

C a n c e l i n g t h o s e o ff e r i n g s h a d consequences for many assessors who required vital Continuing Education Hours to maintain their licensure, and the end of the licensing cycle – June 30, 2020 – was looming. The solution and was clear: MAAO would offer Online Summer Seminars. While online education was something MAAO had not previously offered, it became clear that 2020 would be the year we would 10

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jump into it - sink or swim! With a six-week countdown between the cancellation of the in-person conference and the date to open online registration, a small team of people got busy working through the many facets that would be required to successfully host MAAO’s firstever Online Summer Seminars at the end of May. MAAO’s Education Steering Committee and Conference Content Committee worked diligently behind the scenes to find instructors who were willing and able to transition their seminars to a virtual offering, modify their presentations as necessary and to re-submit those seminars for online CEH approval. These instructors adapted their presentations and took extra time to learn and practice the online platform to ensure a smooth delivery the day-of their seminar.

MAAO staff worked to identify and select an online platform to host the seminars, becoming experts in it, and training those instructors in it. The Education Steering Committee Chair and MAAO leadership worked closely with the State Board of Assessors to get each seminar re-approved for CEH’s in the online platform, and ensuring important details like registration, attendance, and attentiveness were accurately captured for assessor licensing standards. A new Online Summer Seminars website and registration process was generated,

and registration was opened a short six weeks after the initial decision to cancel the in-person conference. It was no small feat for MAAO, with no previous online education expertise, to generate an online education experience from start to finish in six weeks’ time. But it was successful, and it was all motivated by the passion and dedication of MAAO leadership to support assessors by offering the kind of high-quality education you need and expect from MAAO. With a successful Summer Seminars accomplished, we had the confidence to transition both the 8-hour Residential Case Study Exam Workshop (June) and the 8-hour Income Case Study Workshop (October) to an online platform. Both instructors delivered informative virtual workshops for assessors from across the state, giving many more of them the confidence and direction to complete their exams and move up in their designations.

While online seminars and workshops were working well, we were still anxious to get back to in-person meetings for two-day and weeklong course offerings. In order to do so, we worked closely with each event venue (and in several cases, moved venues all together), and made adjustments for the new Covid-19 reality: courses would be held in rooms four times the normal size of our classrooms (so large that the last two rows of each class

MAAO Education, continued are now referred to as the “North 40”), catering adjustments had to be made, the instructors and I became a quick draw with the temporal thermometer, and we distributed blue paper masks like candy. We were all glad when the course schedule resumed in July with “ALP with Ethics” as our first in-person offering since the pandemic crisis began, and we were thankful to be able to hold the remainder of the 2020 courses in-person, even rescheduling the previously-canceled “Residential Assessing 101” course for October.

Fall Conference was another big undertaking for MAAO education and, even with necessarily diminished in-person attendance, MAAO safely hosted 13 seminars approved for CEH’s, six of which had a virtual option and alone brought in 240 registrations. Despite the physical

distance between members, with thoughtful leadership and careful planning by the Conference Coordinators and Conference Content Committee and staff, MAAO was able to pull together again and offer vital connection and education to Minnesota assessors in a year when keeping physical distance from each other has been a defining feature of collegiality.

Looking forward to 2021, we have a full schedule of courses planned which includes considerations for the changes to licensing requirements and ongoing precautions for Covid-19 while remaining flexible to “dial up” or “dial down” restrictions in accordance with the Governor’s guidance. We are already making adjustments to early 2021 offerings in response to the changing environment and remain

optimistic that the latter 2021 courses will be offered as planned.

In the latter half of 2021, we l o o k f o r w a r d t o o ff e r i n g t h e newly-developed “Advanced Ag. Assessment” developed by the MAAO Agricultural Committee, the newlyupdated “MAAO Basic Income,” and an additional IAAO Course entitled “IAAO 101 – Fundamentals of Real Property Appraisal.” Registration is now open for each of these offerings!

MAAO recognizes the way 2020 has altered people’s expectations for education and continues to actively explore options for online education for 2021 and beyond.

If you have questions about MAAO education or are interested in getting more involved with it, feel free to reach out to Emily at: educationcoordinator@mnmaao.org.

