HomeMy WebLinkAbout20041582.tiff RECORD OF PROCEEDINGS
MINUTES
BOARD OF COUNTY COMMISSIONERS
WELD COUNTY, COLORADO
JUNE 7, 2004
TAPE #2004-25
The Board of County Commissioners of Weld County, Colorado, met in regular session in full conformity
with the laws of the State of Colorado at the regular place of meeting in the Weld County Centennial Center,
Greeley, Colorado, June 7, 2004, at the hour of 9:00 a.m.
ROLL CALL: The meeting was called to order by the Chair and on roll call the following members were
present, constituting a quorum of the members thereof:
Commissioner Robert D. Masden, Chair
Commissioner William H. Jerke, Pro-Tem
Commissioner M. J. Geile
Commissioner David E. Long
Commissioner Glenn Vaad - EXCUSED
Also present:
County Attorney, Bruce T. Barker
Acting Clerk to the Board, Carol A. Harding
Director of Finance and Administration, Donald D. Warden
MINUTES: Commissioner Long moved to approve the minutes of the Board of County Commissioners
meeting of June 2, 2004,as printed. CommissionerJerke seconded the motion,and it carried unanimously.
CERTIFICATION OF HEARINGS: Commissioner Jerke moved to approve the Certification of Hearings
conducted on June 2,2004,as follows: 1)Hearing to obtain Public Input regarding an Infrastructure Project,
Aurora Organic Dairy Milk Processing Plant(a CDBG project);2)COZ#600,John Zadel, Go Intermill Land
Surveying, Inc.; and 3) USR#1454, Michael Arrington. Commissioner Long seconded the motion,which
carried unanimously.
AMENDMENTS TO AGENDA: Items#5 and 6 were deleted from New Business,since all fees have been
paid.
PUBLIC INPUT: No public input was given.
CONSENT AGENDA: Commissioner Jerke moved to approve the consent agenda as printed.
Commissioner Long seconded the motion, and it carried unanimously.
PRESENTATIONS:
ROCKY MOUNTAIN STAMPEDE PROCLAMATION FOR 2004: The representatives from the Rocky
Mountain Stampede were not present to make the Presentation for 2004.
2004-1582
BC0016
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WARRANTS: Donald Warden, Director of Finance and Administration, presented the following warrants
for approval by the Board:
All Funds $908,270.53
Commissioner Jerke moved to approve the warrants as presented by Mr. Warden. Commissioner Long
seconded the motion, which carried unanimously.
OLD BUSINESS:
CONSIDER PETITION FOR ABATEMENT OR REFUND OF TAXES FOR 2001, 2002 AND 2003 -
RES-0310, C/O TIMOTHY CLANCY(CON'T FROM 5/17/04): Chair Masden stated this item will be moved
to the end of the agenda.
NEW BUSINESS:
CONSIDER GRANT RENEWAL APPLICATION FOR COLORADO WOMEN'S CANCER CONTROL
INITIATIVE: Gaye Morrison, Department of Public Health and Environment, stated this is a renewal
application for the period of July 1,2004,through June 30,2005. She stated this grant,which has increased
to$76,835.97,will provide a Health Education Specialist II. She further stated the purpose of the grant is
to develop a regional network rather than funding one-on-one contact with clients, and the coordinator will
work with eight counties in Colorado. Commissioner Geile moved to approve said application and authorize
the Chair to sign. Seconded by Commissioner Long, the motion carried unanimously.
CONSIDER ENTRY UPON VARIOUS LANDS BY WELD COUNTY VEGETATION MANAGEMENT
SPECIALIST: Ron Broda, Department of Public Works,stated he is seeking approval to enter on various
lands for noxious weed control. Commissioner Geile moved to approve said entry. The motion,which was
seconded by Commissioner Long, carried unanimously.
