In the past several years, real estate developer Philip Chodur's interactions with Mason City officials have seemed to take two tacts: lawsuits and property assessment appeals.
From 2016 forward, he's filed two breach of contract lawsuits against the city related to the ongoing River City Renaissance hotel development deal.
And he's shown a propensity to fight how much he pays in property taxes by appealing the assessed value of his property. If he's successful in a current assessment appeal, he could see a reduction of $259,310 for a property acquired in 2017.
Since 2016, Chodur has appealed the assessed value of seven of the 21 parcels he owns in Mason City, according to Mason City Assessor Dana Shipley and property tax database company Beacon Schneider.
He's won one.
The net assessment value for 118 N. Federal Ave., which is $65,230, was appealed in 2016 and the value subsequently dropped to $60,780 because Chodur argued that there was no habitable multi-residential component to the building.
He settled an assessment challenge on three of the parcels from Marshall & Swift that were purchased for $125,000 in 2015, according to Shipley.
After buying them, Chodur was still able to get an average assessment reduction of 55 percent between 2015 and 2018. That's nearly $70,000 in value.
"I lowered the value of all three based on the demolition work he had done to gut the interior of the buildings. We settled the Iowa Property Assessment Appeal Board case on these three by agreeing on a revised assessment due to the demo work that had been done," Shipley said.
As of now, none of those areas have seen substantive development on them.
Shipley said that within the last year, the assessor's office did a large reappraisal project on residential property so overall, it had a larger number of appeals than usual.
"We had 72 appeals last year and that's out of about 13,500 properties," she said. "So it's actually pretty small."
However, she said it is uncommon for one property owner to appeal the assessment on multiple properties.
"Most taxpayers who own multiple properties might appeal one on occasion," Shipley said.
In February 2019, around the same time Mason City was served for the second time with a lawsuit from Chodur for breach of contract in the River City Renaissance deal, the developer again went before the Iowa Property Assessment Appeal Board to argue for a lower assessed value on parcels of land he owned in Mason City.
However, this time it wasn't as G8 Development but as Vulcan Gas Company LLC.
Vulcan maintains three holdings in Mason City, according to property tax database company Beacon Schneider. All three: a parking lot, an office building and a warehouse, are what once was the Alliant Energy building in and around 22 Second St. NW in downtown Mason City.
Vulcan signed the deal to purchase the three parcels from Interstate Power and Light Company (Alliant) for $300,000 on June 19, 2017, based on documents from the Iowa Property Assessment Appeal Board (IPAAB) and Beacon Schneider.
Philip's brother, Joe Chodur, acted as the real estate representative for Alliant Energy in the deal, according to Shipley.
Interstate Power, as Alliant, listed the three properties for sale at $299,000 on April 26, 2017. Vulcan made a cash offer of $300,000 on May 5, 2017, according to tax appeals board documents.
Chodur testified that Vulcan Gas made an offer just above the list price due to the expectation there would be multiple offers on the property and because it was needed for assemblage in a larger development project.
Appeals board documents list Chodur's intent for the parcels was "for assemblage and future hotel development."
Chodur bought several pieces of property in 2017 as part of a promise to build a hotel in downtown Mason City, with or without being part of the River City Renaissance project.
Vulcan's position before the appeals board was that the 2018 assessment of the properties totaling $409,310 was "not equitable compared with the assessments of other like property."
Vulcan, as represented in the proceedings by Chodur, argued that the subject parcel’s total assessed value should be $150,000 based on the reserve offer from Cerro Gordo County. That represents a 64 percent difference in assessed value.
In the appeals board hearing, Chodur testified there are few sales in the downtown area – there are 17 vacant buildings – and the area is economically depressed.
Beacon Schneider lists 11 of Chodur's properties as "vacant." Six of those are listed as vacant lots where G8 acts as the contract holder and Beck Higley LLC is the deed holder.
The other five are listed by Beacon Schneider as "vacant buildings."
And four of those five vacant buildings are in what Mason City Planning and Zoning maps would be considered downtown.
Of the 17 downtown buildings that Chodur argued are "vacant," four of the buildings are under the names of one of his companies.
In its March 12 ruling, the board found that Vulcan and Chodur had failed to show the subject parcels were "inequitably assessed, over assessed, or that there was an error in the assessments."
Furthermore, the board's "Findings of Fact, Conclusions of Law, and Order" flatly questioned Chodur's credibility.
In the document, board members Karen Oberman, Dennis Loll and Camille Valley wrote that Chodur's "hearing testimony suggested he previously made a false statement in a filing to the appeals board. Thus, to the extent it is necessary, we discount the reliability of his testimony."
Chodur has not returned multiple calls for comment on this story. He has 20 days after the decision to appeal the board's ruling on the Vulcan Gas properties to a district court.
Chodur is no stranger to the courts. His G8 Development has filed or threatened a series of lawsuits during his time as the on-again/off-again hotel developer for Mason City's downtown River City Renaissance project.