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THE GREATEST ARCHITECTURAL LOSS IN MINNEAPOLIS HISTORY

By Melissa Manke, CMA Wright County Editorial Committee Member

light court looking down

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T

he Northwestern Guaranty Loan Building, later and more commonly known as the Metropolitan Building, was considered the city of Minneapolis’s first skyscraper and one of the most architecturally significant structures in the city’s history. It had 12 stories and stood at 218 ft tall. It had small observation towers that poked up about the corners, and a very popular rooftop garden.

The building was built for, and owned by, the Northwestern Guaranty Loan Company, Louis F Menage being the company’s founder. Menage had made his fortune while speculating on real estate in the Minneapolis area in the 1880’s, but didn’t start out in real estate.

Menage, born and raised in Rhode Island, moved to Minnesota in 1871 when advised by a physician that he had “weak lungs” – a precursor to full-blown tuberculosis. Minnesota’s “bracing climate” was then considered to be a good course of treatment.

During his first winter here, Menage taught shorthand at the local business school, and spent a couple years as a clerk and timekeeper in a Northern Minnesota timber camp.

These positions did not satisfy his ambition and he moved back to Minneapolis and opened a real estate office on Washington Avenue.

growing rather quickly, and Menage with keen foresight, bought up farmland and meadows along the city’s southern boundaries, platting the land, laying out streets and water and sewer hookups, and constructing houses. He convinced his good friend and fellow entrepreneur Thomas Lowry to lay in a streetcar line to provide transit to the hordes of new residents he expected to move into these newly developed areas. To help finance it all, he started his own mortgage banking firm, the Northwestern Guaranty Loan Company. The board members for the NGLC consisted of other prominent Minneapolis political and business figures such as: John S Pillsbury, William D Washburn, and Thomas Lowry. Menage developed most of the Lakes District as well as Prospect Park.

At the height of his career, Menage hired E. Townsend Mix, an architect from Milwaukee, to design the new home for the Northwestern Guaranty Loan Company. The Northwestern Guaranty Loan Building would later and more notably be known as the Metropolitan Building, named after the Metropolitan Life Insurance Company that bought it after NGLC collapsed.

At the time, Minneapolis was Winter 2021 / Equal Eyes

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CONSTRUCTION

The Metropolitan Building was noted as a stylistic trendsetter.

Construction of the 12-story building started in May of 1888 and its grand opening was held on May 31, 1890.

Thousands of invited guests streamed into the building to see its wonder.

The first three floors were constructed of 4-foot thick exterior walls of green New Hampshire granite. Red Lake Superior sandstone quarried near Houghton, MI, trimmed the upper nine floors, where the exterior walls slimmed to 2 feet thick. Most of the rock used to build the Metropolitan were rock-faced, meaning the face of the rock was left much as it came out of the quarry.

It’s two main entrances were arced and flanked with polished granite columns. Some of the windows through out the upper 9 levels were centered with polished granite columns as well.

The main corner of the building featured a prominent rounded bay that extended all the way to the roof and then continued upward in the form of a fifty-foot lookout tower thrust forward on massive brackets.

The roofline of the Metropolitan was visually exciting as well. Lookouts at every corner, clustered chimneys, and a heavy stone parapet that doubled as a protective railing for patrons of the rooftop garden; one of only a few in the United States, and the only one on top an office building.

From inside its second level, its most notable feature comes into view. A 56 by 90 light court with filigreed grillwork. Six manually operated birdcage-style evaluators and their machinery were open for all to see. The offices on all the upper levels were accessed by 6-foot wide glass-floored galleries

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that were cantilevered from the building’s frame, so they required no support columns. The galleries were lined with 7-foot-high Italian marble wainscoting and ornamental cast-iron balustrades with polished brass handrails. The balustrades, which featured an intricate pattern of concentric circles and spiraling curves, were made by Crown Iron Works, a Minneapolis company founded in 1878. Office doors and windows were trimmed with irreplaceable old-growth oak.

The entire twelfth floor was originally occupied by the Guarantee Loan Restaurant. The restaurant was a novelty for the young city of Minneapolis, but also quite possibly the only one of its kind outside of New York City. The main dining room was outfitted with antique oak furnishings, frescoed walls and overlooked Second Ave South.