CONSIDER SUBCONTRACTAGREEMENTTO PROVIDE INFRASTRUCTURE IMPROVEMENTS FOR
COMMUNITY DEVELOPMENT BLOCK GRANT AND AUTHORIZE CHAIR TO SIGN-GREELEY/WELD
ECONOMIC DEVELOPMENTACTION PARTNERSHIP, INC.: Mr.Warden stated this is the last of the three
agreements necessary regarding the Community Development Block Grant(CDBG)forAurora Dairy. This
is the subcontract with the Greeley/Weld Economic Development Action Partnership, Inc., to administer
the CDBG contract. He stated the County has typically followed this process with other economic
development grants. Responding to Commissioner Jerke, Mr. Warden stated the dairy does not have to
repay this funding for the sewer connection;however, it has to meet certain CDBG employment conditions,
specifically for a minimum of two years, it must employee 50 new individuals, and 51 percent of those new
employees must meet low or moderate income standards. Commissioner Long moved to approve said
agreement and authorize the Chair to sign. Seconded by Commissioner Jerke, the motion carried
unanimously.
CONSIDER COMMUNICATIONS TOWER AND SITE LEASEAGREEMENT-HOWARD AND ROBERTA
FOSTER: Mr.Warden stated this lease is for the last of the 800 MHz towers, and this one is in the Grover
area. He stated equipment will be moved from the site currently located at 35th Avenue and Highway 34,
since the new Greeley water tower will replace the 35th Avenue site. Mr. Warden stated this tower lease
will provide the best coverage ever available in northeast Weld County,and the lease is less expensive than
building a new tower. Commissioner Long moved to approve said agreement and authorize the Chair to
sign. Seconded by Commissioner Jerke, the motion carried unanimously.
CONSIDER PETITION FOR ABATEMENT OR REFUND OF TAXES FOR 2001, 2002 AND 2003 -
RES-0310, C/O TIMOTHY CLANCY(CON'T FROM 5/17/04): Mike Sampson,Assessor's Office, stated
this is the old State Farm facility in Evans. He reviewed the ownership of the facility, stating State Farm
Minutes, June 7, 2004 2004-1582
Page 2 BC0016
traded properties with the developer at Promontory,who then leased the property back to State Farm for
54 months. During that lease,the developer donated the property to the UNC Foundation,who sold it to the
current owner, RES-0310, in November of 2003. During the term of the lease, State Farm paid all
expenses, including taxes. Since State Farm has not authorized the current owner to file a petition on its
behalf, Mr. Sampson stated it is the contention of County legal staff that RES-0310 has no legal standing
to file an appeal. He stated at the meeting held May 17,2004,the Board continued this matter to allow Tim
Clancy, owner's representative, time to look for documentation authorizing them to file for those years.
Responding to Commissioner Geile, Mr. Sampson stated the request for denial is based on the lease
information and market for the facility. He reiterated State Farm had the lease in place and prior to that
State Farm owned the property. When State Farm vacated the property, they continued to lease with the
developers,and the lease was then assigned to the UNC Foundation,at which time State Farm continued
to pay for all expenses. Mr. Clancy stated he looked at the lease, and it is true that State Farm did pay for
all expenses, including taxes, during the life of the lease; however, his contention is the current owner did
not sign away its interest to pursue abatement of taxes. He stated if the abatement were approved, he
would have to return to the terms of the lease to repay the appropriate party the appropriate amounts. Mr.
Barker stated he disagrees,and,in the absence of Cyndy Giauque,Assistant County Attorney,stated if this
is appealed to the Board ofAssessmentAppeals it becomes a case de novo,meaning it is a new case and
entirely new evidence is presented. Mr.Clancy contended the potential rent for the property dropped when
it was known State Farm was going to vacate,and that is the level of value that should be set through 2001,
2002, and 2003.
