Roger Aspengren, Respondent,

This opinion is nonprecedential except as provided by
Minn. R. Civ. App. P. 136.01, subd. 1(c).

STATE OF MINNESOTA
IN COURT OF APPEALS
A20-0895

Roger Aspengren,
Respondent,

vs.

City of Eagle Bend,
Appellant.

Filed March 1, 2021
Affirmed in part, reversed in part, and remanded
Smith, Tracy M., Judge

Todd County District Court
File No. 77-CV-18-281

Michael J. Cass, Swenson Lervick Syverson Trosvig Jacobson Cass, P.A., Alexandria,
Minnesota (for respondent)

Joseph A. Krueger, Franz J. Vancura, Brown, Krueger & Vancura, P.A., Long Prairie,
Minnesota (for appellant)

Considered and decided by Frisch, Pr esiding Judge; Hooten, Judge; and Smith,
Tracy M., Judge.
NONPRECEDENTIAL OPINION
SMITH, TRACY M., Judge
Following a court trial in this special-a ssessment appeal, appellant City of Eagle
Bend challenges the district court’s order setting aside the assessments of respondent Roger
Aspengren’s properties and ordering reassessment . The city argues that the district court
erred by (1) determining that the cost-to-cure methodology employed by the city’s expert

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witness was not appropriate to value the speci al benefit and (2) failing to make factual
findings on the special benefit conferred by the project. We conclude that the district court
did not err by finding that the cost-to-cure method was not appropriate here because none
of the improvements was necessary for the continued legal use of Aspengren’s properties.
But we agree with the city th at the district court erred by not making factual findings on
the special benefit conferred by the project. We therefore affirm in part, reverse in part,
and remand for the district court to make factual findings regarding the value, if any, of the
special benefit.
FACTS
The following facts were established at trial. Over the past several years, the city
has been replacing and upgradi ng its aging and deficient road s and utilities. The costs of
the project were partially funded by special assessments levied against affected property
owners. Under city policy, affected property owners were responsible for 40% of the cost
of street, sewer, and water improvements, although the property owners’ responsibility for
road improvements was reduced to 15.25% after th e city obtained a dditional funding in
that category. The city calcula ted the special assessments fo r the street, sewer, and water
main on the basis of linear footage and the special assessments for the sidewalk on square
footage. It also assessed specific sums for new sewer service lines and water service lines.
Aspengren owned five parcels of land affect ed by the city’s project. Aspengren’s
parcels consist of two adjacent lots that ha ve no structures on them except for a single
billboard (the billboard lots) and three lots used for Aspengren’s business (collectively, the
business lots). The business lots include a lot with a store, an adjacent parking lot, and a

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lot with a warehouse located a block from the store and parking lot. One billboard lot is
encumbered by a highway right-of-way, and the other is encumbered by an easement. After
the city completed the improvements, Aspe ngren sold the business lots for $80,000. 1 He
continues to own the billboard lots.
Aspengren challenged the amount of specia l assessments levied against his five
properties, and a court trial was held on the sole issue of whether the amount of the special
assessments exceeded the special benefit to Aspengren’s properties.
At trial, Aspengren testified that his parc els did not receive a special benefit from
the improvements. He testified that he did not notice any problems with the water or sewer
services at the store before the improvements, nor did he notice any difference to the store’s
services after the improvements. Aspengren te stified that neither the parking lot nor the
warehouse lot used sewer or water services and therefore they received no benefit from the
improvements. As to the billboard lots, Aspengren stated that the lots still flooded after the
improvements were made to the property and the city implemented flood-mitigation
efforts. For that reason, he believes the billboard lots also received no benefit.
Aspengren also called a real -estate agent to testify a bout the use of Aspengren’s
properties and his knowledge about their mark et values. The real-estate agent is not a
licensed appraiser but has worked in real estate in and around the city for the past 30 years.
He explained that, in his experience, street, curb, gutter, or sewer sp ecial assessments do
not increase the value of the pr operty unless the property di d not have existing water or

