Hy-Vee Tax Settlement Agree
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December 12, 2006
Mayor and Members of the City Council
of the City of Dubuque
Cit~ Hall
131 & Central Avenue
Dubuque, IA 52001
Chairperson of the
Dubuque County Board of Supervisors
Dubuque County Courthouse
720 Central Avenue
Dubuque, IA 52001
Chairperson of the School Board
Dubuque Community School District
Central Administration Offices
2300 Chaney Road
Dubuque, IA 52001
Chairperson of the Conference Board
of the City of Dubuque
Cit~ Hall
131 & Central
Dubuque, IA 52001
President of the Board of Directors
Northeast Iowa Community College
P.O. Box 400
Calmar, IA 52132
Chairperson of the Board of Trustees
Dubuque County Hospital
Sunnycrest Manor
2375 Roosevelt Street
Dubuque, IA 52001
Chairperson of the Council of the
Dubuque County Agricultural Extension
Service
14742 Hwy. 20 West, Suite 2
Dubuque, IA 52003
RE: Hy Vee Food Stores, Inc., and 4800 Asbury Road Dubuque-lA, L.L.C.
2005 Property Tax Protest
Case No. EQCV095127
Dear Chairpersons, Mayor and President:
.. .
Enclosed is a copy of a Stipulation of Settlement of a tax assessment appeal. Iowa
Code S 441.44 requires that notice of a proposed settlement must be served upon each
of you.
The property that is the subject of this appeal is the Hy Vee Food Store located at 2395
Northwest Arterial, Dubuque, Iowa, Assessor's Parcel No.1 017476005.
The assessed value of the property in 2005 was as follows:
January 1, 2005 assessed value:
Land
Buildings
$1,056,100
4,155,700
$5,211,800
Total
The taxpayer protested the assessed value to the Board of Review claiming the value
was $2,211.800. In response to the protest, the Board reduced the assessment to
$4,862,600. The taxpayer then filed this appeal in the District Court. While the appeal
was pending, the Department of Revenue and Finance ordered a 10% increase in the
assessed value of all commercial property. However, the Board was of the opinion that
its $4,862,600 value was the proper value for the property.
The City Assessor retained the appraisals of Bruce R. Gunderson of Carlson, McClure
& Associates, Inc., and Kevin Pollard of Roy R. Fisher, Inc., to evaluate the property.
Hy Vee also retained appraisals from Kenneth Riggs of Real Estate Research
Corporation and Thomas H. Slack of Appraisal & Consulting Services Group. A
summary of those appraisals are as follows:
Gunderson
$4,950,000
Pollard
$5,600,000
Ri s
$4,000,000
Slack
$4,100,000
A more detailed summary ofthe four appraisals is attached.
A tentative agreement has been reached between the taxpayer and the Board of
Review to settle this case at the value of $4,700,000.
The reduction in assessed value after the 10% increase order will result in a loss of tax
revenue of $21,428 for 2005 and 2006. However, the Board of Review members felt
they could defend the assessed value of $4,862,000 and the agreed upon settlement of
$4,700,000 will result in a loss oftax revenue of only $5350 for 2005 and 2006.
Because of the wide range of the appraisals, there would be considerable risk if a
settlement is not reached that the court could reduce the assessed value substantially
below $4,700,000. Also, if the case is not settled, the estimated cost of trial to the
Board of Review would be $8,800.
....
Thus, it is my opinion and the opinion of the Chairman of the Board of Review that the
settlement at the $4,700,000 assessed value is the most prudent course of action.
Pursuant to the Stipulation of Settlement, this appeal will be dismissed and the tax
assessment will be adjusted to $4,700,000 for January 1,2005 and January 1,2006.
The proposed settlement will be presented to the Court after fourteen days from the
date indicated on the attached Notice of Voluntary Settlement. If there are any
objections to the proposed settlement, they should be made known to the Court prior to
that time.
If you have any questions about the proposed settlement, please contact City Assessor
Rick Engelken at (563) 589-4416.
