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HomeMy WebLinkAbout11-05JANUARY 11, 2011 11 -05 RESOLUTION (CARRIED 7 -0 LOST LAID OVER WITHDRAWN ) PURPOSE: APPROVE SETTLEMENT AGREEMENT FOR EXCESSIVE ASSESSMENTS FOR PROPERTIES OWNED BY J. PETER JUNGBACKER, ALEXANDER & BISHOP, LTD., 20 STREET, LLC, OSHKOSH WESTOWNE, LLC, LAKEVIEW TERRACE, LLC AND JUNGBACKER'S CHILDREN'S PRESENT INTEREST TRUST ($36,234.55) INITIATED BY: CITY ADMINISTRATION WHEREAS, J. Peter Jungbacker on behalf of himself and entities he is associated with filed several lawsuits claiming excessive assessments and seeking a refund of taxes paid for the years 2008 and 2009; and WHEREAS, The properties in dispute were: Case. No. 09CV2525 Lakeview Terrace, LLC for 2008 taxes for property located at 1191 High Avenue. Case. No. 09CV2526 Jungbacker Children's Present Interest Trust for 2008 taxes for property located at 1627 Elmwood Avenue. Case. No. 09CV2527 J. Peter Jungbacker and Alexander & Bishop Ltd. for 2008 taxes for properties located in the Quail Run Farm subdivision. Case. No. 10CV1483 J. Peter Jungbacker, Alexander & Bishop Ltd., Jungbacker Children's Present Interest Trust, Lakeview Terrace, LLC, 20 Street, LLC, and Oshkosh Westowne, LLC for 2009 taxes for properties located in the Quail Run Farm subdivision, 1627 Elmwood Avenue, 1191 High Avenue, 1621 W. 20 Avenue, and 2231 Westowne Avenue. And WHEREAS, the City participated in mediation of the above - listed cases and with the assistance of the mediator a proposed resolution to the matters was reached requiring Council approval. JANUARY 11, 2011 11 -05 RESOLUTION CONT'D NOW, THEREFORE, BE IT RESOLVED by the Common Council of the City of Oshkosh that the 2008 and 2009 assessed value for property owned by Lakeview Terrace, LLC and located at 1191 High Avenue be established at $2,179,300 and that taxes be refunded to Lakeview Terrace, LLC in the amounts of $9414.42 for 2008 and $9614.26 for 2009. BE IT FURTHER RESOLVED that the 2008 and 2009 assessed value for property owned by Jungbacker's Children's Present Interest Trust and located at 1627 Elmwood Avenue be established at $1,174,900 and that taxes be refunded to Jungbacker's Children's Present Interest Trust in the amounts of $8512.59 for 2008 and $8693.28 for 2009. BE IT FURTHER RESOLVED that no interest will be paid upon the refunded amounts. BE IT FURTHER RESOLVED that this Resolution is subject to the dismissal of all pending lawsuits between the parties listed above and the City of Oshkosh. BE IT FURTHER RESOLVED by the Common Council of the City of Oshkosh that the proper City officials are hereby authorized to enter into an appropriate Settlement Agreement containing the terms above, and said City officials are authorized and directed to take those steps necessary to implement the terms and conditions of the Agreement. CITY HALL 215 Church Avenue P.O. Box 1130 Oshkosh, "S °° 54903 -11330 City of Oshkosh 0 OlHKOlH TO: Honorable Mayor and Members of the Common Council FROM: Lynn A. Lorenson, City Attorney DATE: January 6, 2011 RE: Approve Settlement Agreement for Excessive Assessments for properties owned by J. Peter Jungbacker, Alexander & Bishop, Ltd., 20 Street, LLC, Oshkosh Westtowne, LLC, Lakeview Terrace, LLC and Jungbacker Children's Present Interest Trust BACKGROUND J. Peter Jungbacker, on behalf of himself and entities he is associated with, filed several lawsuits claiming excessive assessments and seeking a refund of taxes paid for the years 2008 and 2009. The properties in dispute were: Case. No. 09CV2525 Lakeview Terrace, LLC for 2008 taxes for property located at 1191 High Avenue. Case. No. 09CV2526 Jungbacker Children's Present Interest Trust for 2008 taxes for property located at 1627 Elmwood Avenue. Case. No. 09CV2527 J. Peter Jungbacker and Alexander & Bishop Ltd. for 2008 taxes for properties located in the Quail Run Farm subdivision. Case. No. 10CV1483 J. Peter Jungbacker, Alexander & Bishop Ltd., Jungbacker Children's Present Interest Trust, Lakeview Terrace, LLC, 20 Street, LLC, and Oshkosh Westowne, LLC for 2009 taxes for properties located in the Quail Run Farm subdivision, 1627 Elmwood Avenue, 1191 High Avenue, 1621 W. 20 Avenue, and 2231 Westowne Avenue. City staff worked with Attorney Richard Carlson who represented the City through the City's insurance carrier. The parties participated in mediation with Attorney Joseph Beisenstein and a proposed settlement was reached. The proposed settlement would reduce the assessed values of two of the properties, the Lakeview Terrace property located at 1191 High Avenue and the Bishop's Place property located at 1627 Elmwood Avenue, to the amounts that had been established for the 2010 tax year. This reduction would result in a refund of taxes in the total c«? Jungbacker Assessments: 1/6/11: Page 2 amount of $36,234.55 for the prior two tax years. The settlement provides that there would be no interest paid on the amount refunded, that Mr. Jungbacker would dismiss all of the pending lawsuits listed above and that the settlement was subject to approval by the Common Council. This item is before the Council for approval of the proposed Settlement Agreement. ANALYSIS Mr. Jungbacker, on his own behalf and on the behalf of several entities owned or controlled by him, has contested the real property tax assessments relative to those properties before the City's Board of Review for the past several years. Most of the properties are income - producing properties and the remaining properties are lots within a subdivision located on the City's west side. In some cases the Board had made adjustments to the values of the properties as established by the assessor and in some cases the Board sustained the assessor's determinations of value. Property owners, such as Mr. Jungbacker, who are not satisfied with the determinations of the Board of Review have several options for reviewing those determinations. Mr. Jungbacker chose to file excessive assessment claims and lawsuits against the City to determine the value of the properties in question. In these types of suits, a court is free to consider any information pertinent to determining the value of the property in question and may consider that information without regard to the determination of the Board of Review. In preparation for the lawsuit and mediation, the parties prepared and submitted information for each other's and the mediator's consideration. In addition, the City Assessor had met with Mr. Jungbacker prior to the determination