Home improvement retailer, Menard’s, successfully lowered the value of its Moorhead store in tax court. When it pressed its position based only on sales of similar properties, the court replied that valuation is not that narrowly focused. The appeal covered years 2011 through 2014 and the original value was $11,200,000 for each year. At tax court, Menard’s sought a value as of $4,000,000. The tax court’s final value decision was as follows:
| Appraisal Year | County Assessor | County’s Appraiser (Vergin) | Menard’s Appraiser (MaRous) | Tax Court Order | Tax Court Amended Order |
| 2011 | $11,200,000 | $12,000,000 | $4,000,000 | $7,432,100 | $7,516,600 |
| 2012 | $11,200,000 | $12,300,000 | $4,000,000 | $7,585,800 | $7,681,300 |
| 2013 | $11,200,000 | $12,500,000 | $4,000,000 | $7,219,000 | $7,331,300 |
| 2014 | $11,200,000 | $12,700,000 | $4,000,000 | $7,393,600 | $7,556,200 |
Menard’s appealed the tax court’s decision because it wanted the Minnesota supreme court to rule that only the sales comparison approach should have been considered, instead of the sales comparison and cost approaches to value.
The court has long held that review of the tax court’s decisions is very limited and it will only overturn a valuation if is clearly erroneous. Menard’s contended that the tax court’s job was done when it determined that the sales comparison approach provided a reliable indicator of market value. However, the court has already ruled that approach out when it said some years ago,
“appraisal is an inexact valuation determination” and an “estimate of value”
Lewis & Harris v. Cty. of Hennepin, 516 N.W.2d 177, 180 (Minn. 1994) (emphasis added). The court has also stated that whenever possible the tax court should apply at least two of the approaches to value, and value indications derived can serve as useful checks on each other. Overriding weight can be given to one approach over another and the tax court has the discretion to determine what weight it will assign to each approach.
Finally, the court emphasizes that none of its decisions narrow the view of the inexact science of real estate appraisal to such a degree. As a result, for property tax valuation, the methodology should try to avoid being so narrowly focused.
The court also weighed in on the highest and best use determination and the depreciation analysis for the Menard’s property. If interested in the finer points of the valuation issues, here is the full November 9, 2016 decision for Menard, Inc. v. County of Clay.