The four-year-old building is the third-highest valued office building Downtown. It's a case that was watched closely by area tax officials and the commercial real estate community.
Judge Kathleen Sanberg tilted heavily toward the values suggested by the city rather than those put forward by petitioner EOP-Nicollet Mall. Equity Office Properties attorneys argued in a three-week trial last summer the property should have been assessed at $86.3 million in 2000 and $105.6 million in 2001. City assessors put the values at $114.8 million in 2000 and $132.6 million in 2001, and they argued for higher values in a post-trial brief. Sanberg fixed the values at $114 million for 2000 and $127 million for 2001.
As the office market has slumped and vacancies have risen, many property owners have appealed their assessments. Such appeals are usually settled before they reached the courtroom.
EOP sold the property to Atlanta-based Wells Operating Partnership in April 2003 for $174 million. The price was not regarded as the best indicator of value because the building wasn't completed at the time of the disputed assessments. The building landed long-term leases from US Bancorp and Piper Jaffray in the late 1990s, when the market was much more favorable to landlords than it was during the time of the contested assessments. The city's view is that the building's value should reflect the prospects of a market upturn rather than EOP's belief that the downturn could last much longer.
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