Property valuations of retail spaces in Princeton’s Riverside Mall are likely to decrease.
That’s because the Princeton City Council was convinced by a Princeton real estate agent that the assessed value of the properties far exceed the actual value of the properties.
The council slashed the property value by 25 percent over its original 2014 assessed value, tacking on an additional cut of 10 percent to an approximately 15 percent reduction already imposed by the county’s assessor’s office.
The action came at the April 10 meeting of the Board of Appeals and Equalization, which is comprised of the members of the Princeton City Council. The meeting was part of the April 10 City Council work session.
In the Riverside Mall, retail spaces are owned by individual investors in a “condominium” system as opposed to one investor owning the entire mall. At issue was a retail space owned by the son of Princeton real estate agent Steve Cartwright, which was last occupied by a dialysis center.
The property in question was assessed at $260,000, Cartwright said. It was put on the market at $220,000.
But there’s a problem with commercial property in downtown Princeton, Cartwright said. There is a depressed market for commercial properties and no recent sales to use for comparison when setting property values.
“Dealing with commercial properties in downtown Princeton is a son-of-a-gun,” Cartwright said.
Case-in-point: Cartwright pointed out that the city’s own former downtown fire station, valued by the county at $434,900, was put on the market recently by the city at $350,000. That’s about $85,000 below its assessed valued.
Over the past year that the dialysis center property has been on the market, there has been little to no interest in the property. The asking price on the property has been slowly reduced until recently, at $124,900, there has been some interest in the property, Cartwright said.
If the property sells, there will be some injustice next year come tax time, Cartwright argued.
Originally assessed at $260,000, the Mille Lacs County Assessor’s Office reduced the assessed value by approximately 15 percent this year, to $223,500.
That’s not enough, Cartwright argued. How can one sell a property at $124,900 and tell the new owner they will have to pay annual taxes as if the property is worth nearly $225,000, Cartwright asked council members.
“$225,000 is way out of line,” Cartwright said as he looked at representatives of the county assessor’s office.
Cartwright pointed out that if the property sells, his appeal to the Board of Appeals and Equalization will not benefit himself or his son, the property owner, because assessment affects taxes for 2015, when the property, in theory, would be in the hands of new owners.
“I’m just trying to help the new people out,” he said.
But by the end of the meeting, Cartwight not only helped out any potential new owner, but each and every owner of Riverside Mall properties.
“You’re driving people out of town when you’re supposed to be bringing them in,” Cartwright said.
Commercial property in downtown Princeton is suffering, and you, as the council, have an opportunity to have common sense and say that’s wrong,” Cartwright said.
And the City Council did just that.
Councilmember Thom Walker said he was sympathetic toward the situation regarding the Cartwright mall condo.
“But I don’t know how to handle it. If we change yours, I think we should change them all,” Walker said.
“You should,” Cartwright said.
And that’s exactly what the council did.
“To me, more than a 15 percent decrease is warranted here,” Walker said, referencing the amount the county assessor has already decreased the property valuation.
“I don’t know what the number is. Is 25 or 30 percent fair?” Walker asked his fellow councilors.
Walker then made a motion to take 25 percent off the original assessed value for all the properties in Riverside Mall, bringing the assessed value of the Cartwright commercial property to $195,000.
The measure passed on a 3-1 vote, with Council Member Vicki Hallin voting against the measure. Councilman Dick Dobson was absent.
“It’s not everything we wanted,” Cartwright said.
“You did the right thing. It just wasn’t enough,” he told the council.
Walker responded: “I agree it might not be enough. But we don’t want to blow up the house all at once.”