An adjustment is being made to the 18.43 acre Walmart parcel in Ladysmith, reducing its assessed value 8.47 percent for 2019.
It is the second property value decrease successfully sought by the company in the last three years. It is the third decrease since 2017 including a citywide revaluation last year.
The change is a result of new evidence presented regarding current market value of the property, according to city assessor Barrett Brenner of Chimney Rock Appraisal.
The latest adjustment will lower the store’s assessed value this year from $5,667,900 to $5,188,100.
Any change in taxes to the company will not occur until next year. Brenner said. There will not be an adjustment or refund for the current year, he said.
Company officials had been scheduled for a Ladysmith Board of Review hearing this week, but that meeting was canceled.
State law was changed several years ago to allow property owners to skip the board of review and appeal directly to court. However, the board of review can vote to deny that option.
Last week, the board of review denied a request filed on behalf of Wal-Mart Real Estate Trust to allow the property owner to appeal directly to Rusk County Circuit Court. It also denied the company’s request to testify by telephone or submit sworn written statement.
Any property owner has the right to appeal their assessment.
“They presented me with new appraisal information which I hadn’t had before, and based on that I made an adjustment,” Brenner said. “It is certainly within their right to appeal, and they are doing this all over the country right now.”
The impact will be more taxes paid for city, county, school and technical college taxpayers to make up the difference, according to Brenner. This could be offset by new construction, he said.
“You don’t know until those budgets are done and they come up with their mill rates, and that isn’t done until November,” Brenner said.
City officials did not comment.
The store had been assessed at $8.9 million as early as 2017. It was reduced to $6.23 million following an appeal in 2017 that refunded to the company $62,740 in property taxes. A citywide revaluation decreased the store value to $5.67 million in 2018.
This week’s Ladysmith Walmart assessment decrease to $5.188 million means the store’s assessed value has been dropped 41.71 percent in the last three years.
Opponents call these types of tax breaks to big box retailers the dark store theory that a few commercial property owners use to save themselves from paying their fair share of property taxes. Tax attorneys for big box stores use the dark store loophole to argue that the value of a new store in a busy, popular area should be based on the value of empty vacant stores. If a big box retailer uses the dark store loophole to cut the amount they pay in property taxes, then residents and other taxpayers have to pay the difference in order to maintain current city services.
Proponents of existing assessment laws cite aggressive assessors are using strategies to dramatically increase the taxable value of local businesses, resulting in larger than normal tax assessments. These companies challenge the illegal assessments in court to bring their taxable amount back to an appropriate amount.
A study conducted by the Wisconsin Policy Forum using data from the Wisconsin League of Municipalities showed that only $3.1 million was refunded in all business related property tax challenges in 2017. That represents 0.03 percent of property tax revenue collected, an infinitesimal portion of the tax. Local governments are still collecting over 99.9 percent of property taxes without incident.
“What the real problem is in my opinion is in finding good comps,” Brenner said.
The Ladysmith Walmart is about 100,000 square feet, and there is not much market demand for commercial properties this size outside the original owner, according to Brenner said.
“To find anything that is that big that sells that isn’t vacant is very, very difficult,” Brenner said.
They are built for a specific unique purpose, and once that purpose is no longer there it is not good for anything else without major, major upgrades,” Brenner said.
Unlike the last settlement, the recent property assessment decrease was not done through the court. It was habdled through conversations with city officials and the ci9ty assessor.
“They gave me new information concerning value, and I felt they had some valid points. Why put the city through the cost of going through that when at the end of the day it would have a similar result. I was trying to keep the city’s interests at heart, if you will,” Brenner said.