Mall owners appeal appraisalPublished 11:06am Tuesday, October 15, 2013
By Heather Rule
The owners of WestRidge Mall filed three tax appeals in Minnesota Tax Court for 2010, 2011 and 2012. They don’t agree with the $4 million value that Otter Tail County placed on the property, according to their attorney, Chad Felstul.
The mall owners think it’s worth $1.8 million, while Otter Tail County sees it at $4 million. A hearing is scheduled Nov. 5 in Fergus Falls so a judge can hear the three pending tax years.
According to the appraisal report done by Joseph Mako Appraisals, of Apple Valley, the value of the approximately 27.83 acres of commercial land is $4,050,000 for Jan. 2, 2009, 2010 and 2011. The enclosed mall space, located at 2001 West Lincoln Avenue, makes up 242,974 square feet.
The highest and best use of the property in the appraisal report is if the mall were vacant or torn down. The owners do not think that is an appropriate way to value the mall, Felstul said.
“I think the biggest thing is that the county doesn’t have a realistic grasp on the economies of the mall and the income that it’s producing,” Felstul said. “I think it’s a difference between a realistic viewpoint and a pie-in-the-sky viewpoint.”
Otter Tail County Assessor Doug Walvatne agreed that this case is about a difference of opinion.
“What it boils down to is the highest and best use of the property,” Walvatne said. “Our opinion is that the highest and best use of the property… is for the land to be sold. Because we feel there’s a market for that.”
But the mall owners are working with the leasing agent Goldmark Schlossman to try and get new tenants into WestRidge Mall, Felstul said.
“The owners have the intent to keep operating the mall and trying to get tenants,” he said.
The concern, however, is that the $4 million property value will continue to result in higher taxes for the mall. If the taxes continue the way they are, with the “significant increase,” the owners might not be able to operate the mall, Felstul said.
“We’re not trying to avoid paying the taxes,” he said. “The owners are trying to get the taxes down to a realistic number. They want to be treated fairly, is the bottom line. And they think they’re being overtaxed at a value that’s not realistic.”
The county thinks the property is worth what the appraiser estimated, Walvatne said. It’s the difference of opinion that’s bringing the issue to court, according to Walvatne.
“I believe each side is convinced that they’re right,” he said. “That’s what we have the court for.”
The original part of the mall was built in 1978. An addition came in 1980 when about one-third of the center was built.
The mall owners are up to date on paying taxes for the property. Taxes in 2010 were $131,138 (with two special assessments included: $9,010, $8,420), 2011 taxes were $134,516 (including $9,503 special assessment), 2012 taxes were $146,064 (including $9,503 special assessment) and 2013 taxes were $151,550.