Federated Retail Holdings, Inc. v. County of Ramsey
Minnesota Supreme Court
820 N.W.2d 553 (2012)
- Written by Rose VanHofwegen, JD
Facts
Dayton’s agreed to build a mall-anchor department store and lease space beneath it from the mall’s owner. The lease gave Dayton’s an exclusive right to use basement space for store operations assignable to future owner of the store. The leasehold included common areas, Dayton’s offices, and additional retail space. Dayton’s sold the store to Federated Retail Holdings, Inc. (plaintiff) to convert to a Macy’s, and assigned the lease to Federated. The County of Ramsey (defendant) assessed the store’s taxable value to include the value of the leasehold interest. Federated filed tax appeals arguing the taxable value should not include the leasehold. The tax court found that Federated’s ownership interest in the store included the value of the leasehold interest because it entitled Federated to use a large adjoining space rent-free. However, the tax court concluded that the assessor could not include the leasehold value because the two parcels had never been properly consolidated using the requisite statutory process, so the tax court lacked jurisdiction over the leasehold. After the parties appealed, the Minnesota Supreme Court confirmed it held subject-matter jurisdiction over the leasehold before resolving whether the tax parcel should include it.
Rule of Law
Issue
Holding and Reasoning (Dietzen, J.)
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