Chambers Self-Storage Oakdale, LLC v. County of Washington, 82-CV-17-1685

CourtTax Court of Minnesota
Writing for the CourtJane N. Bowman, Judge
PartiesChambers Self-Storage Oakdale, LLC, Petitioner, v. County of Washington, Respondent.
Decision Date25 January 2021
Docket Number82-CV-18-2123,82-CV-17-1685

Chambers Self-Storage Oakdale, LLC, Petitioner,
v.

County of Washington, Respondent.

Nos. 82-CV-17-1685, 82-CV-18-2123

Tax Court of Minnesota, Regular Division, Washington County

January 25, 2021


These matters came on for trial before the Honorable Jane N. Bowman, Judge of the Minnesota Tax Court.

Diana Longrie, Attorney at Law, represents petitioner Chambers Self-Storage Oakdale, LLC.

James Zuleger, Assistant County Attorney, represents respondent Washington County.

FINDINGS OF FACT, CONCLUSIONS OF LAW, AND ORDER FOR JUDGMENT

These consolidated property tax cases concern Chambers Self-Storage Oakdale, LLC's two statutory claims as of January 2, 2016 and January 2, 2017: (1) valuation; and (2) unequal assessment. The assessed value of the subject property understates its market value as of each valuation date. Additionally, the subject property was not unequally assessed.

The court, having heard and considered the evidence adduced at trial and the arguments of counsel, and upon all of the files, records, and proceedings herein, now makes the following:

FINDINGS OF FACT

1. Petitioner Chambers Self-Storage Oakdale, LLC, has sufficient interest in the property to maintain these petitions; all statutory and jurisdictional requirements have been fulfilled; and the court has jurisdiction over the subject matter of the action and the parties thereto.

2. The subject property, owned by Chambers Self-Storage Oakdale, LLC, and operated as Stephen's Self Storage, consists of two PIDs (06.029.21.23.0037 and 06.029.21.23.0040) located in Oakdale, Washington County, Minnesota, with Hadley Avenue running between the two parcels.

3. The subject property, consisting of approximately 160, 328 square feet of land area, is classified as Commercial and/or Industrial for property tax purposes. PID 06.029.21.23.0037 consists of approximately 103, 736 square feet; PID 06.029.21.23.0040 consists of approximately 56, 592 square feet. Neither parcel is exempt from taxation.

4. The subject property consists of seven, one-level buildings, none of which are temperature or climate controlled. The subject property has 321 self-storage units with 47, 785 rental square feet.

5. The improvements were developed in 1988 with such amenities as surveillance cameras, individual unit locks, controlled entry, and on-site management. Stephen's Self Storage is of a Class C+ investment quality.

6. The highest and best use of the subject property as improved is as a self-storage development.

7. Washington County collectively assessed the subject property at $2, 250, 600 as of January 2, 2016. PID 06.029.21.23.0037 was valued at $1, 462, 900 and PID 06.029.21.23.0040 was valued at $787, 700.

8. Washington County collectively assessed the subject property at $2, 724, 300 as of January 2, 2017. PID 06.029.21.23.0037 was valued at $1, 770, 800 and PID 06.029.21.23.0040 was valued at $953, 500.

9. At trial, the County's expert concluded the market value of the subject property was $2, 770, 000 as of January 2, 2016, and $2, 860, 000 as of January 2, 2017.

10. The market value of the subject property as of January 2, 2016, was $2, 742, 000.

11. The market value of the subject property as of January 2, 2017, was $2, 814, 000.

12. The 2016 Assessment Sales Ratio Study Sales Analysis for the Minnesota Tax Court for Washington County found the median ratio for Commercial/Industrial properties was 99.6 as adjusted to January 2, 2016.

13. The 2017 Assessment Sales Ratio Study Sales Analysis for the Minnesota Tax Court for Washington County found the median ratio for Commercial/Industrial properties was 96.1 as adjusted to January 2, 2017.

CONCLUSIONS OF LAW

1. The prima facie validity of the assessment as of each valuation date was overcome with Washington County's waiver.

2. The assessed value of the subject property as of January 2, 2016, understates its market value. 3. The assessed value of the subject property as of January 2, 2017, understates its market value.

4. Petitioner failed to sustain its burden to prove the subject property was unequally assessed, relative to other comparable properties, as of January 2, 2016, or January 2, 2017.

5. The 2016 and 2017 Assessment Sales Ratio Studies Sales Analyses for the Minnesota Tax Court for Washington County are prima facie valid.

6. Petitioner failed to overcome the prima facie validity of the 2016 and 2017 Assessment Sales Ratio Studies Sales Analyses for the Minnesota Tax Court as reliable evidence of the level of assessment in Washington County.

7. Under the 2016 and 2017 Department of Revenue Assessment Sales Ratio Studies Sales Analyses for the Minnesota Tax Court for Washington County, no adjustment for unequal assessment is warranted.

