A case with the potential to dramatically alter the Itasca County tax base is moving slowly through the court system.
On Jan. 29, Minnesota Tax Court ordered Blandin Paper Company to revisit property valuations it submitted to the court in a bid to have its local property tax burden eased.
At issue is the valuation of approximately 187,000 acres of forestland owned by Blandin Paper Co. in Itasca, Aitkin, Koochiching and St. Louis counties.
Blandin Paper Co., owned by Finnish-based UPM, made numerous filings in 2010, 2011 and 2012, challenging its land values, according to information from the tax court and the Itasca County Attorney’s Office. Many of those individual filings were consolidated for trial.
The difference between county calculated valuations and the paper company’s is large. According to tax court documents, Blandin presented evidence to the court that the aggregate values “exceeded the market value of the subject property under the unit rule ($52 million for 2010 and $25.8 million for 2011).”
While the counties used a single parcel methodology for valuations, appraisals by an independent firm used a single economic unit method, which the company contends is more accurate for forestlands.
While the case has the potential to ease the tax burden for the paper company it also has the potential to leave a large shortfall in county revenues. The Itasca County assessor concluded last year that if the company is successful in tax court, the total tax loss to Itasca County would amount to $2.3 million for 2010 and 2011 as well as an additional loss of $1.2 million for 2012 taxes.
The Jan. 29 order directs the paper company to recalculate a per-acre value for each affected county as a whole for both 2010 and 2011. The order doesn’t decide the case, but a further hearing on the case will be scheduled once the new allocation method has been applied.
Because the case is still pending, Blandin Paper Co. General Manager Joe Maher declined to comment further.
Itasca County Attorney Jack Muhar said his office was in the process of analyzing court documents on the case.