4. Tax Equalization Board reconvenes

Security Self Storage 3825 34th Ave S Recommendation Ben Anvary is appealing the increase in value from $1,402,900 to $1,829,000 on his mini-storage facility (see exhibits A thr F). He indicates that he purchased the property in November, 2005. He also indicates that the sales price of $2,200,000 included $700,000 in blue sky or business value, along with land being valued at $200,000 and improvements at $1,300,000. The taxpayer also indicates that he could build the facility for $17-$18 per square foot, versus the assessment of of $28 per square foot (see exhibits C&D) . The Fargo Assessment Office has provided information showing recent sales of facilities and assessment information (see exhibit G&H). I did view the property and visited with the taxpayers. According to the deed, the sale price was $2,200,000. A mortgage appraisal indicates a value of$2,200,000 for the real property. Also, it appears that the purchase was a basic mini-storage facility with no other business income other than maybe the sale of storage locks and packing boxes. It's unclear how the blue sky amount of $700,000 was arrived at. Income tax depreciationlamoritzation may have been a consideration. The Fargo Assessment report addresses the replacement cost ofthe property. Using the taxpayers costs and including the office, one arrives at a replacement cost of$22.9l per square foot ($1,649,048/71,950). It would appear that these costs are bare bones with no allowance for general contractor overhead, permits, electrical/mechanical, site prep, gravel, etc. Marshall and Swift, a national cost service, estimates cost at about $17.50 for the structure portion only, based on low cost quality construction. The City of Fargo assessed the property at $1,829,000 or $25.42 per sq ft, including land, structures, and pavmg. The taxpayers expressed concern that the assessment was increased based on the sales price ofthis facility. Mr. Pulfrey from the Fargo Assessment Office visited this site on June 23, 2005. The sale occurred in November. It's my understanding that numerous mini-storage facilities were reviewed in 2005 for the 2006 assessment. I also reviewed the taxpayer's concern that a competing facility paid 1/3 the taxes (exhibit F). The parcel the taxpayer was referring is an incorrect parcel. The storage facility portion is on the adjoining parcel and paid taxes of $48,000, not the $12,000 mentioned. Based on the data presented, it is my recommendation to affirm the City of Fargo Assessment. Suggested Motion: "I move that the assessment of $1,829,000 on 3825 34th Ave S be affirmed, as recommended by the City of Fargo Assessment Office and the Director of Equalization."