Representative Matters

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Client: County
Represented County in defense of property tax assessment on large agri-industrial facilities.

Starting in 2003, a regional agribusiness cooperative challenged the valuation of two massive sugarbeet plants in the Red River Valley of Minnesota. The taxing authority, the County, retained Briggs because of the anticipated complexity and scope of the litigation. Briggs successfully moved for dismissal of part of the taxpayer's first petition because it included both plants in one petition, in violation of Minn. Stat. § 278.02. On the eve of trial, the taxpayer voluntarily dismissed its petitions for taxes payable in 2003 and 2004.

As a result of the appraisal that had been prepared for the County for the initial trial, the County determined that it had been undervaluing the plants, and thus it revised the assessment for taxes payable in 2006 and after. The cases involving taxes payable in 2005 and 2006 went through an intensive discovery battle and motion practice. Briggs won a summary judgment motion identifying that certain bins, tanks, silos and sheds at the plants were taxable real property (the taxpayer alleged the structures were non-taxable equipment). The trial on the Pay 2005 and 2006 cases was bifurcated so that value was tried first, before unequal assessment and illegality. The taxpayer argued that the value of the two plants was $11.8 million, whereas the County's position was that they were worth $71 million. The parties had an eight-day trial on value before the Minnesota Tax Court in February 2008. After the trial was completed, the Tax Court requested additional information and held an additional five days of valuation trial in January 2009. Ultimately, the Tax Court found in the County's favor on every valuation issue, and determined that the value of the two plants was about $55 million — a vindication of the County's position. Key issues in this trial included the reliability of "allocated" sales (i.e., whether real property value can be extracted from going-concern stock transactions in which whole businesses are sold), and the identification of the proper "cost model" for use in the cost approach.

Ultimately, through mediation, the parties settled all disputed issues.

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