Rochester businesses protest assessments

Several private property owners in Rochester have hired a lawyer to represent them in objecting to nearly $200,000 in special assessments by the city for the reconstruction of 16th Street Southeast.

The nine properties, owned by eight different entities, are located across from the Olmsted County fairgrounds between South Broadway and Third Avenue Southeast. They include the Clarion Inn hotel, the Rochester Family Medicine Building, K & M Glass and an old house that's been converted into apartments.

The assessments range from $8,847 to $49,543. The city also is assessing Olmsted County $360,555 for the work. The overall cost of the reconstruction project is approximately $2.5 million.

The private property owners object to the assessments because the reconstruction of 16th Street will not increase the value of their properties nearly enough to warrant what the city is asking them to pay, said attorney Rob Stefonowicz, of Larkin Hoffman Attorneys in Minneapolis. He is one of the lawyers representing the owners.

A special assessment must produce a "special benefit" for the property — that is, increased property value — and the assessment cannot exceed the special benefit, according to Minnesota statute, Stefonowicz said.


"So, the city can do the improvements to the street, but they shouldn't be asking the property owners to pay for it through special assessments. They have other funding sources that can pay for it," he said.

If the city council approves the assessments, Stefonowicz said his clients will challenge the city in district court.

However, Rochester Public Works Director Richard Freese said the special assessments are nothing different than the city does with any other street reconstruction project, and the owners will have to pay.

"The city assesses all abutting property owners when we reconstruct a street. It's been city policy for decades that there is a local benefit to the abutting property from any street improvement. And the city goes through the process as prescribed by statute to do that," Freese said.

All property owners, residential and commercial, pay the same rate of $147.45 per foot of frontage, he said.

As for the assertion that the street improvements will not increase the property values by as much as the assessments, Freese disagrees. He used a house's roof as an analogy to explain.

"A new roof on a house adds value to the structure. In the case here, the street is an improvement to the property," he said.

Using the term "curb appeal," he explained how property values are higher on streets that are in good shape than on those with potholes, standing water and other problems.


Also, Freese pointed out that the city is assessing the property owners for a fraction of the overall cost of the project — about 20 percent, he said.

"From a policy perspective, the city council has said for years that the abutting property owners on each side of the street should pay 25 percent of the cost and the city — the rest of the taxpayers — pays the other 50 percent," he said.

The city council will have an assessment hearing for the 16th Street Southeast project during its regular meeting April 1.

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