In general property taxes in Rochester are going up at about an inflationary rate. However some are substantially higher. Typically this is because their value went up. The city does not set valuations, that comes from the county. Here is an explanation of why this happens.
From: Krupski Mark [mailto:krupski.mark@CO.
Sent: Tuesday, December 02, 2014 9:09 AM
To: Neumann, Gary
Cc: Kvenvold, Steve; Spaeth, Terry; Hackman Julie; Paulson Tami; Kraft Ryan; Devlin Richard; Krenik Belinda; ‘rmiller@rochestermnchamber.
Subject: RE: Commercial Valuation Increases
Good Morning Gary,
Please find attached a copy of the City of Rochester 2014 Assessment Commercial Sales Ratio study stratified by property type: Fast Food, Hotel, Strip Retail, Office, etc.
Based upon the review of what types of commercial property were selling, adjustments were made to those property types to better reflect the market. State law mandates that all property is to be assessed at 100% of market value. The Sales Ratio study is relied on to assist in making those market value determinations.
Reviewing the study, some of the larger increases were applied to strip retail and office condos. Office condos were significantly reduced during the recession and have since made a recovery although not quite as high as they once were prior to 2008.
Strip retail properties also improved based upon the sales study.
The overall commercial segment of the real estate market in Rochester had been flat since about 2008. The last assessment sales study period (October 1, 2012 thru September 30, 2013) demonstrated the first signs of appreciation in some commercial property types.
The core of downtown Rochester also saw increases to land values based upon recent sales of commercial property that are slated for demolition.
Assessors are typically considered ‘historians’ responding to a past market, however I do anticipate that the commercial real estate market will continue to grow based upon buyer enthusiasm around DMC, low interest rates and pent up demand due to a market that had been stagnant from 2008 thru 2012.
Increases in budgets for the City, County, State General Tax and School District further increased the impact to those commercial properties that increased in taxable market value.
I believe the City Bio-business Building would have been impacted by the adjustments made to both Office properties and perhaps land values in the downtown core.
For further explanation on that property please send me the parcel id and I will look into it further.
I hope this helps explain the increases in property taxes you mentioned in your email.
If you have any further questions please let me know.
Mark Krupski, CAE