FARGO — The CEO and co-founder of biotechnology company Aldevron is appealing for the estimated value of his West Fargo mansion.
Michael Chambers, who sold the privately held company with his business partner for $9.6 billion last year, is asking officials to increase the taxable value of his home from $6.1 million to $3.4 million US Dollars, which he believes to be true market value as determined by two independent local appraisers.
Rob Manly, an attorney for Vogel law firm, which represents Chambers, told Cass County commissioners at their Board of Tax Equalization hearing Monday, June 6 that he was pleased to see the value placed in pending status became.
He said this would give time for Tami Norgard, an attorney who is investigating the home value issue and has written a 16-page report to the district, to liaise further with District Director of Compensation Paul Fracassi and West Fargo City Assessor Nick Lee. and hopefully to meet “amicably” to work out an agreement.
Fracassi said he has not yet viewed the property but will do so and the valuation will be discussed again when he makes a recommendation to the commissioners for a final decision on the value at their next meeting on Monday 20 June.
Generally, municipalities use the appraised value of a property to calculate how much property tax the owner will have to pay.
The dispute at hand revolves around the main house on the Chambers property, while Lee said the two sides are close to agreeing on the estimated value of the other house, which is on the property at the south end of Sheyenne Street.
Norgard said in her letter to Fracassi and the district commissioners that the main home, completed in 2020, is valued “well above any other home appraisal in North Dakota.”
She said one of the “key errors in the city’s calculation is that the city appraiser’s reliance on construction costs as evidence of market value is heavy.”
Planning permission for the property recorded a construction cost of $4.1 million.
West Fargo Mayor Bernie Dardis, hearing an earlier appeal by Chambers to the West Fargo Compensation Committee over the value, noted the building permit as the city council only lowered the value by about $13,000 and then forwarded the application to the county for final determination.
The proposed estimated value that West Fargo officials gave to Fracassi and the county commissioners was the main house at $4.8 million, the 8.7 acres of land at $872,200, and the other house and an additional metal building at $489,000 U.S. dollar.
Chambers’ application, based on independent estimates, puts the main house at $1.9 million.
However, Lee recommends not changing the value determined by the city.
The City of West Fargo Evaluator, in a letter to the Borough Commissioners, argued that Chambers suggests that “the value of these executive homes must be less than the cost, as they are highly individual and unaffordable for the general public. I agree with this line of thinking, but we differ on the amount of discount to apply.”
“At $1.9 million, the main house would be a discount of over 65% off our estimated replacement cost, and the property’s total value of $3.47 million wouldn’t even be the highest sale we’ve seen in the city.” have,” Lee wrote. “The main house valuation of the report submitted simply does not make sense with the most recent sales and therefore cannot be used as a basis for the adjustment of our balanced valuation.”
In her report, Norgard wrote that the property is “considered to be a high quality residential property with a very limited market for potential buyers, so it takes longer to attract qualified buyers. If the market value is less than the appraised value, it will be sold at appraisal.”
She argued that the appraised value exceeded the true value of the Chambers family home.
“In short, the City cannot use a computer model generated tax base value that is higher than the market would justify,” Norgard wrote.
“The city’s valuation does not reflect what a willing buyer would pay a willing seller for the property, particularly in the West Fargo market,” she wrote. “The city’s rating should not be adopted by the board and a downward revision is required.”
She pointed to other properties, including a home in South Fargo with an indoor pool similar to the Chambers home that is valued at $1.3 million.
However, County Commissioner Mary Scherling said it was “difficult to find anything comparable” to the Chambers home and that the city of West Fargo’s assessment was based primarily on what it might cost to replace it.
The Chambers family’s neighbors, Deanne Schatz and Michael Svaleson, are also taking issue with their property valuation. Their appraised value increased by $680,700 from $1.9 million to $2.6 million at the latest estimate.
Schatz said other neighbors didn’t have the same increases. Norgard is also representing these property owners and has drafted a seven-page objection, which is under further consideration.
When the sale of Aldevron was announced about a year ago, Danaher Corporation announced that it had an agreement to purchase the privately held company, which was a major producer of a key ingredient in the COVID-19 vaccine.
Founded in 1998 in a small lab on the North Dakota State University campus by Chambers and John Ballantyne, Aldevron has grown at what one top executive called “breakneck speed.”
Headquartered in South Fargo, the company employs approximately 600 people and manufactures high quality plasmid DNA, mRNA and proteins for biotechnology and biopharmaceutical customers engaged in research, clinical and commercial applications.
Forum reporter Wendy Reuer contributed to this report.