Mr.Sampson presented a packet of information,marked Exhibit A,to the Board and stated the information
provided is predicated on the taxes paid in 2003,not the 2003 valuation. He stated the value is based upon
the value as of January 1, 2002, which is derived from the commercial market data in the period of
January 1, 1999,to June 30,2000. He reviewed general market information included in the packet regarding
the market and investment situation during the years in question,and also the income and market approach
sheets,defending the values since the inception of the lease. Mr.Sampson stated the property was valued
at$10,262,365, or$44.08 per square foot for the 1999/2000 time period, and he reviewed his manner of
splitting out the office and warehouse area of the facility. Mr. Sampson also reviewed a number of
comparable sales during the period supporting his value,as well as an appraisal from Wes Foster in 1998
of$9.8 million. Mr.Sampson reviewed the income approach, using the actual income figures derived from
the subject property. He stated for the year 2000,the income from January through August was$92,338
per month, and from September through December it was $87,500, for a total income of$1,083,871 for
2000, or$4.73 per square foot. Applying a ten percent Capitalization rate, as described in his packet,the
value would be$10,838,710. Mr. Sampson stated the reconciliation of approaches, shown on page 18 of
his packet, indicates the income approach is very solid and fully supported by both the proforma information,
as well as the prevailing market income information for the local economy as a whole. He stated the market
approach supports the income approach, and both indicate the value on the property in 2002 was
supportable and justified. Mr. Sampson stated the cost approach,even when accounting for external and
functional obsolescence issues, supports the market value of the subject in 2000, and consequently,the
value as of January 1, 2002. In summary, he stated the cost approach shows the value at$10,857,682,
the market approach shows $10,262,365, and the income approach shows $10,838,710, all of which
support the Assessor's value of$10,096,418. Responding to Commissioner Geile, Mr. Sampson stated
there is a total of an additional 30 percent allowed for obsolescence, and he gave more value to the
industrial sector value than office properties. Mr. Sampson reiterated he did not only use the lease
information, he also considered all approaches and derived the appropriate value.
Cyndy Giauque, Assistant County Attorney, stated RES-0310 became the title owners late in 2003;
therefore,they did not pay taxes on this property in 2001 and 2002. She stated they are requesting a refund
they did not pay,and are basing their right to file the petition on the purchase contract with UNC Foundation,
in which UNC assigned all rights to the new owner. She stated case law in Colorado is clear that an owner
Minutes, June 7, 2004 2004-1582
Page 3 BC0016
may bring a petition for abatement of taxes, only if there is an injury. She stated the statute allows the
abatement; however, the claimant must first sustain an injury, which in this case would be payment of
taxes. UNC Foundation did not pay taxes, neither did the new owner. Since State Farm paid the taxes,
therefore,in order for an abatement to be filed,they would have to have received an assignment from UNC
Foundation in order to claim a refund. Mr. Sampson stated he checked the tax record and found State
Farm paid all taxes during the period of 1999 through 2002. He stated Tri-Point's name does not show up
until 2003. Responding to Commissioner Jerke, Mr. Sampson stated January 1, 2002 is the cut off date
for value consideration, based on the market in 1999 and 2000. He further responded that he had already
lowered the value of this property prior to this abatement being filed, in order to account for the lower
purchase price. He stated a new Notice of Valuation was sent, reflecting a value of$3.5 million this year,
for payment next year. Mr. Sampson stated he felt the decrease in value was justified because of an
abundance of evidence that the value of the property needed to be adjusted; however, he set it at$3.5
million instead of the purchase price of$2.8 million because there are already leases in place for the
property. Responding to CommissionerJerke, Mr. Sampson stated the$2.8 purchase price in 2003 would
normally come onto our books in 2005. Responding to Commissioner Geile, Ms. Giauque stated there is
nothing in the purchase documents to indicate the taxes would be assigned to anyone else; the lease is
specific that State Farm will continue to pay all taxes.
Mr. Clancy stated the current owner does have a right to file for all three years, and he explained the case
Ms. Giauque is using discusses a case when the tenant challenges taxes. He stated the owner did have
an interest,and received the right from the UNC Foundation to challenge the value. Mr. Clancy reiterated
either a tenant or landowner can challenge the value,and the owner always has standing unless it is given
away. He stated he has never found a case where the landowner lost the right to contest. Responding to
CommissionerJerke, Mr. Clancy reiterated part of the purchase contract included assignment to his client
the right to seek an abatement of taxes. Commissioner Geile clarified the petitioner is claiming that the
abatement of taxes was included in the purchase price, therefore they have the right to file the petition;
however, Ms. Giauque is advising the Board they do not. Responding to Commissioner Geile, Mr. Clancy
stated his client is asking for a value of$2.8 million, looking at market, cost, and income approaches. He
stated this is a unique commercial property,and for a facility like this one,the Assessor should go back five
years to determine the value and use the income approach, looking at the economic rent instead of a
short-term lease amount. Responding to Chair Masden, Mr. Clancy stated$2.8 million was the sale price
in 2003; however,the value being requested is not based on the sale price,it is based on other information
available from 1999 to June 30, 2002.
