PROPERTY TAXES: Crystallized During Court
September 21, 2005
By Ryan Bakken, Herald Staff Writer

American Crystal, Traill County stalemate in dispute

HILLSBORO, N.D. - The staredown between American Crystal Sugar Co. and the Traill County Board of Commissioners continued here Tuesday with neither side blinking.

The ongoing issue was the sugar beet processor's property taxes for its plant in Hillsboro, the county seat. On the table was a district judge's ruling that was one-sided in the county's favor.

Neither side was ready to accept the ruling yet, leading to the possibility that the matter could proceed to its final destination the state Supreme Court. That was in keeping with the past, when neither side was willing to make a negotiation offer first.

American Crystal sought to have the value of its factory in Hillsboro lowered by 80 percent from $28 million to $5.7 million. East Central District Judge Stephen Marquart sided with the company on only two points, which would drop its valuation by $3 million or $5 million, depending upon the value placed on some land.

So, the tax abatement hearing resumed Tuesday, with neither side either accepting or rejecting Marquart's ruling. Crystal attorney Wick Corwin made it clear from the start that his client still was deliberating on whether to appeal to the Supreme Court. That position contributed to a similar reluctance from the majority of commissioners.

One fear was that if they formally accepted the judge's decision, the move could come back to haunt them if it went to the higher court. "Sitting in the record, it could get tossed back in their faces," said Stuart Larson, state's attorney.

Also, some commissioners weren't willing to concede the two points that American Crystal won. One company victory was that some bins were reclassified as machinery rather than taxable real property. The other was that the factory's 696 acres should be classified as agricultural land rather than commercial.

"If that isn't commercial property, I don't think we have a hunk of commercial land in North Dakota," commissioner Arne Osland said. "And if bins are personal property, then we have a lot of personal property in the state."

Commissioner Ron Peterson was looking for a response from American Crystal. "If we knew this was the end of the road for American Crystal, it would be easier to make a decision," he said. "We're sitting here with a door between us, and it's a very cold door. We need to get through that door."

Although he also thought commissioners were correct on all of the tax questions, Peterson was willing to make a unilateral move.

"It's been such a slow dance by both sides," said Peterson, a Crystal stockholder. "There's a horrible reluctance on both sides to make a decision. We have to be big boys some time and make a decision."

But Osland said legal experts, not commissioners, should decide tax matters.

"When we appeal to the Supreme Court, then it's done," he said. "I don't think we should be making policy. Plus, I just can't get to the other side."

Corwin asked commissioners for a concession regarding the agricultural land value. Instead of assessing it at $1,260 an acre based on market value, he said the 696 acres should be assessed at a rate of $550 an acre because of its productivity value.

Corwin said he arrived at the hearing with the hope of getting "a straight up-or-down answer" from the commissioners on the judge's decision.

Neither side was willing to show its hand Tuesday. The deadline for appealing to the Supreme Court is Oct. 30.

"I fully expect it to end up there," Osland said.

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