It could seat up to 700 diners. The restaurant also had a “lady’s dining room”, a “gentleman’s café”, six private dining rooms, and a billiard room.

color glass floors

Minneapolis’ downtown was ailing postwar, and a dramatic gesture made by the city’s Housing and Redevelopment Authority (HRA) was thought to be the only cure. Demolish the city’s skid row, 22 blocks now known as the Gateway District, which primarily housed bars, liquor stores, pawn shops, and flop houses.

The Metropolitan being on the edge of this, originally made the preservation cut only to have the HRA make a case against it. In May of 1959, the process of condemnation started, even though at the time, the building was 98% occupied and generating a revenue of $300,000 for its owners.

Many arguments to save the Met were waged against the HRA’s board, at Minneapolis City council meetings, in letters to the editor in local newspapers, and in the offices of state and local politicians.

This was at a time when very few historic preservation laws existed, and the courts were not inclined to challenge urban renewal programs. The HRA was very intent on destroying the building and refused to make any concessions as one court and then another

had ruled in their favor.

On Halloween 1961, the last of the Met’s tenants were evicted.

Demolition began two months later, finishing with the last of the rubble being hauled away on September 23, 1962. Minneapolis Star columnist Don Morrison eulogized the Met’s demise as “A victim of the peculiar American idea that motion is the same thing as progress”.

THE METS DEMISE

The HRA later sold the lot, and it became a parking lot for nearly 20 years. Some parts of the Metropolitan building were salvaged. Many of the intricate iron grillwork disappeared into homes and businesses.

Many of the massive stone blocks were laid to rest in a Delano landfill. Some of that granite had later been resurrected and repurposed into a sculpture-park project in south Minneapolis.

12th floor dining hall

A very nondescript office building built in 1980 now occupies that corner. granite stone

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1

st Place

Photo Contest Winner “A Touch of Jack Frost” Lake Como St Paul

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Tim Graul Ramsey County

Photo Contest Winner “A Touch of Jack Frost” North Shore Waterfall in November

2

nd Place

Gianna Olson City of Minneapolis Winter 2021 / Equal Eyes

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3

rd Place

Lynette Gaustad Ottertail County Photo Contest Winner “A Touch of Jack Frost” Located in Ottertail County

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Photo Contest Honorable Mentions

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THE TOP 10 cOVID-19 IMPACTS ON THE REAL ESTATE MARKET

Jamie Freeman, SAMA Clearwater County Editorial Committee Member

Top 10 IMPACTS COVID-19 HAS ON THE REAL ESTATE MARKET The real estate market is not immune to the effects felt around the world due to COVID-19. As the world has adapted to the coronavirus outbreak, the real estate market has shifted as well.

1. The “Office” looks very different for many professionals who work in the real estate field. Assessors, realtors, bankers and so forth have adjusted their work and technology to meet the demands associated with the pandemic.

2. Commercial real estate sales have slowed to a crawl. As thousands of restaurants, hotels and local businesses struggle to stay open, delinquency rates for commercial loans have increased significantly.

3. Real Estate Investors are re-evaluating their choices. Rental property does not look near as attractive to buyers as it did pre-pandemic due to the decline in tenant’s ability to pay rent.

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TOP 10,

CONTINUED

4. COVID-19 has transformed the traditional single family home into a multi-functional structure. A typical residence now serves as a home, office, school, gym, restaurant and more. As COVID-19 continues to influence how we use our homes, new home designs will likely surface in the real estate market.

5. In order to keep people safe and healthy, many banks are locking their doors and using creative methods to meet the needs of consumers and the real estate industry. In addition, mortgage delays are taking place due to the staffing of third parties, such as appraisers, title companies, etc.

6. The good news is‌we continue to see low interest rates, which ups the buying power for those who are purchasing real estate in this ever-changing COVID-19 climate.

7. Virtual real estate sales and Zoom buyer consultations are now common practice.

8. Some areas are experiencing decreased buyers in the residential market due to the pandemic. Citing economic fears, furloughs and social distancing as the top reasons preventing those from buying at this time.

9. Negative impact on the Airbnb business. This once thriving business is now seeing an occupancy rate as low as 10% for some dwellings. Travel bans, social distancing and fear of spreading COVID-19 has many choosing to stay home rather than travel.

10. Construction is generally moving forward. There have been some challenges with on-site safety for workers as well as the high cost of building materials. Overall, many areas are seeing an above normal amount of new construction.

