820 N.W.2d 553
Minn.2012Background
- Ramsey County assessor valued Parcel 0004 (Macy’s) at $17,000,000 for 2006 and 2007, including Federated’s leasehold in adjacent Parcel 0005.
- Federated appealed under Minn. Stat. ch. 278 challenging the Parcel 0004 valuations; the leasehold was not separately consolidated for tax purposes.
- Parcel 0005 (basement space) is contiguous to Parcel 0004 and long-term leasehold rights were created by a 1992 Equitable lease, later assigned to Federated.
- Tax court held Federated’s ownership in Parcel 0004 included the Parcel 0005 leasehold but found the leasehold’s value was outside tax court jurisdiction on appeal.
- Tax court concluded Parcel 0005’s value could not be included in Parcel 0004’s value due to lack of statutory consolidation; county challenged this on certiorari.
- This decision governs on remand to include the leasehold’s contributory value when determining Parcel 0004’s fair market value.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether tax court has jurisdiction to value an adjacent leasehold. | Ramsey County | Federated | Yes; tax court has jurisdiction to consider the leasehold if it is real property under 272.03 and affects value. |
| Whether the Parcel 0005 leasehold runs with Parcel 0004 as real property to affect Parcel 0004’s value. | Ramsey County | Federated | Yes; the leasehold satisfies privity, touch and concern, assignability; runs with the land, and affects value. |
Key Cases Cited
- Eden Prairie Mall, LLC v. Cnty. of Hennepin, 797 N.W.2d 186 (Minn. 2011) (tax petition jurisdiction and valuation standards under chapter 278)
- In re Objections and Defenses to Real Property Taxes, 410 N.W.2d 321 (Minn. 1987) (jurisdictional principles for real property tax appeals)
- Harold Chevrolet, Inc. v. Cnty. of Hennepin, 526 N.W.2d 54 (Minn. 1995) (standards for reviewing tax court determinations)
- Kettle River R.R. Co. v. E. Ry. Co., 41 Minn. 461, 43 N.W. 469 (Minn. 1889) (test for covenants running with the land; privity and touch/concern)
- Shaber v. St. Paul Water Co., 30 Minn. 179, 14 N.W. 874 (Minn. 1883) (covenants running with the land; land-use restrictions)
- Pelser v. Gingold, 214 Minn. 281, 8 N.W.2d 36 (Minn. 1943) (covenants running with the land require touching and assignment)
- Sjoblom v. Mark, 103 Minn. 193, 114 N.W. 746 (Minn. 1908) (requirements for covenants running with the land)
- In re Turners Crossroad Dev. Co., 277 N.W.2d 364 (Minn. 1979) (intent and binding nature of covenants running with land)
- Alvin v. Johnson, 241 Minn. 257, 63 N.W.2d 22 (Minn. 1954) (easements/roadways and valuation considerations in assessable property)