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May 14, 2014 <br />Location: Pbrama >H:Drive >15153 >FindingsReport <br />FINDINGS REPORT: LAND VALUES <br />ISSUE DESCRIPTION <br />A portion of OMCStudy Group members indicated development of the Subject Property for a data <br />center user will result in decreased property values for surrounding property owners. In many cases, a <br />10 -15% minimum reduction in property values was specified by OMCStudy Group members (based on <br />personal conversations with realtors). <br />In conjunction to this discussion, a pending lawsuit in Ohio relating to a CitiGroup data center was <br />identified as an example of why the City should not be considering a center development on the Subject <br />Property. <br />ANALYTICS (click here for supplemental information, page 5) <br />City staff had a chance to review this concern with the City Attorney (Ratwik, Rosak & Maloney P.A.) a <br />Residential Appraiser (anonymous), a Commercial Broker (anonymous), the City's real estate broker <br />(CBRE) the Anoka County Assessor and the League of Minnesota Cities (LMC). Below is a list of <br />summarized comments. <br />A. This accusation is very subjective and very challenging to quantify. A large number of <br />variables effect the value of property; and, they change over time; and, they change based <br />on perspective. Brokers /experts the City contacted were unable to make a 'firm' quantified <br />opinion related to this acquisition. <br />B. A substantial quantity of case law exists related to this accusation. In general, Courts have <br />consistently ruled against Cities that have made land use regulation decisions based solely <br />on this accusation. Most case law indicates this accusation is subjective, unclear and lacks <br />legal basis. This accusation likely cannot legally standalone —there must be a cause of <br />action (for example, spot zoning). <br />C. Understanding what base comparison surrounding property owners are utilizing to <br />determine perceived changes in value is important. Examples of valuation comparisons are <br />listed below with general comments. <br />COMPARING "X" USE OF SUBJECT PROPERTY TO "Y" FUTURE USE <br />In this case, the future use of the Subject Property is a potential data center development. A <br />difference in opinion exists between City Staff and several OMCStudy Group members on <br />what the base use /existing comparison of Subject Property value should be (i.e. the "X" use). <br />X.1 Large Open Space /Minor City Use <br />Subject Property was not guided for a large public open space or a park. Based on <br />information the City has available, this is an insufficient and irrelevant comparison <br />X.2 Single Family Residential <br />Subject Property was not guided for said use. Based on information the City has available, <br />this comparison subjective, arbitrary and not most relevant. This specific base comparison <br />has been commonly utilized by residents; and in many cases, is a major reason residents <br />believe a reduction in surrounding property values will occur. <br />OMC Study Group, Findings Report (DRAFT) Page 35 of 42 <br />