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Classifieds Amber Swenson-Hill, SAMA Polk County Editorial Committee Member

3209 Galleria #1802, Edina $5,300,000 Built in 2008, 3209 Galleria #1802 is the most expensive condo for sale in Minnesota.

What does $5.3 million get you?

Three bedrooms, five bathrooms, and 5,024 square feet. Need more? There are also 10-foot ceilings, floor-to-ceiling windows, a walk-in wine cooler, mini movie theater, library, four balconies, and four underground garage stalls.

Building amenities include pool, gym, and a walkway to the Galleria. Penthouse has its own private entrance.

Property has been listed since October 2020. HOA fees are $3,059 per a month.

The annual tax bill is $59,836.

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What You Get For A Tiny HOuse

Amber Swenson- Hill, SAMA Polk County Editorial Committee Member

What do you get for a 2016 tiny house in Minneapolis? $289,400, according to the September 2020 sale of 749 Buchanan St Ne. The main floor is a 440-square-foot heated garage, followed by living area, and roof top deck. Interior of home is one bedroom and one bath.

Taxes payable 2020 Estimated Market Value: $143,500 Taxes: $2,079.90

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Assessor Word Find

SOURCE:

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out of the past Remembering Yesterday

5 Years Ago—2016 5 Years Ago—2016 •

•

Dan Whitman was quoted as saying “If everyone had to do the job of President (for MAAO) for a time it would be much easier to operate as an assessor because everyone would have a much better understanding of the issues we all deal with and how complex it is to do our work.”

Jackie Coulter was interviewed for becoming the new education coordinator.

10 Years Ago—2011 •

• •

Rebecca Malmquist said her heartfelt goodbyes as she finished up her last issue as Equal Eyes Managing Editor.

Corey Erickson joined the editorial committee.

Nancy Gunderson was invited to join the Editorial Committee on a snowy Friday afternoon.

20 Years Ago—2001 •

•

•

•

Bill Peterson was MAAO President, Robert Wagner was seated as First VP. Bruce Giddings took the Lake County Assessor’s position.

Jack Pasternacki was promoted to Bloomington City Assessor.

Nancy Wojcik took over for Stephen Baker as the Brooklyn Center City Assessor.

•

•

•

• •

Don Monk retired from Hennepin county after 19 years.

Stephanie Nyhus was promoted to Appraiser status.

U.S. was in fourth month of a budget crisis.

Steven Sinell received his AMA designation and his SAMA designation.

Gale Zimmerman was hired as an Ag Appraiser for Morrison County.

October 31 to November 3 Halloween blizzard. Over 28 inches at MSP, nearly 37 inches at Duluth. Nasty windchill conditions, deep snow drifts were harsh on wildlife. Many roads were closed for days. Perhaps one of the largest and longest lasting blizzards in state history.

Median household income was $30,126.

A cease fire brought an end to the Persian Gulf War.

20 Years Ago—2001

35 Years Ago - 1986

35 Years Ago - 1986 •

•

25 Years Ago – 1996 •

•

•

•

Steve Behrenbrinker joined the State Board of Assessors.

The Tax Reform Act of 1986 was signed into effect by President Ronald Reagan the changes affected every business and family in America.

First federal holiday to recognize Martin Luther King.

40 Years Ago – 1981 •

30 Years Ago – 1991

15 Years Ago—2006

Amber Swenson-Hill, SAMA Polk County Editorial Committee Member

Heavy snow with near blizzard conditions with over a foot of wet snow caused the inflated fabric of the Metrodome to collapse and rip.

50 Years Ago – 1971 •

The Walker Art Center in Minneapolis, designed by Edward Larrabee Barnes, was completed.

55 Years Ago – 1966 •

In St. Paul Richard M Schulze and business partner James Wheeler opened Sound of Music, an audio specialty store.

The business was renamed Best Buy in 1983.

65 Years Ago – 1956 •

A new shopping mall in Edina, the first enclosed shopping mall, was designed as a center of community by Victor Green.

•

•

Dan Whitman was quoted as saying “If everyone had to do the job of President (for MAAO) for a time it would be much easier to operate as an assessor because everyone would have a much better understanding of the issues we all deal with and how complex it is to do our work.”

Jackie Coulter was interviewed for becoming the new education coordinator.

10 Years Ago—2011 •

• •

Rebecca Malmquist said her heartfelt goodbyes as she finished up her last issue as Equal Eyes Managing Editor.