of the 2010 assessments and had received some additional information regarding several of the properties. Because of the additional information received related to two of the income - producing properties, the Lakeview Terrace rental property located at 1191 High Avenue and the Bishop's Place rental property located at 1627 Elmwood Avenue, the City Assessor reduced the assessments for those two properties for 2010. After reviewing all of the information gathered to date and the information presented at the mediation, staff is recommending an adjustment to the assessed values of the two properties located at 1191 High Avenue and 1627 Elmwood Avenue to the amounts established for the 2010 assessments for the 2008 and 2009 tax years. Both properties are rental properties built in the mid 1960's. Neither property has been recently sold. There are few sales of rental property within the past several years to compare the values of the properties too and any recent sales require adjustments to the sales price to make the properties truly comparable. Therefore, the City Assessor determined that it was reasonable to review the income and expense information and use that information to determine a value. Current income and expense information was Jungbacker Assessments: 1/6/11: Page 2 amount of $36,234.55 for the prior two tax years. The settlement provides that there would be no interest paid on the amount refunded, that Mr. Jungbacker would dismiss all of the pending lawsuits listed above and that the settlement was subject to approval by the Common Council. This item is before the Council for approval of the proposed Settlement Agreement. ANALYSIS Mr. Jungbacker, on his own behalf and on the behalf of several entities owned or controlled by him, has contested the real property tax assessments relative to those properties before the City's Board of Review for the past several years. Most of the properties are income - producing properties and the remaining properties are lots within a subdivision located on the City's west side. In some cases the Board had made adjustments to the values of the properties as established by the assessor and in some cases the Board sustained the assessor's determinations of value. Property owners, such as Mr. Jungbacker, who are not satisfied with the determinations of the Board of Review have several options for reviewing those determinations. Mr. Jungbacker chose to file excessive assessment claims and lawsuits against the City to determine the value of the properties in question. In these types of suits, a court is free to consider any information pertinent to determining the value of the property in question and may consider that information without regard to the determination of the Board of Review. In preparation for the lawsuit and mediation, the parties prepared and submitted information for each other's and the mediator's consideration. In addition, the City Assessor had met with Mr. Jungbacker prior to the determination of the 2010 assessments and had received some additional information regarding several of the properties. Because of the additional information received related to two of the income - producing properties, the Lakeview Terrace rental property located at 1191 High Avenue and the Bishop's Place rental property located at 1627 Elmwood Avenue, the City Assessor reduced the assessments for those two properties for 2010. After reviewing all of the information gathered to date and the information presented at the mediation, staff is recommending an adjustment to the assessed values of the two properties located at 1191 High Avenue and 1627 Elmwood Avenue to the amounts established for the 2010 assessments for the 2008 and 2009 tax years. Both properties are rental properties built in the mid 1960's. Neither property has been recently sold. There are few sales of rental property within the past several years to compare the values of the properties too and any recent sales require adjustments to the sales price to make the properties truly comparable. Therefore, the City Assessor determined that it was reasonable to review the income and expense information and use that information to determine a value. Current income and expense information was Jungbacker Assessments: 1/6/11: Page 3 provided by the property owner and the Assessor determined that a reduction in the value of the property was appropriate. The Assessor made the reduction for the current year and through the mediation process it was agreed by Mr. Jungbacker and by city staff, subject to Council approval, to apply the reduction to the 2008 and 2009 tax years. While staff reviewed the information provided relative to the other properties under dispute, no adjustments to valuation or tax refunds are proposed for those properties and as indicated above, Mr. Jungbacker has agreed to dismiss the lawsuits related to those other properties as part of this settlement. If the Council does not approve the proposed settlement, we would proceed with litigation of the matters. If the City would proceed to litigation and not ultimately prevail in that litigation, the City would be obligated to refund any amounts that the court determined were excessive, together with statutory interest on those amounts. In addition, a prevailing party in litigation may be entitled to costs that could include the costs of experts retained as well as other costs of litigation. Should the City not prevail, the City may be assessed these additional costs. FISCAL IMPACT The proposed settlement would result in a refund of the assessments issued for 2008 and 2009 for the properties commonly known as Lakeview Terrace, located at 1191 High Avenue, and Bishop's Place, located at 1627 Elmwood Avenue. The refund amounts would be $9414.42 for 2008 and $9614.26 for 2009 for the Lakeview Terrace property and $8512.59 for 2008 and $8693.28 for 2009 for the Bishop's Place property for a total refund amount of $36,234.55. Under the terms of the settlement agreement, no interest would be paid on the refunded amounts. The amount refunded for taxes would include taxes paid to other taxing entities and the City would be allowed to chargeback the portion of those taxes attributable to those entities. RECOMMENDATION Based upon all of the facts of this case and consideration of the law governing the assessment process, Staff recommends that the Council approve the settlement agreement. Re p u ectfully S fnitted, Approved: Linn A. Lore Mark A. Rohloff City Attorney City Manager