Tax Tribunal Doc.pdf
Nicholas A Wilkinson Petitioner V City Of Ann Arbor Respondent · 26-002693-TT
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Appeal to adjust tax assessment on 1115 Fountain Street Date: 7/16/2026 Property owners: Nick Wilkinson nickwilkinson@rocketmail.com 734-834-9775 Anna Milanowski anna.milanowski@gmail.com 608-335-8777
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This appeal does not dispute that the construction of an accessory dwelling unit (ADU) increased the value of the property. Rather, it requests a review of whether the increase in State Equalized Value accurately reflects the property's True Cash Value under Michigan law. My original estimate of approximately $300,000 represented the total project expenditures and not the contributory cost of the ADU itself. After completing a detailed review of all project expenses, I believe the assessment should be reconsidered for the following reasons: • The original construction cost reported to the City overstated the costs attributable to the ADU. • The project consisted of both a personal-use garage and an ADU with many shared construction costs. • ADUs are a unique property type whose market contribution should not automatically be assumed to equal either construction cost or the value of a conventional home addition. • Certain expenditures included in the original project costs are not appropriate considerations in determining True Cash Value. There are several reasons that the property should be reconsidered. 1. The original construction expenditure that I provided to the city included the cost of an entire mixed-use structure containing both a personal-use garage and an accessory dwelling unit. Because the garage and ADU share a foundation, walls, roof, and infrastructure, many costs were necessarily shared. The revised cost allocation attempts to reasonably separate the contributory cost of the ADU from the costs attributable to the garage and other non-ADU components. I provided this original number because I admittedly am a novice in the area and didn’t realize what was being asked. My original $300,000 figure represented: ● site work, ● foundation,
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● framing, ● roofing, ● utilities, ● structure, ● labor, ● finishes, ● appliances, ● furnishings, ● solar, Many of these expenses served both the lower garage and the upper apartment and a portion of these costs should not be attributed to the ADU because they also created a personal-use garage that serves the primary residence. Here is a simple breakdown of numbers. I subtracted a third of the cost from the shared construction item between the personal use garage space and the ADU. A detailed spreadsheet of every expense of this project was kept and can be provided if needed. ● Original number provided to assessor: ≈ $300,000 ● Actual total spending: $312,356 ● ADU-related construction after removing personal-use and non-contributory items: $221,082 ● Assessor's implied market increase: ≈ $327,400 I mistakenly provided a total project cost that included many components beyond the ADU. I have since prepared a more accurate cost allocation. However, even that construction cost should be considered alongside the unique market characteristics of an ADU, which is not necessarily equivalent in market contribution to a conventional expansion of the primary residence. The property's assessed value increased substantially following completion of the project. I respectfully request a review of the methodology used to determine the contributory value of the ADU and related improvements. Which leads to the second reason: 2. An ADU has different market characteristics than a conventional addition
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Conventional Addition Accessory Dwelling Unit -Expands the primary residence -Separate dwelling unit -Increases the home's living area -Separate entrance and independent use -Easily compared to larger homes -Limited comparable sales -Broad buyer appeal -Appeals differently depending on buyer needs Our total property of livable square footage (including the original house and ADU is about 1628 sq. feet. This means the city is valuing our house at $423/sq.ft. The average price per sq. ft in Ann Arbor has a range of $280-320/sq.ft. (from Realtor.com) This figure would change based on location, quality of the property, etc. 3. Some cost should not be included in the reassessment Certain expenditures included in the overall project represented repairs, maintenance, or site improvements rather than improvements that increase the property's True Cash Value. These included items such as driveway work, retaining walls, and landscaping. Under Michigan law (Mathieu-Gast Act), these types of expenditures should not automatically be treated as additions to taxable value. 4. Comparables Accessory dwelling units represent a relatively new and emerging residential property type in Ann Arbor. Because there are few to no comparable sales involving ADUs, determining their contributory market value may require careful
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consideration of their unique characteristics rather than assuming they contribute value in the same manner as a conventional addition to the primary residence. I do understand that by looking at properties with no ADU that are similar could help give guidance to the value of the property. I would like to note that our original 990 sq.ft house has had no interior changes since the purchase of it in 2012. As it has certainly appreciated in value over time, it may not be as valuable as a newly renovated home that also has an ADU attached. So, again one must give careful consideration to every property individually. The ADU’s value must be supported by market evidence, not assumed. If comparable sales involving similar ADUs were relied upon in determining the property's value, I respectfully request that those sales be identified so that I may better understand how the contributory value of the ADU was determined. Requested Relief Based upon the corrected construction cost allocation, the unique characteristics of an accessory dwelling unit, the mixed-use nature of the project, and Michigan's requirement that assessments reflect True Cash Value rather than construction expenditures, I respectfully request that the Tribunal reduce the State Equalized Value and recalculate the Taxable Value accordingly. I would be pleased to provide any additional documentation, including detailed expense records, photographs, architectural plans, or other information that may assist the Tribunal in its review.