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Civil

 

Taxes

Property Tax

This appeal from the Tax Court concerned the valuation of a medical office building located in Burnsville. Following a trial, the Tax Court concluded that the value of the subject property for 2021 property taxes was $9,300,000, which is higher than the county’s initial assessed value. The taxpayer argued that the Tax Court erred by using market rent, rather than effective net rent, to calculate the value of the subject property under the income capitalization approach to valuation, even though the taxpayer presented no trial evidence of excessive tenant improvement allowances or other atypical tenant rent concessions. Additionally, the taxpayer argued that the Tax Court clearly erred by rejecting an occupancy adjustment that its appraisal expert relied on in valuing the subject property.

The Supreme Court held that (1) the Tax Court did not err by using market rent rather than effective net rent to calculate the subject property’s potential gross income under the income capitalization approach to valuation because the taxpayer’s tenant improvement allowances and rent concessions were typical of the market; and (2) the Tax Court did not clearly err by rejecting the taxpayer’s proposed occupancy adjustment under the sales comparison approach to valuation. Affirmed.

A24-0847 Burnsville Med. Bldg., LLC v. County of Dakota (Tax Court)

 

 

 

Water Law

Drainage Ditches

At issue here was a dispute over the application of the statutes that govern improvement projects for drainage ditches. In particular, whether the Red Lake Watershed District had the authority to conduct proceedings to improve a drainage ditch located geographically within the District but under the drainage authority of the Polk County Board of Commissioners. After township and several landowners challenged the order of the Red Lake Watershed District establishing the improvement project, the District Court granted summary judgment in favor of the challengers, ruling that the District did not have the authority to order the improvement because the District was not the drainage authority. The Court of Appeals reversed.

The Supreme Court held that (1) the Red Lake Watershed District was authorized to conduct drainage improvement proceedings for Polk County Ditch 39—a ditch under the drainage authority of the Polk County Board of Commissioners—because, under Minn. Stat. § 103D.625 and Lenz v. Coon Creek Watershed District, 153 N.W.2d 209 (Minn. 1967), a watershed district need not first take over the ditch from the county before the watershed district conducts improvement proceedings for the ditch; and (2) the Red Lake Watershed District was authorized to conduct the proceedings without the involvement of county officials, insofar as the involvement of county officials would be inconsistent with the Watershed Law, and none of appellants’ other alleged procedural defects affected the Red Lake Watershed District’s authority to establish the improvement project over Ditch 39. Affirmed.

A22-1163 Keystone Twp. v. Red Lake Watershed Dist. (Court of Appeals)