1 Under the contract for land sale’s terms, As pengren is still respons ible for the special
assessments.

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sewer services. The real-estate agent furthe r explained that special assessments often
reduce the value of a property by acting like a lien against it. As to Aspengren’s properties,
he stated that the store lot is worth around $40,000 no matter the improvements and that
the adjacent parking lot did not receive a spec ial benefit because it does not use water or
sewer services. He also stated that the billb oard lots are unbuildab le because they are
subject to flooding; because of this, he concluded that whether they have water and sewer
access is irrelevant to their value.
On cross-examination, the real-estate ag ent was asked a hypothetical question about
the value of two properties, id entical except for the fact th at one was serviced by new
infrastructure and one by aging infrastructure. The hypothetical question asked whether the
properties would have equal value. The real-estate agent changed his answer several times.
Because of his confused answer to the hypothetical, the district court had reservations about
his credibility. Even so, it did not reject his testimony.
The city called three witnesses: the c ity administrator, a licensed professional
engineer, and, relevant here, a certified co mmercial real-estate appraiser. The appraiser
described three methods used to appraise commercial real estate: the income approach, the
sales-comparison approach, and the cost approach. The income approach values real estate
based on a property’s income -producing ability. The sales- comparison approach values
property by looking at comparable sales in the same market and determining an appropriate
value for the subject property. The cost approach values the improvements on the property
by considering the cost to make the improve ments and the current depreciation of those
improvements.

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The city’s appraiser explained that an in come approach was not appropriate here
because none of the proper ties was income-producing. Instead, he employed a sales-
comparison approach to determine the land valu e of the property and a cost approach to
determine the increase in value to the land from the improvements. Regarding the cost
approach, the appraiser used a “cost to cu re” method on the basis that the city’s
infrastructure was functionally ob solescent. He compared the to tal actual cost to replace
the infrastructure serving Aspengren’s parcels—the “cost to cure”—with the cost assessed
to Aspengren and determined that the difference between the actual cost and the assessed
cost represented the increase in value—or special benefit—that Aspengren received. The
appraiser did not conduct any appraisals of the parcels before the improvements.
The appraiser based his property evaluation on the highest and best use of each
property. The highest and best use of property will consider the total value of adjacent
properties under common ownership. The appraiser thus considered the store and parking
lots together and the two billboard lots to gether. While the appraiser accounted for the
billboard lots’ encumbrances, he did not account for the continued flooding, and he testified
that the flooding would reduce the value of his appraisal.
The district court determined that Aspengren had rebutted the prima facie
presumption that the special assessments on his properties were legal. In the accompanying
memorandum, the district court further explai ned that the city had failed to present
evidence showing that the improvements incr eased the value of Aspengren’s properties
more than the cost of the assessments because the cost-to-cure method was an inappropriate

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method in this case. The district court did not make any factual findings on the value of the
special benefit. Instead, it ordered the city to reassess the properties.
The city appeals.
DECISION
I. The district court did not clearly er r by determining th at a cost-to-cure
methodology was inappropriate to value the special benefit.

The city argues that the district court erred by determining that a cost-to-cure
methodology was not appropriate to value the special benef it conferred to Aspengren’s
properties. It cites caselaw permitting any va luation method to calcu late the value of a
special benefit so long as it is a fair a pproximation of the increase in market value, see
DeSutter v. Township of Helena, 489 N.W.2d 236, 238 (Minn. App. 1992), review denied
(Minn. Sept. 30, 1992), and contends that the cost-to-cure method fairly approximates the
increase here.
In the special-assessment co ntext, an appellate court reviews whether the district
court’s factual findings support its legal conclusions and decision. Carlson-Lang Realty
Co. v. City of Windom , 240 N.W.2d 517, 521 (Minn. 1 976). To justify reversal, the
evidence must contradict the district court’s findings. Dosedel v. City of Ham Lake , 414
N.W.2d 751, 756 (Minn. App. 1987).
A special assessment is a tax aimed at imposing local improvement costs on those
who benefit from the improvement. Buettner v. City of St. Cloud , 277 N.W.2d 199, 201
(Minn. 1979). State law grants municipalities the power to impose these assessments,
Minn. Stat. § 429.051 (2020); however, three conditions limit a municipality’s assessment

