With plans for the county to exchange its 59 parcels of land in the Boundary Waters Canoe Area Wilderness (BWCAW) with U.S. Forest Service landholdings outside the wilderness, County Assessor/Land Commissioner Mary Black sought approval from the county board on December 13, 2011 to hire the county examiner of titles to prepare a title insurance commitment.
A title insurance commitment ensures a party procuring land that any problems with ownership of that land will be covered by insurance if they become known after the land transaction has taken place. Dick Swanson is the county’s court-appointed examiner of titles, and Baiers Heeren, Scott Smith, and Steve Steinle are the county’s deputy examiners.
According to Minnesota Statute 508.12, “The judges of the district court shall appoint a competent attorney in each county within their respective districts to be an examiner of titles and legal adviser to the registrar in said county, to which examiner all applications to register title to land are referred without further order, and may appoint attorneys to serve as deputy examiners who shall act in the name of the examiner and under the examiner’s supervision and control.…”
Commissioner Sue Hakes asked why the county attorney’s office couldn’t handle this work, which is expected to cost $3,000-3,500 if it’s done by an outside firm. The statute on county examiners of titles goes on to say, “Notwithstanding any provision of this section to the contrary, in all counties other than Hennepin, Ramsey and St. Louis having a full-time county attorney, the county board by resolution may provide that the county attorney shall also be the legal adviser to the registrar in said county.”
Land Commissioner Black did not know if the county attorney’s office had been authorized to act as an examiner of titles. She said the Forest Service is doing numerous land trades, and in order to keep the process rolling, requested that the county submit its title insurance commitment by Christmas. County Attorney Tim Scannell was in court attending to a jury trial and could not be reached during the meeting to see if his office could do the work. Waiting until the next county board meeting on December 27 would not leave either his office or a private firm much time to complete the work.
The board gave its approval for the office of Swanson & Heeren to do the work.
Hotel reclassification
Scott Mehlhaff and Chris Holland-Mehlhaff, owners of Best Western Superior Inn and Suites in Grand Marais, had a rather shocking surprise when they got their estimated tax bill for 2012. The taxes on their property, which is in two parcels, went from $38,818 in 2011 to an estimated $96,526 in 2012.
The reason for the big jump was that their classification had gone from “seasonal resort” to “commercial” based on a questionnaire sent out by the Assessor’s Office that their bookkeeper had answered on their behalf last winter. The questionnaire simply asked, “Do you offer onsite recreational activities such as ‘renting ice fishing houses, boats and motors, snowmobiles, downhill or cross-country ski equipment; provide marina services, launch services, or guide services; or sell bait and fishing tackle’ (MN Statute 273.13 Subd. 25)?” The bookkeeper answered no.
In order for a business to qualify at the lower tax rate of a seasonal resort, it must offer recreational activities.
The Mehlhaffs wrote a letter to Assessor Black and the county board saying that their bookkeeper had misunderstood the question and sent it in without consulting them. The letter stated, “Many guests use our convenient lakefront location as their center point for enjoying recreating activities that the North Shore and Grand Marais offer.” They sell Lutsen Mountains lift tickets and vouchers for discounted golfing at Superior National at Lutsen Golf Course, arrange dog sledding adventures, refer guests to Stone Harbor Wilderness Supply if they want to rent things like kayaks or cross-country skis, rent out snowshoes, offer the use of bicycles free of charge, host bonfires on the beach, and facilitate snowmobiling by providing a lot for snowmobiles and trailers across the street.
Black told the board that while state statute states that properties that are open more than 250 days a year do not qualify as seasonal resorts, court precedent has resulted in businesses qualifying if they can show that individual rooms have not been rented out that many days. The Mehlhaffs explained that the majority of their rooms are rented out during the summer season and that their rooms are not rented out more than 250 days a year.
Commissioner Hakes said she had a hard time seeing this as a seasonal resort. Assessor Black said they meet the requirements, as do several other motels and hotels in Grand Marais.
The board approved an abatement in taxes for the Mehlhaffs as well as reclassification of their property back to its former seasonal resort status.
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