Corey Erickson joined the editorial committee.

Nancy Gunderson was invited to join the Editorial Committee on a snowy Friday afternoon.

•

•

•

Bill Peterson was MAAO President, Robert Wagner was seated as First VP. Bruce Giddings took the Lake County Assessor’s position.

•

•

25 Years Ago – 1996 •

•

•

Don Monk retired from Hennepin county after 19 years.

Stephanie Nyhus was promoted to Appraiser status.

U.S. was in fourth month of a budget crisis.

•

•

•

•

• •

Steven Sinell received his AMA designation and his SAMA designation.

Gale Zimmerman was hired as an Ag Appraiser for Morrison County.

October 31 to November 3 Halloween blizzard. Over 28 inches at MSP, nearly 37 inches at Duluth. Nasty windchill conditions, deep snow drifts were harsh on wildlife. Many roads were closed for days. Perhaps one of the largest and longest lasting blizzards in state history.

Median household income was $30,126.

A cease fire brought an end to the Persian Gulf War.

Steve Behrenbrinker joined the State Board of Assessors.

The Tax Reform Act of 1986 was signed into effect by President Ronald Reagan the changes affected every business and family in America.

First federal holiday to recognize Martin Luther King.

40 Years Ago – 1981 •

30 Years Ago – 1991

15 Years Ago—2006 •

Jack Pasternacki was promoted to Bloomington City Assessor.

Nancy Wojcik took over for Stephen Baker as the Brooklyn Center City Assessor.

Heavy snow with near blizzard conditions with over a foot of wet snow caused the inflated fabric of the Metrodome to collapse and rip.

50 Years Ago – 1971 •

The Walker Art Center in Minneapolis, designed by Edward Larrabee Barnes, was completed.

55 Years Ago – 1966 •

In St. Paul Richard M Schulze and business partner James Wheeler opened Sound of Music, an audio specialty store.

The business was renamed Best Buy in 1983.

65 Years Ago – 1956 •

A new shopping mall in Edina, the first enclosed shopping mall, was designed as a center of community by Victor Green.

Winter 2021 / Equal Eyes

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transitions Best Wishes Upon Retirement

Nancy Gunderson, SAMA, Clay County Editorial Committee Member

From Region 4…

Richard Champagne retired as an appraiser from Cass County on September 11, 2020. Happy Retirement Richard.

From Region 5…

Redwood County Assessor, Kathy Hillmer retired July 2020 In March 1997, Kathy Hillmer began working in the Redwood County Assessor’s office, initially hired as the deputy assessor. Six years later, in April 2003, Kathy was appointed to serve as the county assessor – a role she continued to serve until July 31st.

Happy Retirement Kathy.

Insert pic here of Kathy

Lincoln County Assessor, Bruce Nielsen is retiring December 31, 2020.

Happy Retirement Bruce.

From Region 9…

Washington County Residential Supervisor, Al LaBine retired on December 4th Happy Retirement Al.

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Winter 2021 / Equal Eyes

transitions Best Wishes Upon Retirement

Nancy Gunderson, SAMA, Clay County Editorial Committee Member

Patrick Todd, City of Minneapolis

I'M RETIRING!

From eating the right food to the perfect exercise routine, find the best path to a

healthier and happier you.

After 30 years with the city of Minneapolis, I'm retiring in January. I'm looking forward to what's next, and I'll miss all my friends and colleagues in MAAO! ~Patrick

Stay in touch: patricktoddmn@gmail.com

Happy Retirement Patrick.

Winter 2021 / Equal Eyes

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TAX COURT lowe’s Maple Grove vs. hennepin county

Jake Pidde, SAMA, Stearns County Editorial Committee Member

STATE OF MINNESOTA

TAX COURT

COUNTY OF HENNEPIN

REGULAR DIVISION

ORDER

Lowe’s Home Centers, LLC, (Maple Grove), Petitioner,

File Nos: 27-CV-16-4307 27-CV-17-4539

vs.

Filed: November 13, 2020

County of Hennepin, Respondent.

______________________________________________________________________________ This matter came before the Honorable Wendy S. Tien, Judge of the Minnesota Tax Court, for hearing on petitioner’s motion to allow limited additional direct testimony of its expert witness, Gary Battuello, at trial.

