WAUKESHA - Mayor Shawn Reilly
recently traveled to the state Capitol to give favorable testimony
for two bills that would curb big-box stores asking for lower tax
assessments based on the "dark store theory."
At least eight big-box stores
or pharmacy chains are at various stages in tax assessment appeals
with the city, challenging their property tax assessments and asking
that they be compared to vacant stores, which could cut property
taxes by up to 50 percent in some cases.
Reilly testified before the
Assembly Ways and Means Committee in support of Assembly Bills 386
and 387, along with other mayors from across the state. He told the
committee that the bills are needed to curtail "unfair and ongoing"
property tax shifts that are placing higher burdens on homeowners
while saving big box retailers money.
Among the stores that have
benefited from the "dark store" strategy in Waukesha are Menards,
Walmart, Target, Walgreens and Woodman's, Reilly said.
- In 2006, Menards paid $14
million for its property. Menards took out a building permit to
build its store, showing the cost to build as $7 million. Menards'
current opinion of value is $8.26 million.
- In 2008, Walmart paid $8.25
million for its property. Walmart took out a building permit to
build its store showing the cost to build as $10.5 million.
Walmart's 2017 Board of Review objection form indicates that its
opinion of value is $8.87 million.
- In 2008, Target paid $2.62
million for its property. Target took out a building permit for its
store showing the cost to build as $7 million. Target's most recent
court filing indicates its opinion of value is $5 million.
- After a Wisconsin Supreme
Court ruling upholding Walgreens' argument that their actual sale
prices don't reflect market value and taxes should be assessed based
on their leases, Waukesha settled with Walgreens at approximately
$2.5 million for each of the four stores in the city. The Walgreens
store on Madison Street sold in 2012 for $4.9 million. Because of
the court ruling, Waukesha is not able to increase the assessed
value of any Walgreens based on that sale.
- In 2012, Woodman's paid
$11.8 million for its property. Woodman's took out a building permit
to build its store, showing the cost to build at $12 million.
Woodman's 2017 Board of Review objection form shows that its opinion
of value is $14 million.
When large retailers receive
property tax breaks there is a shift in taxes to homeowners in the
municipality, though it's unclear exactly how much.
Waukesha City Assessor Paul
Klauck said the burden placed on residents depends on how much the
stores settle for and how long the mediations take. Waukesha is in
mediation with Menards, but there's no telling how long that process
will take with other big box retailers, making it impossible to come
up with a dollar amount.
Since the first committee
hearing on June 29, no action has been taken on the bills.
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