Very sincerely
ID
Rick E~
City Assessor
Enclosure
cc: Michael C. Van Milligen, City Manager
Barry A. Lindahl, Esq., City Attorney
,/ Jeanne Schneider, City Clerk
APPRAISAL COMPARISON
GUNDERSON POLLARD RIGGS SLACK
HIGHEST AND GROCERY GROCERY RETAIL GROCERY
BEST USE STORE STORE BUILDING STORE
IMPROVED
LAND SIZE 416502 416502 416502 416434
LAND PER SO FT $3.80 $5.00 $4.00 $3.00
LAND VALUE $1,580,000 $2,100,000 $1,700,000 $1,250,000
COST APPROACH
REPLACEMENT $6,543,000 $5,500,000 $4,948,837 $5,462,777
COST NEW ALL
DEPRECIATION PHY % 15% 15% 19.60%
FUNCTIONAL % 20%
EXTERNAL % 20% 25% 27.10%
ALL DEPRECIATION % 45% 32% 60% 47%
ALL DEPRECIATION $ $2,944,437 $2,212,337 $2,969,302 $2,551,091
DEPRECIATED COST VALUE $3,598,758 $3,740,000 $1,979,535 $2,911,686
SITE IMPROVEMENTS $500,000
LAND VALUE $1,580,000 $2,100,000 $1,700,000 $1,250,000
COST APPROACH VALUE $5,180,000 $5,840,000 $4,200,000 $4,160,000
SALES COMPS
BLDG SO FT 65675 65675 65675 66115
PER SO FT PRICE $76 $85 $60 $62
MARKET APPROACH
VALUE $4,991,300 $5,580,000 $3,900,000 $4,100,000
INCOME APPROACH
BLDG SO FT 65675 65675 65675 66115
MARKET RENT $7.25 $9.00 $6.25 $7.00
GROSS INCOME $476,144 $591,075 $410,469 $462,805
OTHER INCOME $114,932 $52,958
POTENTIAL GR INCOME $476,144 $591,075 $525,401 $515,763
VACANCY & CREDIT LOSS 5% 5% 7% 11%
VACANCY & CREDIT LOSS $23,807 $29,554 $36,778 $50,909
EFF GROSS INCOME $452,337 $561,521 $488,623 $464,854
EXPENSES
MANAGEMENT $9,047 $11,230 $12,357
RESERVES $13,570 $16,419
ADMINISTRATIVE $3,284 $3,306
CAM $98,513 $49,586
INSURANCE $16,419 $9,917
VACANT UTILITIES $2,545
EXTERNAL MAINTENANCE $6,612
NET INCOME $429,720 $533,872 $370,407 $380,531
CAP RATE 8.75% 9.50% 9.23% 9.15%
INCOME VALUE $4,910,000 $5,620,000 $4,000,000 $4,161,046
TENANT IMPROVEMENTS -$66,115
RENT LOSS DURING LEASE UP -$232,427
FINAL INCOME VALUE $4,910,000 $5,620,000 $4,000,000 $3,860,000
FINAL VALUE $4,950,000 $5,600,000 $4,000,000 $4,100,000
IN THE DISTRICT COURT FOR DUBUQUE COUNTY
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BOARD OF REVIEW OF THE CITY OF )
DUBUQUE, IOWA )
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HY VEE FOOD STORES, INC., and
4800 ASBURY ROAD DUBUQUE-lA,
L.L.C.,
vs.
01311 EQCV095127
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Plaintiffs,
Defendant.
STIPULATION OF SETTLEMENT
Plaintiffs Hy Vee Food Stores, Inc., and 4800 Asbury Road Dubuque-lA,
L.L.C., and Defendant Board of Review of the City of Dubuque, Iowa, state to the
Court that the pending litigation with regard to the tax assessment as of January
1, 2005, and January 1, 2006, for the property at 2395 Northwest Arterial,
Dubuque, Iowa, Assessor's Parcel No. 1017476005, legally described as:
Lot 3 Asbury Plaza NO.2
has been settled and agreed upon as follows:
Valuation:
Land
Improvements
Total
$1,161,700
$3,538,300
$4,700,000
It is further agreed that upon entry of a Court Order confirming the above
settlement, the above pending litigation shall be dismissed with prejudice and the
costs shall be paid by Appellant.
Dated this 12M day of \)~~1o.1'---
,2006.
HY VEE FOOD STORES, INC., and
4800 ASBURY ROAD DUBUQUE-lA,
L.L.C.
CITY BOARD OF REVIEW OF
DUBUQUE A
by: ~
Douglas R.
SHUTTL LL,
P.L.C.
500 US Bank Bldg, PO Box 2107
151 West 8th Street
Cedar Rapids, IA 52406
(319) 365-9461
by:
B
C' Attorney
Site 330, Harbor View Place
300 Main Street
Dubuque, fA 52001-6944
(563) 583-4113
,
Attorney for Plaintiffs
Counsel for the Board of
Review
IN THE IOWA DISTRICT COURT FOR DUBUQUE COUNTY
HY VEE FOOD STORES, INC., and
4800 ASBURY ROAD DUBUQUE-lA,
L.L.C.,
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BOARD OF REVIEW OF THE CITY OF )
DUBUQUE, IOWA )
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Plaintiffs,
vs.
01311 EQCV095127
Defendant.
NOTICE OF VOLUNTARY SETTLEMENT
TO: City of Dubuque, Iowa
County of Dubuque, Iowa
Dubuque Community School District
Northeast Iowa Community college
Dubuque County Hospital
Dubuque County Agricultural Extension Service
Conference Board of the City of Dubuque
YOU ARE HEREBY NOTIFIED: pursuant to Iowa Code Section 441.44,
that the above-named Plaintiffs and the Board of Review of the City of Dubuque,
State of Iowa, Defendant, have entered into a voluntary settlement of this
assessment appeal.
A copy of the proposed Stipulation of Settlement is attached hereto.
This Stipulation of Settlement will be presented to the above-named Court
for approval after fourteen days from the date of this Notice.
Dated this 12th day of December, 2006.
Board of Review for the City of Dubuque,
Defendant- ellee
\
,"J' . ..
City Attorney
Suite 330, Harbor View Place
300 Main Street
Dubuque, IA 52001-6944
(563) 583-4113