Thomas R. Wilhelmy, Christopher A. Stafford, and Gauri S. Samant, Fredrickson & Byron, P.A., represent petitioner Lowe’s Home Centers, LLC (Maple Grove).

Shannon M. Harmon, Assistant County Attorney, represents respondent Hennepin County.

Based upon all the files, records, and proceedings, the Court now makes the following: ORDER 1. Petitioner’s motion is denied.

At trial, Lowe’s may seek leave to present Mr.

Battuello’s testimony in rebuttal, to the extent Mr. Mitchell testifies concerning such matters, either during cross-examination by Lowe’s, or on redirect examination by the 28

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TAX COURT, continued

2. Within 20 days of the date of this Order, the parties shall contact the court for a pretrial conference to discuss trial date certain scheduling.

IT IS SO ORDERED.

BY THE COURT:

Wendy S. Tien, Judge MINNESOTA TAX COURT DATED: November 13, 2020 MEMORANDUM I.

BACKGROUND On March 31, 2016 and April 5, 2017, Lowe’s Home Centers, LLC (“Lowes”), filed

property tax petitions in this Court with respect to property located at 11201 Fountains Drive North, in Maple Grove, for the 2016 and 2017 tax payable years. 1 This court entered scheduling orders in both cases. 2 Both scheduling orders provide the written report of any expert retained in this case who is expected to testify at trial shall serve as the authoring expert’s direct testimony. 3 Following the parties’ stipulated motion to consolidate these cases, this court ordered the cases consolidated and included an amended scheduling order, adopting the scheduling order in 1

Pet. No. 27-CV-16-4307 (filed Mar. 31, 2016) (the “Pay-2016 Case”); Pet. No. 27-CV17-4539 (filed Apr. 5, 2017) (the “Pay-2017 Case”).

2

Sched. Order, Pay-2016 Case (filed Feb. 6, 2017); Sched. Order, Pay-2017 Case (filed Apr. 9, 2018). Other than the dates, these scheduling orders are substantively identical and will be referenced as one Scheduling Order.

3

Sched. Order ¶ 7.

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TAX COURT, continued

the Pay-2017 Case with slight modifications. 4 The consolidation order requires the parties to serve (but not file) review appraisals not later than March 4, 2019 5 and establishes a new trial ready date, 6 which has been continued.

The parties exchanged expert reports and subsequently filed pretrial submissions in accordance with the consolidation order. 7 These included: (1) two primary appraisals of the subject property by Lowes (one for each tax year), each by Michael MaRous; (2) two primary appraisals of the subject property by the County (one for each tax year), each by Timothy Mitchell; (3) two review appraisals by Lowes’ review appraiser of the County’s primary appraisals (for the respective tax years), each by Gary Battuello; and (4) a review appraisal by the County’s review appraiser of Lowe’s primary Pay-2017 appraisal, by Mark Kenney.

On March 4, 2019, Lowes moved for leave to conduct additional direct oral testimony of its review appraiser at trial. 8 Lowes contends that Mr. Battuello’s written review appraisal “will not and cannot review and respond to all of” the appraisal testimony of Mr. Mitchell. 9 Specifically, Lowes represents that Mr. Battuello should be able to address Mr. Mitchell’s written appraisal in an expanded fashion as it relates to the use of sales of leased-fee properties as comparables in the sales comparison approach; 10 deed restrictions as they relate to the value

4

Order Granting Parties’ Stip. To Consol. & To Amend Sched. Order (filed July 3, 2018) (the “Consolidation Order”).

5

Consol. Order ¶ 4.

6

Consol. Order ¶ 6.

7

The parties filed pretrial submissions between March 22 and April 1, 2019.

8

Not. Mot. & Mot. Leave Lim. Dir. Test. Of Gary Battuello (filed Mar. 4, 2019).

9

Pet’r’s Mem. Supp. Mot. Leave Lim. Dir. Test. Of Gary Battuello 2 (filed Mar. 4,

10

Pet’r’s Mem. 3-4; see Aff. Jennifer R. Pusch (Mar. 4, 2019) ¶¶ 4-5, Ex. A, at 6, Ex. B,

2019). at 6.

