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Pennington County board sets 512 Main assessment at $2,000,194 after appeal
Summary
After a lengthy appeal and debate about methodology and basement rents, the Pennington County Equalization Board set the assessed value for MHL LLC's 512 Main Street (Main Street Square) at $2,000,194, reversing a lower local board allocation and falling below the county's original figure.
The Pennington County Equalization Board set the 2024 assessed value for MHL LLC's property at 512 Main Street — known locally as Main Street Square — at $2,000,194 following an appeal and extended discussion about appraisal methods and below‑grade rents.
County senior commercial appraiser Rod Sledden told the board the county's income‑approach model, built from downtown market rents and cap rates, supported a recommended assessment of $2,709,200 after the city board of equalization had previously reduced the prior assessment to $1,678,800. Sledden said the county shifted downtown properties to an income approach because cost tables and observed sales were producing inconsistent results across older, renovated and rundown buildings. "When I use true market rates I end up at that value of 2.7," Sledden said during his presentation.
Representatives for the property and an appraiser who prepared a fee‑simple valuation argued the local board's allocation and the appraiser's contract rents should carry weight. Property counsel and other speakers emphasized that portions of the building are rented at well below market rates, particularly roughly 3,000 square feet of below‑grade space charged at about $6 per square foot. They argued that subterranean space is not comparable to street‑level suites and that using contract rents produces a materially lower valuation.
Commissioners debated which inputs best reflect investor behavior: contract rents currently in place, modeled market rents for downtown, or sales comparables. The board twice voted on different proposed assessed values: an early motion to set a midrange number failed on a 2–2 tie, and after a successful motion to reconsider the board later voted to adopt an assessment of $2,000,194.
Sledden said the county's dataset for downtown included more than 50 comparable leases limited to the Main and St. Joe corridor and that typical market base rents clustered around $8–$13 per square foot. County materials also showed sales comparables producing per‑square‑foot figures that supported the department's recommended range. Appellants said their submitted appraisal (by Ken Simpson) used actual contract rents and produced a higher aggregate value for several contiguous parcels; they urged the board to respect those contract rents and the appraiser's professional judgment.
The board's action applies to tax ID 37327 for the parcel at 512 Main Street. The local board's reduced assessment of 1,678,800 remains the standing local decision until this county board vote is entered in the minutes and processed.
Board members and staff noted that the dispute centered chiefly on whether basement/subterranean rents should be modeled separately or subsumed into a broader quality ranking that accounts for location, windows and access. Sledden described the county practice as grouping suites by quality (low to excellent) rather than assigning a unique basement rent rate.
The board did not direct additional staff follow‑up beyond recording the assessed value; any party wishing further review may pursue formal appeal channels described in county appeal procedures.
