Gundrum: Lawmakers eyeing 'a start' on addressing 'dark stores'

By McLean Bennett

June 5, 2019

 State Rep. Rick Gundrum, R-Slinger, touched on multiple topics during a brief presentation before West Bend Common Council members on Monday.
McLean Bennett/Daily News Staff

WEST BEND — A state representative told city leaders this week that lawmakers in Madison were working on a raft of bills aimed at helping address “Dark Store” tax lawsuits targeting cities like West Bend.

“Those are not a total fix-all, but it’s a start,” state Rep. Rick Gundrum, R-Slinger, said of the three bills slated for more discussion this legislative session.

Mayor Kraig Sadownikow, though, took issue with the bills, telling a reporter after Gundrum’s talk that none of them went far enough in addressing what’s become a headache-inducing tax assessment issue.

The “Dark Store” name refers to a slate of lawsuits targeting cities and other governments around the country, in which retailers — usually big-box chain stores — seek reductions on their property taxes by arguing their operating outlets should be valued no differently than if they were empty (or “dark”).

City officials throughout Wisconsin have argued the Dark Store “loophole,” as the issue has often been termed, is threatening to reduce corporations’ local tax bills while pushing higher property tax costs to nearby homeowners.

One of the current state bills, as Gundrum described it, would let local units of government — including cities, counties and school boards — share costs related to property assessments.

That bill, he said, “potentially gives you a bigger fund resource to fight these challenges in court should they go there.”

Another proposal would open up increased access by assessors to some property documents — and could limit the ability of property owners to appeal assessments if they weren’t forthcoming in providing paperwork requested by assessors.

The third bill that Gundrum said lawmakers were working on would create quicker procedures for challenging assessments.

Gundrum said he found the new bills a “useful tool” in addressing what’s become a wave of lawsuits around the state. Still, he said, “the ultimate solution” may lie in a bill in the state Senate that would go further in fixing the issue.

“Hopefully we will get some traction on that,“ the Slinger Republican said of the Senate bill.

That bill would require properties to be assessed at their “highest and best use,” according to an analysis by the state’s Legislative Reference Bureau, and would clarify how assessors should compare properties’ values. The legislation would also tie up questions over assessing the value of leased properties, another issue that’s occasionally driven litigation.

Sadownikow said he didn’t think any of the three bills mentioned Monday went far enough in closing the taxing loophole.

“This is kind of dancing around,” he said of the proposed legislation, which he explained might help with some litigation costs and collaborative cost-sharing.

“I would much rather see the Legislature step up to the plate and do what is right and close this loophole once and for all,” he said.

West Bend has been no stranger to Dark Store issues. A judge here recently tossed out a lawsuit by Menards to reduce its local property tax bill after a motion to dismiss the case. Still, the lawsuit had been in courts for three years by the time the case ended. And a related tax dispute involving West Bend’s Walmart — an issue that’s been in courts since 2017 — is still awaiting resolution.

<<EARLIER: DARK STORE LOOPHOLE: Is closing the loophole the answer?