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By Matt Bewley, Grand Forks Herald, Published August 08 2009

American Crystal Sugar Co. order to pay higher property taxes

GRAND FORKS, N.D. – American Crystal Sugar Co. will pay higher property taxes for its East Grand Forks and Crookston plants in Minnesota for 2005 and 2006 than was originally assessed, according to rulings handed down Wednesday by Judge Kathleen Sanberg of the Minnesota Tax Court.

Polk County Assessor Robert Wagner had assessed the value of both properties at a total of

$75.4 million for the two years.

American Crystal filed two suits, one in April 2005 and one in March 2006, to have the amounts lowered. It contended the valuation process should have been based on sales, not cost.

Paul Bakken, an expert witness for American Crystal, said the assessed value for both properties for 2005 and 2006 should have been $23.6 million.

Sanberg found that, given certain problems in valuing the properties based on sales or income, the proper method would be the cost approach.

With this method, more than 50 percent of the cost of replacement of each property was deducted for depreciation and a quarter to a half of the remainder was deducted for “functional obsolescence.” The value of the land was added in to arrive at the final market value of each property.

In both cases, Sanberg found in favor of the defendant, Polk County, valuing the two properties at a total of $111 million for both years.

Polk County Attorney Greg Widseth and Polk County officials and attorneys are reviewing Sanberg’s decision.

It is unknown if Crystal will appeal the decisions.

Inforum searchword: American Crystal

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