Moorhead-based American Crystal Sugar Co., is asking for an 80 percent reduction on its property taxes at its facilities in Traill County, N.D.

The reductions in property value sought by the sugar beet company would lower its tax bill for 2001, 2002 and 2003 by more than $1 million.

American Crystal’s appeal in Traill County is part of the company’s broader strategy to contest the government-set value of all its properties, including its processing plant and corporate headquarters in Moorhead.

Representatives of the sugar beet processing company told Traill County commissioners in tax hearings Thursday and Friday that the Hillsboro plant should be valued at $5.7 million for 2001, 2002 and 2003.

The county set the plant’s value at roughly $27 million each of those years. American Crystal’s request is a dramatic departure from the company’s own numbers in October 2003.

In its tax abatement application then, the company said the Hillsboro factory was worth $12.4 million in the 2001 tax year, $10.9 million in 2002 and $17.2 million in 2003.

American Crystal says comparable sales of other sugar beet processing plants in recent years have been about one-half of the valuation of the Hillsboro plant.

It also says the county should consider an uncertain sugar marketplace, with the Central American Free Trade Agreement likely meaning more imports and less demand for sugar. “It’s a tough time for us,” American Crystal treasurer Sam Wai said.

The factory needs about $4 million in maintenance, which should further lower its value, company officials said.

American Crystal did offer a settlement of sorts in its final statement Friday, said county tax director Jodi Buzick.

Company officials said they would be willing to pay in full the tax bill they are protesting if the county sets a value for future years agreeable to both parties, Buzick said.

“If we agree to negotiate with Crystal, they’ll leave 2001, 2002 and 2003,” she said.

Corwin said Thursday he hoped company and county officials could agree on some sort of deal.

“When this is all done, we hope they will sit down with us and (negotiate),” he said. “This is not an all-or-nothing thing.”

In her testimony Friday, Buzick refuted arguments made the day before by American Crystal.

Buzick said the county can not figure in the sagging market for sugar because company officials did not provide the county with the information about its income.

The sales of other plants American Crystal cited Thursday concerned a company that was unloading assets because it was nearly bankrupt, Buzick said.

Because it had no reliable information to set the plant’s value based on sales of other sugar processing plants or the strength of the sugar market, Traill County valued the property based on its cost, she said.

The company paid its 2003 taxes under protest, meaning the money is in a special fund and is not available to the county, township or school board. Its 2004 taxes also will be paid under protest, Wai said.

Between the two years of withholding, the Hillsboro School District alone is without more than $500,000 in revenue. The school has had to borrow $100,000 to operate and soon will need to borrow more, Superintendent Mike Bitz said.

Buzick said the Traill County Commission will meet Jan. 18 to set a date to make a decision on American Crystal’s appeal. If the county and the company cannot agree, the issue will go to court.

Pembina County will meet with American Crystal officials Monday for the tax abatement hearing on the factory in Drayton. American Crystal’s appraisal on that plant is $5.2 million. The county’s appraisal is $15.1 million.

The company’s challenges in Polk and Clay counties went straight to Minnesota’s tax court.

Judge Kathleen H. Sanberg granted Polk County’s motion to dismiss American Crystal’s challenge on Dec. 2, citing a technical error in the company’s petition to the court, according to a ruling listed on the tax court’s Web site.

Attorney Marc Manderscheid of St. Paul represented Polk County and continues to represent Clay County in tax court. He could not be reached for comment Friday.

In Clay County, officials expect a ruling later this month on the county’s Oct. 27 motion to dismiss the case, said Assistant County Attorney Michelle Winkis.

The Association Press contributed to this story.

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