Agenda - Council - 09/22/1981 - Laserfiche WebLink

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NAIOP LEGISLATIVE ,., .... REPORT ~,OMA BRIEFS NAIOP ON PROPOSED REAL ESTATE TAX ISSESSMENT PROCEDURES e regular monthly meeting of the Upper Midwest NAIOP Legislative Committee was held on August 19, i)81 at the Amhassador Motor Hotel. A report on a joint :cakfast mvding with officers and legislative committee embers of BOMA was given hy Bill Balsiger. The purpose of this meeting, attended by President Bill i'obin and your chairmen, was to receive a briefing from .OMA on their proposed real estate property tax ssessment procedures and review the bill drafted for introduction to the 1982 legislature. I. OMA proposes that the principal method to be used by [ate tax assessors would be the economic method of aluation. Under present law, an assessor may use the cost, replacement value and economic value approaches lheparately or collectively. The proposed legislation would bligate the a~sessor to look first at the economic value of e building. I'his would require owners and operators of commercial buildings to report a net income stream to the luSSessor. The net income stream would then be capitalized t a rate to be determined by the assessor. (BOMA does not ggest that the legislature attempt to legislate the cap rate.) This position is supported by some, but not all, of BOMA and is also supported by the City of rolls, according to Gordon Moe, City Assessor, who in attendance. NAIOP Legislative Committee members raised several Ioncerns: How will the cap rate be determined? What roblems will arise due to the relative unfamiliarity of this method with many of the state's assessors? Is the of a building the major determination of its market value, i.e., should the owner of an old, renovated building be penalized for managing to make more profit than the operator of a new modern structure? Would this new procedure simply open up more inequities I [and provide more reasons for disputes, lawsuits and subsequent legal expenses? We need membership input so that the Legislative C6~/nit~ee'can respond to BOMA's comments. Do you ifavor the use of the economic approach of valuations for the assessment of buildings for property tax purposes? Please advise members of the Legislative Committee who will report the responses received at our September meeting. PROPERTY TAXES It was agreed by all attending the BOMA meeting that reform is needed in property taxes to commercial and industrial property. Presently, the homestead credits for residential properties and the substantial credits given to agricultural properties are all passed on to the industrial and commercial property taxpayers. NAIOP gave its support to BOMA for any cooperative effort that would devise a new, more equitable property tax formula. INDUSTRIAL REVENUE BONDS & TAX INCREMENT FINANCING These issues were vigorously debated in the 1981 legislature and the appropriate tax committees. Although no substantial changes were made in the state laws affecting Industrial Revenue Bonds or Tax Increment Districts, it is anticipated these issues wil] be raised again in the 1982 legislature. We will instruct Larkin, H offman, Daly & Lindgren to actively monitor these issues as they are brought up in committee. MINNESOTA BUSINESS CLIMATE We discussed again the concern that we as major developers of industrial and commercial buildings have regarding the continuing deterioration of the Minnesota business climate. This is reflected in the number of companies continuing'to move out of state and the reluctance of new companies to move in. The lack of growth in our economy is currently most dramatically evidenced by the number of square feet of vacant space owned or operated by our members in the Twin City metropolitan area. This situation is in sharp contrast to aggressive cities and states throughout the country who are enjoying an expanding and growth-oriented economic climate. We are developing a plan of action for a new coalition of interested Minnesota businesses, associations and individuals supportive of economic growth and a healthy economic climate. It is hoped that NAIOP can take a leadership role in coordinating the interests of the entire real estate community. More on this subject in future reports. The next meeting of the Legislative Committee will be on September 23rd at 7:30 a.m. at the Ambassador Motor Hotel. Please contact any of the Legislative Committee members listed below on subjects Or ideas you may have about yqur concerns in the_!egislative area. Robert Worthington, R. L. Hoffman, A1 Beisner, Boyd Stofer, Jeff Coult, Tom Davis, Greg Bradbury, James Campbell, David Weir, Jim Stuebner. -- James C. Stuebner, Chairman NAIOP Legislative Committee MEMBERSHIp COMMITTEE The Membership Committee is pleased to announce the addition of 11 new members to our chapter. They are: dOHN STREETER Action Construction Company JAMES MILLER Blomquist-Mi]ler Rea] Estate Inc. LARRY McGOUGH McGough Construction Company STEPHEN A. ROSENTHAL Investors Diversified Services, Inc. KENNETH MAHAL L.K. Mahal & Associated BEN BAUER 1st Edina National Bank DALE HAPPE Happe Properties MICHAEL MURRAY M-R Properties, Inc. ROBERT BOISCLAIR The Boisclair Corporation STEPHEN COX Cox Financial Inc. WAYNE D. KUYKENDALL Honeywell Building Management Services We welcome each new member and invite your active participation in all the events sponsored by our great organization.