Eric Shutes of West Bend
crosses the street at the intersection of Paradise Drive
and 7th Avenue on Tuesday morning near the Menards in
John Ehlke/Daily News
West Bend officials once again express their support for
legislation that would address property assessments
issues concerning corporate retailers, but it occurs
against a backdrop of frustration regarding the process.
Common Council members voted to approve a resolution
during the Feb. 19 meeting, encouraging Gov. Scott
Walker and members of the state Legislature to pass two
bills introduced by State Sen. Duey Stroebel and State
Rep. Robert Brooks, that will address lawsuits filed by
corporations to reduce their property assessments.
“The League of Wisconsin Municipalities put this
information out, this sample resolution,” Administrator
Jay Shambeau said. “You guys have already passed at
least two of them encouraging the legislature to adopt
resolution conveys the concerns that have been
introduced for at least a year as the two bills were
making their way through the bicameral. It referenced
the burden of property taxes on homeowners, who pay
almost 70 percent of the total property tax levy, the
lower market values of national chain retailers that
shift the tax burden from businesses to residential
the time city officials voted on the resolution, the
state was in the waning days of their session — and many
state representatives, advocacy groups and municipal
officials were hoping for passage of the two measures
considering the increased time pressure.
know the mayor personally has expressed frustration with
leadership within our legislature,” Shambeau said. “It
appears the votes are there but are just unwilling to
put it on the floor to get it to a vote.”
Advocates will have to wait longer for passage since
there were not enough supporters for the two bills, each
attempting to address a separate concern among municipal
officials regarding the valuation of commercial
properties by larger retailers.
John Soper, Stroebel’s chief of staff, said legislators
were close to passage on the bills late in 2017, but
they were a few votes shy of securing approval. They
continued working, but it became apparent that, although
close, there were not enough supporters.
the legislature closed, advocates must wait until 2019
when the state senators and representatives convene once
again to take up the issue.
Brooks’ legislation dealt with the dark store issue, the
term used by many to describe attempts by retailers
seeking to reduce their property tax valuations. Company
representatives, including some in West Bend such as
Walmart, Shopko and Menards, have challenged the
valuations regarding properties they own in the area —
claiming they are higher than they should be.
Assessors have valued the locations using comparable
retail shops that are operating, but the retailers have
argued their properties should be assessed when they are
empty or “dark.” They refer to a supreme court case
where the jurists sided with the retailers. Their
property valuations, and consequently the property taxes
that were levied by the municipalities, were lowered.
Others have sought to use that ruling to have their
assessments and taxes reduced — creating a series of
lawsuits that cities, towns and villages must address.
Stroebel’s bill deals with properties with lease
agreements, those such as Walgreens that is also located
in West Bend. In stores such as these, company
representatives work with contractors to develop the
properties to specific standards. They will then
establish lease agreements with another party to will
cover associated expenses that include operating and
development costs. The retailers have argued the lease
payments, the steady stream of income they receive,
should not be included in the valuation. It should be
the value of the location exclusively.
Stroebel’s bill attempts to incorporate those lease
Parties on both sides of the debate have argued their
points of view. Robert Hill is an attorney who
represents the retailers in several lawsuits. He, along
with Assessor Michael Wedl, have argued there is no
standard or set of criteria for evaluating the values of
valuations, and therefore the property taxes that
company representatives pay, are determined by assessors
who have discretion for determining what the properties
are worth. That can differ depending on the individual
who is performing the assessment. The two displayed a
graphic where one location in Milwaukee is valued at $20
per square foot while another was assessed at $120.
“Right there we have got an issue,” Wedl said. “Even if
it is an old Target and a new Walmart, why is there a
$100 per square foot difference between them?”
also argued that the assessments should only reflect the
materials associated with the location, such as the
brick and mortar used at the site. The income generating
portion of the establishment should not be counted as
part of the property assessment.
an example, if an entrepreneur works out of the home,
the property is valued solely on the location and the
building, not by the income the individual is generating
out of the location.
“What the major retailers are saying is that, ‘We are
already subsidizing everybody else, because we are
already paying taxes on assessments that are three and
four times what we could sell these buildings for,’”
Hill said during an October interview. “But, we also
have a duty to our shareholders, the public, the owners
and, quite frankly to other taxpayers, not to just say,
‘assessors are free to pick whatever number they
choose,’ they have to stay in line with sales prices
because that is the only thing that keeps the system
Those on the opposing side reject that valuations should
be conducted on vacant properties because they are not
comparable as the locations they are in.
“They are saying you can only use properties of dark
stores, properties that are sitting vacant,” said Robert
Lorier during an earlier interview, West Bend’s
commercial consultant. “Those are the ones they want to
use. Our argument there is a reason they left. The
location isn’t as good. It is not desirable. There is a
reason it is vacant. It is not the same as it is now.”
is difficult to understate the potential impact that
could come from passage or failure of the two bills.
Common Council members settled a lawsuit with Shopko
where they had to refund company representatives almost
consequences can be severe. Soon, there could be a
series of challenges from any corporation occupying
locations within municipalities, creating a cascade of
reductions that municipalities may not be able to
Bend Area Chamber Executive Director Craig Farrell is
concerned about a tax shift, where more of the tax
burden is borne by residential owners.
“Active stores in our community receive and depend on
many services from various city departments (i.e.
Police, Fire, roads, etc.), while an empty ‘dark store’
does not,” he said. “There is a cost associated with
those services. Why should a so-called dark store
receive the services if they are not willing to pay for
Despite the setback, legislators who introduced the
measure have promised to keep working.
“Despite my best efforts with Representative Rob Brooks,
Senator Roger Roth and others it is clear legislation to
deal with the ‘Dark Store’ issue will not pass this
session,” Stroebel wrote in a statement. “I intend to
reintroduce legislation next year. Over the past few
months we have gained a lot of ground and educated many
of my colleagues. I am hopeful we can pass meaningful
reform next session.
heart of this controversy is the Wisconsin
Constitution’s requirement of uniformity in property
taxation. Uniformity means fair market valuations. These
bills will result in the use of actual fair market value
for all property, which is what taxpayers deserve when
it is their property being assessed and taxed.”