Eden Prairie Mall, LLC v. County of Hennepin
797 N.W.2d 186
| Minn. | 2011Background
- Relator Eden Prairie Mall challenges January 2, 2005 and January 2, 2006 market values for the mall parcel and the Von Maur anchor parcel.
- County assessed values for 2005: mall $90,000,000; Von Maur $8,913,000. For 2006: mall $100,000,000; Von Maur $9,408,000.
- Tax court increased values above both county assessments and trial appraisals; EPM filed bankruptcy after trial.
- EPM sought automatic stay under 11 U.S.C. § 362(a)(1); tax court rejected stay.l
- Tax court ultimately remanded the mall valuation for further explanation and potential new evidentiary proceedings, while affirming Von Maur value.
- Concurrence notes concerns about adopting one party’s figures and discusses scope of remand.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Automatic stay applicability | EPM argues stay applies | Tax court held petitions not stayed | Stay does not apply to tax petitions |
| Tax court authority to adjust value | Value should align with appraisals | Tax court may deviate with reasoned decision within record | Tax court may adjust value above appraisal if properly explained and supported |
| Reliance on County recalculation | Court adopted County’s recalculated values | Adoption within record | Remand for independent explanation of reasons and factual support |
| Tenant improvements and NOI adjustments | Deduction for tenant improvements should be included | Adjustments not clearly justified | Remand to determine appropriate NOI adjustments including TI treatment |
| Capitalization rate determination | Rate misclassified mall as Class B+; rates too low | Court’s rate within record, may revisit on remand | Remand allowed to revisit capitalization rate on remand |
Key Cases Cited
- Carson Pirie Scott & Co. (Southdale) v. Cnty. of Hennepin, 508 N.W.2d 200 (Minn. 1993) (automatic stay applies to petitions; proceedings under ch. 278 initiated by taxpayer; not stayed)
- Carson Pirie Scott & Co. (Ridgedale) v. County of Hennepin, 576 N.W.2d 445 (Minn. 1998) (tax court may value within credible range but must explain reasoning)
- Southdale Circle Partnership v. County of Hennepin, 424 N.W.2d 536 (Minn. 1988) (no counterclaim by taxing authority under tax assessment petitions)
- Equitable Life Assurance Soc’y of the U.S. v. Cnty. of Ramsey, 530 N.W.2d 544 (Minn. 1995) (valuation methodologies and deference to tax court findings)
- Hansen v. Cnty. of Hennepin, 527 N.W.2d 89 (Minn. 1995) (valuation within range; credibility of expert testimony)
- Am. Express Fin. Advisors, Inc. v. Cnty. of Carver, 573 N.W.2d 651 (Minn. 1998) (tax court not bound to accept exact appraisal values)
- F-D Oil Co. v. Comm’r of Revenue, 560 N.W.2d 701 (Minn. 1997) (legal standards for review of valuation findings)
- Montgomery Ward & Co. v. Cnty. of Hennepin, 450 N.W.2d 299 (Minn. 1990) (deferential standard of review for valuation)
- Nw. Nat’l Life Ins. Co. v. Cnty. of Hennepin, 572 N.W.2d 51 (Minn. 1997) (deference to tax court findings when supported by record)
- EOP-Nicollet Mall, L.L.C. v. Cnty. of Hennepin, 723 N.W.2d 270 (Minn. 2006) (valuation method and review considerations)