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Duluth Businesses Clash With Tax Assessor

Evidently government bean counters in St. Louis County have taken a page out of Hennepin County assessors’ playbook. We recently noted the record number of complaints by Minneapolis property owners over the sky-high increases in their valuation for the purposes of taxation.

Property assessments in Duluth have also shot up, the Duluth News Tribune reports, provoking similar outrage.

Sandy Hoff, president of F.I. Salter Real Estate Services, has fielded many questions from distraught clients in recent days.

“My phone’s been ringing off the hook,” he said.

In many cases, he said it’s tough to square the assessed values with the actual prices downtown buildings have commanded.

The valuation of one building sold last year bears no resemblance to the price the recent buyer was willing to pay. The Board of Trade Building was purchased for $850,000, but just months later was assessed at $2.9 million for property taxes.

In fact, the county has so overpriced the market value of one of I.F. Salter’s properties that Hoff has offered to sell it to the county or city government for 50 percent of the newly assessed value. He’s not kidding either.

“We’ve been at $174,000 or so for years,” said Hoff, whose firm, F.I. Salter, owns and manages the property.

“Has that been undervalued? Yes it has. Should that value probably be closer to $300,000? Yes, it probably should. But now they have it on the rolls for $1.1 million,” he said.

But the News Tribune reporter buried the story’s lead.

The DNT building, at 424 W. First St., has been on the market for several months, at an asking price of $2.9 million for the entire property. But that listing looks like quite a bargain, to judge by the combined assessed value of the properties — nearly $3.9 million, according to St. Louis County officials. That’s one-third more money than any prospective buyer has been willing to pay so far.

County assessors appear to be making up for lost time in jacking up the supposed market value of properties as real estate heats up. But so many complaints have come in that county property valuation director, Mary Garness, may be feeling the heat.

Garness said the county’s assessment team is working to respond to property owner concerns. She noted that a batch of amended property valuation notices were to be mailed Friday in response to some of the issues already raised. People should begin to receive those revised valuations in coming days.

Assistant County assessor Terry Johnson said letters are going out to more than 125 owners of downtown commercial properties.

Yet downtown property owners warn the abrupt property tax hikes could make or break some businesses that are already facing challenges.

“They are tripling or quadrupling the assessed values on many downtown properties at a time when the downtown is seeing diminishing occupancy, struggling rents and a major construction project that’s creating disruption,” he said, referring to the ongoing reconstruction of Superior Street — a project that’s expected to take three years to complete.

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