ORDER FOR JUDGMENT

1. The assessed value of the subject property as of January 2, 2016, shall be increased from $2, 250, 600 to $2, 742, 000.

2. The assessed value of the subject property as of January 2, 2017, shall be increased from $2, 724, 300 to $2, 814, 000.

3. Property taxes due and payable in 2017 and 2018 shall be recomputed accordingly.

IT IS SO ORDERED. THIS IS A FINAL ORDER. ENTRY OF JUDGMENT IS STAYED FOR 30 DAYS. LET JUDGMENT BE ENTERED ACCORDINGLY.

MEMORANDUM

Jane N. Bowman, Judge

At issue in these cases, consolidated for trial, is the market value as of January 2, 2016, and January 2, 2017, of a 321-unit self-storage facility located in Oakdale, Minnesota. The assessed values of the property as of January 2, 2016, and January 2, 2017, understate its market value. Additionally, the subject property was equally assessed as of both assessment dates.

I. The Subject Property

The subject property, owned by Chambers Self-Storage Oakdale, LLC, and operated as Stephen's Self Storage, consists of two PIDs (06.029.21.23.0037 and 06.029.21.23.0040) located in Oakdale, Washington County, Minnesota, with Hadley Avenue running between the two parcels.[1] The subject property, consisting of approximately 160, 328 square feet of land area, is classified as Commercial and/or Industrial for property tax purposes.[2] PID 06.029.21.23.0037 consists of approximately 103, 736 square feet; PID 06.029.21.23.0040 consists of approximately 56, 592 square feet.[3] Neither parcel is exempt from taxation.[4]

The facility consists of seven, one-level buildings, none of which are temperature or climate controlled.[5] The parties stipulated that the subject property has 321 self-storage units with 47, 785 rental square feet.[6] The improvements were developed in 1988 with such amenities as surveillance cameras, individual unit locks, controlled entry, and on-site management.[7] Stephen's Self Storage is of a Class C+ investment quality.[8] The subject property does not contain any other specialty storage, i.e., RV storage, but does offer U-Haul truck rentals.[9]

II. Procedural History

Chambers timely filed a property tax petition contesting the January 2, 2016 assessment.[10] Chambers alleged its property was both overvalued and statutorily unequally assessed.[11]Chambers also timely filed a property tax petition disputing the January 2, 2017 assessment, again claiming both overvaluation and statutory unequal assessment.[12]

Prior to trial, Chambers brought a motion: (1) for withdrawal of certain deemed admissions; (2) to consolidate three petitions; (3) to compel Washington County to fully respond to petitioner's discovery; and (4) for leave to amend its petitions to include constitutional unequal assessment claims.[13] After considering the arguments of both parties, this court: (1) granted Chambers' motion to withdraw certain deemed admissions; (2) consolidated the above-captioned petitions (but not inclusive of a third petition); (3) denied Chambers' request to compel discovery; and (4) denied Chambers' request to amend its petitions to include constitutional unequal assessment claims. Chambers Self-Storage Oakdale, LLC v. Cty. of Washington, No. 82-CV-17-1685 et al., 2020 WL 4459046, at *1 (Minn. T. C. July 29, 2020). This court also ordered that trial commence on September 15, 2020. Id. at *1.

Chambers next brought a motion to continue trial pending the outcome of a petition for review to the Minnesota Supreme Court in a separate and unrelated matter.[14] Chambers argued the outcome of that case might impact its previously-denied motion to amend its petitions.[15] This court denied Chambers' motion, holding the outcome in any supreme court decision on the other case would "have no bearing on this court's conclusion that justice did not require amendment on a late-filed motion to amend where Chambers could not identify any additional remedy." Chambers Self-Storage Oakdale, LLC v. Cty. of Washington, Nos. 82-CV-17-1685 & 82-CV-18-2123, 2020 WL 5520639, at *2 (Minn. T.C. Sept. 10, 2020).

A socially-distanced trial was held September 15, 2020, at the Washington County Courthouse. At the outset, Chambers noted it attempted to subpoena a supervisor with the Washington County Assessor's Office, Bruce Munneke, but was unable to do so.[16] Chambers argued his testimony was necessary as he could testify to the Office's mass appraisal process.[17] This court treated Chambers' subpoena issue as a motion to order service on Mr. Munneke, or a motion to order Mr. Munneke to appear at trial.[18] Washington County opposed Chambers' request to order service or an appearance, arguing Mr. Munneke's testimony would not be relevant, and in any event, this court could not compel appearance of a witness without a validly served subpoena.[19] In denying Chambers' motions, this court agreed that it could not compel appearance of a witness without a validly served subpoena, and Mr. Munneke's testimony-as described by Chambers-was not relevant to its statutory unequal assessment claims.[20]

The parties filed post-trial briefs and post-trial responsive briefs, [21] and the...

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