City Board Of Review Lowers Assessment In Latest Chapter Of Hall Lumber Saga

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By: 
Matt Geiger
Middleton Board of Review members Ron Gross, Bob Jambois and Doug Zwank.

It’s often said that a good compromise sends both sides home a little unhappy. If that’s the case, a recent decision by the Middleton Board of Review was a good compromise.

The board lowered the assessment for a local lumber yard in the latest development in a saga that will cost both the city and the business far more in legal fees than they could hope to recoup through the difference in taxes.

The board voted 4-1 to set the value of the land at $869,700, in agreement with city assessor Paul Musser. However, the board decided to only value improvements on the property at $100,000, a figure $200,000 lower than the one set by Musser.

Arguing on behalf of the city, attorney Matt Fleming contended Hall Lumber had failed to provide enough hard evidence to convince the board of review to overcome a legally required assumption that the assessor’s findings are correct.

Fleming went on to say the Halls’ use of “comparable” land sales in other communities was not comparable, nor did it constitute the most logical way to determine the land’s value.  Fleming called their claims about the value “speculation.”

The city has long contended that its board of review must uphold values that are indicative of each property’s “highest and best use,” which may or may not be their current use.

Hall Lumber has long countered that the current use  is the property’s highest and best use, a claim attorney Charles Giesen, who represented the business, said is bolstered by a decades’ long lack of offers to purchase the parcel.

At the heart of the recent board of review meeting’s disagreement was how much it would cost to make the site suitable for a different type of business. According to Musser, the buildings Hall Lumber uses for office space and to store raw materials have considerable value.

Representatives for the business argued those buildings would have to be razed to make way for a new business, so they have no real value. 

The board of review landed somewhere in the middle.

“I think the issue is the buildings,” said former Middleton Mayor Doug Zwank,  who currently sits on the board of review. “For sure, those buildings are over assessed.”

Board member Bob Jambois said the cost to transform the land for a new use would be “considerable.” Jambois added that he believed the highest and best use of the land is as a lumberyard.

Musser contended the land’s highest and best use, based on the surrounding area, would be as a mix of office and warehouse space.

The June 6 meeting, which only changed the property’s assessed value for the year 2013, was just the latest in a string of debates over Hall Lumber.

The Middleton Board of Review ended a lengthy, contentious meeting on the topic locked in a 2-2 tie one year earlier. The vote meant Musser’s opinion that Hall Lumber, located at 2314 Parview Road, should be valued at $1,167,700 stood in 2012.

Last year, Hall Lumber argued Musser’s figure was unfairly high, saying the parcel was worth around $853,867. The figure was set by Tyson Hall, a member of the family that owns the land. Hall is also a state certified general appraiser.

Those arguing for a lesser value cited other lumber yards in communities outside Middleton – there are no similar businesses in the city - as well as far lower values given by state assessments to properties in the same Middleton business park.

But arguing on behalf of Musser last year, Fleming said those aren’t valid criteria for determining a property’s legal value.

Last year’s vote, prior to which board of review members voiced confusion about whether they were legally allowed to set their own value for the land (rather than accepting the alleged price of either Musser or Hall Lumber), followed a quasi-judicial meeting that stretched from 8:30 a.m. into the afternoon.

 The two sides had already been to circuit court and back to city hall.

Earlier in 2012, a Dane County Circuit Court judge sided with Middleton in the city’s dispute with its own board of review and Hall Lumber, sending the matter back to the board of review for a new assessment. The board had three new members since it set the land’s price at the lower number in 2011.

Judge Juan B. Colás reversed the board of review’s 2011 tax assessment for Hall Lumber, setting up last year’s rehearing on the value of the business.

Colás had concluded that the Middleton Board of Review unreasonably disregarded what the board itself found to be the most reliable evidence of the property’s value. But his decision did not explicitly discuss the legal arguments the City of Middleton made regarding Hall Lumber’s evidence.

The city’s complaint, which was filed July 29, 2011 in Dane County Circuit Court, named both Hall Lumber Sales, Inc. and the Board of Review of the City of Middleton as defendants.

At the heart of the disagreement was a May 23, 2011 decision by the board of review that lowered the valuation of Hall Lumber’s property from $1,167,700 to $853,867.

During two separate public meetings on the matter in 2011, city attorney Larry Bechler told the Middleton City Council the lower assessment was in violation of existing state law.

A recording from the 2011 board of review meeting does not exist following a failure on the city’s part to turn on its audio equipment – a fact that further complicated the caset because the two sides did not agree on what was said during the meeting.

While the city only stood to lose about $1,500 annually in taxes from Hall Lumber – as of early 2012 the city had spent an estimated $7,790 to challenge the assessment in court – Bechler suggested in 2011 that the issue was one of legal precedent and consistency, not money.

2013 marked a new opportunity for Hall Lumber, because landowners may challenge each year’s assessment before the board of review. So while the arguments that took place before the board of review last month were strikingly similar to those made over the past two years, the matter was not legally tied to the two sides’ prior litigation.

Hall Lumber was formed in Middleton in 1958 and moved to its current location in the business park in 1973.

 

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