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power: “(1) the land must receive a sp ecial benefit from the improvement being
constructed; (2) the assessment must be uni form upon the same class of property; and
(3) the assessment may not ex ceed the special benefit.” David E. McNally Dev. Corp. v.
City of Winona, 686 N.W.2d 553, 558 (Minn. App. 2004) (citing Carlson-Lang Realty Co.,
240 N.W.2d at 519). The special benefit is measured by the increase in the market value of
the land caused by the improvement. Carlson-Lang Realty Co., 240 N.W.2d at 519 (citation
omitted). This difference in market value should be computed by determining “what a
willing buyer would pay a willi ng seller for the property be fore, and then after, the
improvement has been constructed. . . . If th e assessment is set hi gher than the special
benefit conferred, it is a taking without compensation to the extent of the excess.” Id.
The legislative nature of special asse ssments entitles them to a presumption of
validity. Am. Oil Co. v. City of St. Cloud, 206 N.W.2d 31, 36 (Minn. 1973). But a property
owner can overcome a special assessment ’s presumption of validity by submitting
competent evidence that the property did not benefit from the improvement, see Buettner,
277 N.W.2d at 204, or by submitting competent evidence that the assessment exceeds the
property’s market-value increase from the improvement, Tri-State Land Co. v. City of
Shoreview, 290 N.W.2d 775, 777 (Minn. 1980). If the landowner submits evidence
overcoming the assessment’s pr esumptive validity, and the assessing municipality also
submits evidence that the assessment is less than or equal to the market-value increase, the
district court must independently weigh th e parties’ conflicting evidence and make a
factual determination regarding the special benefit received. Carlson-Lang Realty Co., 240
N.W.2d at 519-20; see Tri-State Land Co., 290 N.W.2d at 778; In re Meyer, 223 N.W. 135,

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136 (Minn. 1929) (stating that evidence rebu tting the presumption of validity “raises an
issue of fact upon which normally the decision of the trier of fact will be final”).
The city does not challenge the district court’s determina tion that Aspengren
presented competent evidence sufficient to overcome the special assessment’s presumption
of validity. Rather, the city argues that it introduced competent evidence that the
assessments did not exceed the property’s mark et-value increase from the improvements
and that the district court erred by finding that the city’s evidence was not competent simply
because the district court disagreed with the city’s valuation method. The city maintains
that its evidence is sufficient to meet its burden.
The city relies on our decision in Lunderberg v. City of St. Peter , in which we
accepted the district court’s decision to use a cost-to-cure method in the special-assessment
context. 398 N.W.2d 579, 583-84 (Minn. App. 1986), review dismissed (Minn. Jan. 29,
1988). But Lunderberg does not compel the determination that the district court clearly
erred here. In Lunderberg, the City of St. Peter completed a sewer-improvement project,
and, through special assessments, adjacent pr operty owners were held responsible for the
“cost to inspect, repair and replace the service lines” that connected the main sewer line to
their individual properties. Id. at 580-81. It was undisputed that the replacement of service
lines was necessary for the continued legal use of the properties. Id. at 583.
Here, in contrast, the city failed to show that the improvements were necessary for
the continued legal use of Aspengren’s properties. The record includes evidence that three
of the five properties do not use sewer and wa ter services. And even if the two billboard
lots were to receive sewer and water services, there is evidence that the services confer no

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special benefit to the lots be cause they are unbuild able due to flooding. As to the two
properties that use sewer and water services, the record contains evidence that those
services did not need to be replaced and that the properties could be legally used absent the
improvements. The record thus supports the dist rict court’s finding that the city did not
establish that the cost-to-cure method used by the city’s appr aiser was appropriate in this
case.
II. The district court erred by failing to make factual findings on the value of the
special benefit.

The city argues that the district court erred by ordering reassessment of Aspengren’s
properties without determini ng the value of the special benefit conferred by the
improvements.
If a special assessment exceeds the special benefit, a taking has occurred. Ewert v.
City of Winthrop, 278 N.W.2d 545, 548 (Minn. 1979). If a district court determines that a
taking has occurred, it must set aside the assessment and order a reassessment. See Minn.
Stat. 429.081 (2020); Buettner, 277 N.W.2d at 204-05 (stating that the district court must
order a reassessment if it finds that a reduc tion is appropriate). Here, the district court
ordered a reassessment without first determining whether a taking occurred. This was error.
Instead, the district court should have ma de a factual determination as to whether
the amount of the assessments exceeded the special benefit to Aspengren’s properties. See
First Baptist Church of St. Paul v. City of St. Paul, 884 N.W.2d 355, 366-67 (Minn. 2016)
(citing Ewert, 278 N.W.2d at 548, 552 (stating that, after both parties present evidence on
whether a property’s market value has changed, “the district court [must] make a factual

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determination”)); Nyquist v. Town of Center, Crow Wing Cty., 251 N.W.2d 695, 697 (Minn.
1977), overruled on other grounds by Downtown Dev. Project, Marshall City Council
Resolution No. 57 v. City of Marshall, 281 N.W.2d 161, 163 n.3 (Minn. 1979); In re Village
of Burnsville Assessments, 245 N.W.2d 445, 451 (Minn. 1976). To do so, the district court
should have determined the value of the special benefit, as the city argues. On remand, the
district court must determine the value of the special benefit to determine whether the
assessments exceeded the special benefit and thus whether a taking occurred.
Affirmed in part, reversed in part, and remanded.