G8 Development had plans to work with Mason City as part of the River City Renaissance Project, but those plans were canceled after the city argued that G8 failed to perform its obligations under the development terms.
In July 2017, G8 filed one of its two suits against Mason City and the Chamber of Commerce Foundation in Cerro Gordo County District Court, claiming that the city was in breach of contract.
That same petition also argued that city officials were having "secret meetings" with certain members of the city council and encouraging them to terminate the G8 deal.
When G8 Development eventually found its way back in 2018 as the hotel developer in the River City Renaissance project, it was eventually cast aside again by city officials, this time for an alleged failure to show full proof of financing. That earned the city another threat of lawsuit in October 2018.
As of now none of Chodur's properties, including the Vulcan Gas parcels, have seen substantive development on them. Mason City's Development Services Department lists a roofing permit for 118 N Federal pulled in September 2014 and that is all.
But they have seen property value reductions, the results of his appeals.
Values on his properties from 11 to 15 Second Street NE went down by 6 percent since he purchased them in 2015.
A Chodur property at 118 N. Federal Ave. saw a percent change of 0.21. While that vacant lot had an assessed value of $60,780 in 2018, an occupied lot at 116 N. Federal Ave., with the same dimensions was assessed at $84,890.
A vacant G8 lot at 16 S. Federal Ave., was assessed at $81,070, while its vacant next door neighbor garnered a $97,380 assessment. Both had the same dimensions.
It is difficult to do exactly equal property comparisons because of the number of vacant properties downtown that are owned by Chodur and/or G8.
But if all of Chodur's appeals were successful it would amount to about $491,995 in potentially lost property assessment value.
Chodur Property Assessments
|Address||Bought In||Bought for||2014 Assessment||2015 Assessment||2016 Assessment||2017 Assessment||2018 Assessment||Percent change for assessment|
|118 N. Federal Ave.||2013||$54,000||$60,905||$65,230||$58,990||$60,780||$60,780||-0.21|
|16 S. Federal Ave.||2015||$79,500||$78,763||$73,770||$78,890||$81,070||$81,070||9.90|
|19 3rd St. NE||2015||$125,000 (for three Marshall and Swift parcels)||$79,650||$79,650||$44,270||$44,270||$44,270||-44.42|
|210 N. Delaware Ave.||2015||$125,000 (for three Marshall and Swift parcels)||$144,090||$144,090||$62,610||$62,610||$62,610||-56.55|
|214 N. Delaware Ave.||2015||$125,000 (for three Marshall and Swift parcels)||$162,860||$162,860||$55,070||$55,070||$55,070||-66.19|
|11-15 2nd. St. NE||2015||$125,000||$130,110||$130,110||$132,410||$122,200||$122,200||-6.08|
|S. Federal Ave.||2017||$200,000 (for six parcels)||$3,990||$3,990||$3,950||$7,900||$7,900||0|
|S. Federal Ave.||2017||$200,000 (for six parcels)||$4,620||$4,620||$4,570||$9,150||$9,150||0|
|S. Federal Ave.||2017||$200,000 (for six parcels)||$23,100||$23,100||$22,870||$45,740||$45,740||0|
|S. Federal Ave.||2017||$200,000 (for six parcels)||$15,960||$15,960||$15,800||$31,600||$31,600||0|
|5th St. SE||2017||$200,000 (for six parcels)||$27,720||$27,720||$27,110||$54,220||$54,220||0|
|S. Delaware Ave.||2017||$200,000 (for six parcels)||$24,150||$24,150||$10,100||$35,340||$35,340||0|
|401 S. Federal Ave.||2017||$40,000||$43,200||$43,200||$42,980||$28,970||$28,970||0|
|22 2nd St. NW||2017||$300,000 (for three parcels)||$0||$0||$0||$0||$295,730|
|N. Washington Ave.||2017||$300,000 (for three parcels)||$0||$0||$0||$0||$69,150|
|Vulcan Parking Lot||2017||$300,000 (for three parcels)||$0||$0||$0||$0||$44,430|
Still, Shipley said she had faith in the overall assessment appeal process and that the history of G8's and Vulcan's actions aren't likely to incentivize others.
"The appeal process is part of the assessment process," the Mason City assessor said. "And each year it's less than 1 percent of all the parcels that actually go to appeal. So there's such a small number that even get appealed. I don't think it's an incentive. It's a necessary thing. It's an opportunity to make corrections and get something right."
County Treasurer Pat Wright concurred with Shipley and didn't see constant assessment appeals as a concern for city and county coffers.
"Not even on the radar for any reason," Wright said. "By the time those evaluations get certified to the treasurer, which is two years later, the state has already adjusted the rollback on what you're actually taxed at. So it always washes out."
Assessment notices went out to property owners on April 1. From April 2 to April 25, there is an informal assessment review period with the assessor. Through April 30, the city assessor accepts assessment appeal forms for the Assessment Board of Review.
And then in May, the Assessment Board of Review is in session to act on a whole new slate of assessment appeals.