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<br />. <br />Arden Hills Council 4 September 13, 1993 <br /> <br /> <br /> <br />DISCUSSION REGARDING IMPACT OF <br />REDUCTION IN COMMERCIAL & INDUSTRIAL <br />MARKET VALUATION ON CITY'S TAX BASE <br /> <br />City Accountant Post explained that, at the Council's request, <br />he has reviewed avai 1 abl e information as to the impact of <br />reduced commercial and industrial market valuation on the <br />City's tax base. <br /> <br />Post reported that several commercial and industrial <br />properties have petitioned for market valuation reductions and <br />already received reductions and/or refunds and/or abatements. <br />He added that there is a trend amongst commercial and <br />industrial property owners to seek tax relief by petitioning <br />for reductions in market valuations, <br /> <br />Post further explained that approximately 5% of Arden Hills' <br />total tax base has already been eliminated through reductions <br />in commercial and industrial market valuations. The effect of <br />that action is that more tax burden is shifted to residential <br />property owners. He indicated that several commercial and . <br />industrial property owners are reportedly currently involved <br />in some stage of the petition process. It appears the number <br />of petitions in process has significantly increased from last <br />year, therefore, there is a great possibil i ty that further <br />market valuation reductions will occur. As information <br />becomes available, the Council will be informed of new <br />developments. <br /> <br />Post reported the apparent rationale in successful market <br />valuation reductions for corporate campus-type properties is <br />two-fold. First, the assumption that it would be unlikely <br />that the complex could be resold to another single corporate <br />occupant; and secondl y, the retrofit costs for mul tipl e <br />tenants coupled with the depressed commercial rental market <br />all combine to drive down valuations for these types of <br />properties, <br /> <br />Counci Imember Probst commented that apparent I y the Ci ty has no <br />voice in the market va I ua ti on reducti on process. Pos t <br />confirmed that the City is not involved in the process and <br />most market valuation reductions are settled out of court. <br /> <br />Council member Malone commented that the Council has been <br />watching this trend for several months, and the effect of <br />reduced commercial and industrial valuations is beginning to . <br />have a drastic impact on the City. He emphasized that when <br />there is a significant market valuation reduction on a <br />commercial or industrial property, the ensuing loss in tax <br />revenue is substantial, and since there is no other means to <br />