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Winter 2021 / Equal Eyes

TAX COURT, continued

of big box properties; 11 and “the nuances of the so-called ‘dark store theory.’ ” 12 Lowes contends this additional direct testimony by its review appraiser is warranted because Mr. Mitchell, in his principal appraisal for the County, “appends to his report only the IAAO paper titled ‘Commercial Big-Box Retail: A Guide to Market-Based Valuation’ ” and only cites to the paper. 13 Lowes expresses concern that, if the County does not cross-examine Mr. Battuello, or undertakes only a limited cross-examination, Mr. Battuello “will never have an opportunity to fully respond to Mr. Mitchell’s written appraisal.” 14 (Emphasis added.)

The County responds that Lowes may seek to offer Mr. Battuello’s rebuttal testimony in response to Mr. Mitchell’s oral testimony at trial (whether in response to cross-examination or redirect), but not to explain matters already addressed in his written testimony. 15 A telephonic hearing on this motion was held on August 27, 2020.

II.

GOVERNING LAW Minnesota Statutes, section 271.06, subdivision 7 (2018), provides that, in general, the

Minnesota Rules of Civil Procedure and the Minnesota Rules of Evidence (collectively, the “Rules”) govern the procedures in the tax court, where practicable.

With respect to discovery, Rule 26.05 provides: A party is under a duty seasonably to amend a prior response to an interrogatory, request for production, or request for admission if the party learns that the response is in some material respect incomplete or incorrect and if the additional or corrective information has not otherwise been made known to the other parties during the discovery process or in writing.

11

Pet’r’s Mem. 4; see Pusch Aff. ¶¶ 7-8, Exs. D & E.

12

Pet’r’s Mem. 4.

13

Pet’r’s Mem. 3-4.

14

Pet’r’s Mem. 2.

15

Resp’t’s Resp. to Pet’r’s Mot. Add’l Dir. Test. Of Review Appraiser Gary Battuello 2-3 (filed Apr. 29, 2019).

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TAX COURT, continued

Minn. R. Civ. P. 26.05. This responsibility extends to any report of the expert. Id.; Minn. R. Civ. P. 26.01(b)(5).

Regarding the presentation of evidence at trial, Rule 611(a) authorizes the court to control its mode and order: The court shall exercise reasonable control over the mode and order of interrogating witnesses and presenting evidence so as to (1) make the interrogation and presentation effective for the ascertainment of the truth, (2) avoid needless consumption of time, and (3) protect witnesses from harassment or undue embarrassment.

Minn. R. Evid. 611(a).

Consistent with Rule 611(a), this court regularly employs scheduling orders that require the direct testimony of expert witnesses to be reduced to writing, absent leave of court. Minn. R. Civ. P. 16.03(d) (authorizing the court to consider and take appropriate action with respect to “limitations or restrictions on the use of testimony under Rule 702 of the Minnesota Rules of Evidence”); Minn. Rule Civ. P. 16.02(f) (authorizing the court to enter a scheduling order for trial); Minn. Rule Civ. P. 26.01(b)(2); see, e.g., 1300 Nicollet, L.L.C. v. Cty. of Hennepin, No. 27-CV-17-06284 et al., 2019 WL 5495872, at *2 (Minn. T.C. Oct. 16, 2019); N. Nat. Gas Co. v.

Comm’r of Revenue, Nos. 8864-R & 8976-R, 2019 WL 2479445, at *8 n.29 (Minn. T.C. June 4, 2019); Signature Flight Support Corp. v. Cty. of Hennepin, Nos. 27-CV-13-08346 & 27-CV-1406368, 2017 WL 11104166, at *1 (Minn. T.C. Feb. 16, 2017) (all describing this court’s use of scheduling order requiring direct testimony of experts to be limited to written expert report).

Appraisers in Minnesota are required to act according to the standards of professional appraisal practice. 82B.195, subd. 1 (2018). Such standards are set forth in USPAP, Minn. Stat. §§ 82B.021, subd. 26 (2018), which “reflects the current standards of the appraisal profession.”

Mandel v. Comm’r of Revenue, No. 8787-R, 2016 WL 903301, at *5 (Minn. T.C. Mar. 8, 2016).

