Walmart wants city to lower assessment, again

Multi-national retailer wants $2 million drop in property tax assessment

The city of Medford is laying the groundwork for a potential legal battle with Walmart over property tax assessments.

Walmart is seeking to lower its property tax assessment from the current $6.4 million to $4.65 million. If the multinational retailer is successful in getting the assessment lowered, other taxpayers in the city would have to pick up the difference and the city would have to refund Walmart for what was overpaid in the current tax year.

On Friday, Walmart representatives filed paperwork with the city to bring it to Tuesday’s board of review meeting. At the meeting board members had the choice of either hearing their argument and making a ruling on the assessment or allowing it to go directly to circuit court. Based on what has been done in other communities, regardless of the board’s decision, it was expected that Walmart would take the next step of appealing to circuit court.

This is not the first time Walmart has sought to lower its assessment in the city. In 2017, the city and the retailer settled on a negotiated agreement prior to a court case proceeding to set the assessment at the current level up through the 2021 assessment. The argument at that time was based on the so-called dark store loophole in Wisconsin’s property tax codes which allows a commercial property to argue that their property value should be reduced due to vacant stores in that or nearby communities. Municipalities counter that argument noting that an operating store is inherently more valuable than a vacant store.

What has changed this time is that municipalities have begun to win court battles on the issue and a case, Lowe’s Home Centers, LLC v. City of Delavan, has advanced to the Wisconsin Supreme Court which will hear testimony in late September. The outcome of that case will have broad impact on Walmart’s request with the city as well as on numerous other communities in the state facing the same sort of battle.

At Tuesday’s board of review meeting, members voted 6-1 to waive a hearing on request. The vote came after a lengthy discussion with member Mike Bub arguing that they should go through the board of review hearing if only to hear what the other assessments Walmart is basing their arguments on.

“We need to have the hearing to know what their argument is,” Bub said.

Assessor Josh Spatz, a system solutions coordinator with Accurate, the city’s assessing firm, advised the board to waive the hearing and send it directly to circuit court. He said in cases involving millions of dollars it was better to have it go directly to circuit court.

Board member Ken Coyer agreed with the assessor’s opinion noting that anything the board said during the hearing could be brought up in court potentially resulting in members being called to testify.

“Why would we want to go to court without knowing what their comparables are?” Bub asked.

Spatz explained that in the court case, the judge would review the relevant information to reach a decision. Bub countered that the relevant information is that the comparables were not included in Walmart’s paperwork. He suggested they have Walmart have to make their case before sending it to circuit court.

Board member Greg Knight who was running the meeting in the absence of mayor Mike Wellner, expressed concern that any other comment made could muddy things.

“Not if you don’t open your big mouth,” Bub replied.

Knight disagreed saying it would add complexity and wouldn’t do anything but give additional information for the lawyers to review. “Why are we going through an extra step if we are going to court anyway,” Knight said.

“I don’t know why we are trying to streamline the process for Walmart,” Bub said noting they should be looking out for the other city taxpayers.

“For us to spend extra time is sort of wasted time,” Knight responded saying that he did not feel they were letting Walmart off the hook since the case before the Supreme Court will determine how lower courts rule on the issue.

The city will be represented by an attorney with the League of Wisconsin Municipalities. The city carries legal insurance through the League which will cover costs up to a set threshold amount.

“The last time, we lowered their property taxes and increased the taxes of our residents. That is what happened. That is a statement of fact,” Bub said of the 2017 agreement.

In the end, the board voted to waive the hearing and send it to circuit court.

In other action at the board of review, board members heard from Gary Levin of 442 West Broadway Ave. who came seeking relief from an error under previous assessments. He said he had been being assessed for his neighbor’s garage that the assessor incorrectly had listed on his property. He came to the open book session and had it fixed for the coming tax year, but noted it has been that way for the past three years and was looking for some relief. Spatz said the process will be for Lavin to be refunded for the past two years as state law allows and have the correct property owner billed for the value of the structure. The board took no formal action on it, but directed city clerk Ashley Lemke to work with the assessor to get the process going for the refund.

“The last time, we lowered their property taxes and increased the taxes of our residents. That is what happened. That is a statement of fact.” — Mike Bub, Medford alderman