Ron Randall,Wheeler Management Group,stated he personally sold the other State Farm building on 59th
Avenue for$70 per square foot;however, it was a newer building, and it did not go to any type of call center.
Although the presentation by Mr. Sampson is very thorough, he stated he allowed more functional and
external obsolescence than Mr. Sampson. He stated this is an industrial building and Mr. Sampson used
$4.00 per square foot; however, using brochures advertising properties for sale by The Group, which
indicate industrial buildings on the east side of 8th Avenue bring less, and Evans is even lower.
Commissioner Geile stated only completed sales transactions could be used,not simply listings of property.
Mr. Randall stated Mr. Sampson was using properties in west Greeley instead of an appropriate location.
He stated that using the Assessor's own list,the two largest industrial buildings are only 30,000 to 40,000
square feet,therefore,they do not allow for adequate comparison. He indicated values from$5.78 to$28.24
and stated, if they are industrial properties, these are the values that should be used. He stated his
valuation of this property would be done logically, assuming someone wished to purchase it, signed a
contract on it, and received due diligence of 90 days with a 120-day close on it. In the due diligence, he
stated, they would certainly look at when the lease was signed on May 20, 1999, and on a $10 million
property,they would not consider a four and one-half year lease as long-term;therefore,the lease should
not be used to support the value. He stated that the value set by the lease on May 20, 1999 was$12.00 per
square foot, however, any knowledgeable buyer would know the State Farm lease would not be renewed,
Minutes, June 7, 2004 2004-1582
Page 4 BC0016
and the value would be reduced to$2.95 per square foot as a good market price. After the free rent given
and the time value of money, the value would be reduced to $1.85 per square foot; using a 45 percent
holding cost for the time value of money,and TI expense the value would reduce to$1.23;with a ten percent
capitalization rate,which he agrees with, the value would be$12.30 per square foot, or$2.8 million. Mr.
Randall stated the income approach at$12.30 is what the owner will get in the market, and was set when
the lease was signed.
Commissioner Geile stated the EFTC building in Mr.Sampson's packet is valued at$47.63 per square foot,
and it is a good indicator since it is functioning as both an industrial warehouse and an office facility. He
stated all the comparable sales submitted by Mr.Sampson are legitimate sales within the appropriate time
frame. Commissioner Geile moved to deny the petition of RES-0310 for abatement of taxes for the years
2001 and 2002,as recommended by legal staff. The motion,which was seconded by CommissionerJerke,
carried unanimously. Commissioner Geile stated there is enough evidence given under the cost approach,
with functional and locational obsolescence applied; under the market approach with appropriate
comparables; and under the income approach, using actual numbers in place, and a ten percent
capitalization rate, which everyone agreed to. Therefore, he moved to support the value as set by the
Assessor of$10,262,365, and to deny the petition of RES-0310 for abatement of taxes for the year 2003.
Commissioner Jerke seconded the motion, although he stated he arrived at his decision by viewing 2003
as a cusp year. He stated the new sale indicates a lower value in the future; however, the Assessor's
Office has already lowered the value down to$3.5 million,indicating they are being very responsive and are
trying to work with the owner. Chair Masden and Commissioner Long stated they agree with the findings
as stated by Commissioners Geile and Jerke, and on a call for the vote, the motion carried unanimously.
RESOLUTIONS AND ORDINANCES: The resolutions were presented and signed as listed on the
consent agenda. No Ordinances were approved.
Let the minutes reflect that the above and foregoing actions were attested to and respectfully submitted by
the Acting Clerk to the Board.
le w`4.4'ng no further business, this meeting was adjourned at 10:20 a.m.
1fi!* ®♦
,py, �� BOARD OF COUNTY COMMISSIONERS
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�� �, Robert D. Masden, Chair
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William H. J,4rke, Pro-Tem
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M�eile ��
David E. Long
EXCUSED
Glenn Vaad
Minutes, June 7, 2004 2004-1582
Page 5 BC0016
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