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<br />Pequot Lakes Staff Report 7(a) - 1 <br />April 16, 2015 <br /> <br /> <br />NEW BUSINESS- Blaine Jones Lot Consolidation <br /> <br />Agenda Item: 7 (a) <br /> <br />Background Information: In April, 2014 Blaine and Lee Jones received <br />approval for a Variance to expand a non-conforming structure. One of the <br />conditions of approval was 3. In accordance with Section 4.3 “Use of Pre- <br />Existing Lots,” Lot 1 and 2 shall be consolidated before a land use permit is <br />issued for the subject property.” <br /> <br />Mr. Jones contacted the Crow Wing County Auditor-Treasurer’s Office to fulfill <br />this condition. He was informed that consolidation of lots impacts the tax <br />calculations differently, depending on the tax classification of the property. For <br />instance, if the property is classified as Residential Homestead, there is no <br />change in the tax calculation, the tax amount is exactly the same whether an <br />owner has 5 lots or consolidates them into 1 lot. <br /> <br />However, properties with a tax classification of Seasonal Recreational Residential <br />(cabins), the state prescribed formula allows for a slightly lower tax calculation <br />on the first $76,000 of market value per lot. So, if a person owns multiple lots, <br />they get this benefit on each lot. If they consolidate lots, they would only get this <br />benefit on the one consolidated lot. <br /> <br />Mr. Jones’ lots are classified as Seasonal Recreational Residential, so his tax <br />would increase if he consolidates his lots. The Auditor-Treasurer’s Office <br />provided the following information, based on his estimated 2015 taxes: <br /> <br />All 3 lots taxes individually: <br />Lot 1 - $ 224.00 <br />Lot 2 - $1,734.00 <br />Lot 3 - 788.00 <br /> $2,746.00 <br /> <br />If all 3 lots had been consolidated into 1 lot for 2015 taxes, the tax would have <br />been $2,850.00, a $104.00 increase. <br /> <br />If only lots 1 and 2 had been consolidated for 2015 taxes (per the Variance <br />Condition), instead of $1,958.00 tax on the 2 individual lots, it would have been <br />$1,982.00, a $24.00 increase. <br /> <br />Mr. Jones has asked the Planning Commission to review the Ordinance as it does <br />result in increased taxes which could be an issue for some property owners. The <br />Auditor – Treasurer’s Office agreed with Mr. Jones, stating when municipalities <br />require consolidation, “oftentimes the taxpayer is receiving negative results. <br />More discussion on this topic is needed.”