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Winter 2021 / Equal Eyes

TAX COURT, continued

The professional standards applicable to review appraisals require such appraisal reports to state, among other things:

(1) the scope of work used to develop the appraisal review; (2) the

reviewer’s opinions and conclusions about the work under review, including the reasons for any disagreement; and (3) when the scope of work includes the reviewer’s development of an opinion of value or review opinion related to the work under review, at a minimum, summarize any additional information relied on and the reasoning for the reviewer’s opinion of value or review opinion related to the work under review. The Appraisal Foundation, Uniform Standards of Professional Appraisal Practice (“USPAP”) Standards Rule 4-2(g), (h), (i)(iii) (2018-19 ed.).

III.

ANALYSIS Lowes seeks leave for additional oral direct testimony of its review appraiser at trial to

expand on matters not contained in Mr. Battuello’s written review appraisal. 16 The motion is denied.

Lowes contends Mr. Battuello will not be able to respond adequately to the written appraisals of Mr. Mitchell (i.e., Mr. Mitchell’s direct testimony), particularly in the event the County does not cross-examine Mr. Battuello at trial. 17 The USPAP standards governing review appraisals, however, require such appraisals to disclose the scope of their work to intended users by providing “[s]ufficient information” by “disclosure of research and analyses performed…”

USPAP Standards Rule 4.2(g), cmt. Moreover, “[t]he report must provide sufficient information to enable the client and intended users to understand the rationale for the reviewer’s opinions and conclusions.” USPAP Standards Rule 4.2(h), cmt. The Scheduling Order incorporates these requirements, and provides that expert reports must include “(1) a complete statement of all opinions the witness will express and the basis and reasons for them; [and] (2) the facts or data 16

Pet’r’s Mem. 2-3.

17

Pet’r’s Mem. 2.

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TAX COURT, continued

considered by the witness in forming the opinions . . . .” 18 Minn. R. Civ. P. 26.01(b)(2).

Accordingly, Mr. Battuello’s written reports should have contained all the bases and reasons for his opinion concerning the use of sales of leased-fee properties and the effect of deed restrictions on value, as well as the sources on which he relied. Lowes may not supplement Mr. Battuello’s written reports with additional direct testimony at trial to overcome deficiencies in his written review appraisals so the court can “understand the rationale for [his] opinions and conclusions.”

USPAP Standards Rule 4.2(h), cmt.

Furthermore, Rule 26.05 requires parties seasonably to amend reports of expert witnesses “if the party learns that the response is in some material respect incomplete or incorrect and if the additional or corrective information has not otherwise been made known to the other parties during the discovery process or in writing.” Minn. R. Civ. P. 26.05. To the extent Lowes seeks an opportunity to elicit more detailed direct testimony from Mr. Battuello regarding the premises of his review appraisals, on account of the review appraisals being incomplete or incorrect, Lowes was obliged to amend the review appraisals when the need for Mr. Battuello to supplement his appraisals became apparent, and not to delay such amendments until the time of trial. See, e.g., Macy’s Retail Holding, Inc. v. Cty. of Hennepin, No. 27-CV-13-6683, 27-CV-146579, 2017 WL 2656305, at *4 (Minn. T.C. June 19, 2017) (noting that “[n]othing in rule 26.05 … limits the duty to … some prescribed period”). This obligation is not satisfied by requesting leave for additional direct testimony at trial, as the purpose of discovery is to avoid unfair surprise. See Gale v. Cty. of Hennepin, 609 N.W.2d 887, 891 (Minn. 2000); Thorson v.

Zollinger Dental, P.A., 728 N.W.2d 261, 266 (Minn. App. 2007).

18

Sched. Order. ¶ 7.

7

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Winter 2021 / Equal Eyes

TAX COURT, continued

To the extent Lowes anticipates the need to respond to Mr. Mitchell’s trial testimony regarding the use of sales of leased-fee properties and the effect of deed restrictions on value, however, the situation is different. At the time of trial, if applicable, Lowes may seek leave to present the rebuttal testimony of Mr. Battuello pertaining to matters elicited on its cross-examination of Mr. Mitchell, or during the County’s redirect examination of Mr. Mitchell.

W.S.T.

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Vanguard Appraisals, Inc. was formed in 1968 as a Mass Appraisal Company. CAMAvisionŠ, our software product, is flexible, efficient, and accurate to be the system of choice by assessors. It is installed in 25 Minnesota jurisdictions and over 325 jurisdictions across the Midwest.

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Winter 2021 / Equal Eyes

Official Publication of the Minnesota Association of Assessing Officers mnmaao.org

Winter 2021 / Equal Eyes

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