Duluth’s Park Point residents air property tax concerns in wake of Cargill purchases
Around 100 residents of Duluth’s Park Point neighborhood crammed into a community center Wednesday evening to learn about St. Louis County’s upcoming process to assess the value of homes on the Point, and to voice concerns about soaring property taxes.
Park Point residents say they are stressed about rapidly rising property values, especially in the wake of several high profile purchases by billionaire Kathy Cargill, who has bought more than a dozen homes on the Point in the last couple years, and subsequently torn down most of them.
Many wonder whether the trend will only accelerate as more people discover the fragile sand bar that juts seven miles into Lake Superior, and whether anything can be done to help preserve the neighborhood’s uniqueness and ability of long-time residents to stay in their homes.
St. Louis County commissioner Annie Harala opened the meeting by acknowledging the “fear, anxiety and frustration” that has grown in recent months.
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But longtime Park Point resident Jeff Witrak wondered whether Cargill may have done the community a favor by mobilizing them.
“Because I believe she is the tip of the iceberg of all the wealth that’s going to come up to to Park Point,” said Witrak, who advocated for something similar to California’s Proposition 13, which limits how much property assessments can rise each year to no more than two percent.
Witrak, a retired physician, said he could afford tax increases. But he worries some of his neighbors, some of whom inherited their homes and live on fixed incomes, cannot.
“I believe we are headed to high value real estate up and down the Point,” said Witrak, and “I think the best we can hope for is to limit property taxes for folks that would otherwise be forced out.”
Residents have also voiced concerns about the increasing number of second homes and vacation homes on the Point, as well as the proliferation of short-term rentals — trends that took hold well before Cargill’s buying spree.
Out of roughly 500 properties on Park Point, county officials said 195 are classified as non-homestead, meaning they are not the homeowners’ primary residence.
St. Louis County officials stressed that any policy decisions to restrict how much property assessments could rise would have to be made at the state level.
“I don’t think anybody here is going to disagree with anything that you just said,” Assistant County Assessor Cory Leinwander replied to Witrak. “The only way to institute change … is through talking with your legislators.”
Appraisal Supervisor Anne Sims said the county’s job is to determine the market value of properties — the price a knowledgeable buyer would pay on the open market.
Officials do that by physically examining properties every five years — which they plan to do with Park Point homes this summer and fall — and also by analyzing actual sales of similar properties in the neighborhood, and in similar neighborhoods.
Many residents expressed concern that Cargill’s purchases, some of which were for above market value, would inflate their property values. Others worried that the subsequent demolition of homes would also have an impact.
In a letter written to Duluth-area state legislators before the meeting, one Park Point resident said their home’s value had risen by 81 percent since 2018.
County officials explained they only factor in sales they can verify as “arms-length” transactions, subject to open market conditions.
“For those people receiving letters at their door, with amounts without appraisals, with no reason for a number other than just an offer, and it’s never been verified? That’s not typical. We don’t use those,” said Sims.
But she cautioned that Cargill has purchased some properties that were available on the open market for anyone to buy. So they can’t issues a blanket statement, Sims said, that for any one homebuyer, “everything they purchase is out.”
County officials are also encouraging Park Point residents to consolidate their parcels. Many homeowners on the Point also own small parcels adjacent to their residence, which can make it tough to understand the valuation of the property as a whole. The county has a goal of consolidating 60 percent of all possible parcels by 2030.