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May 31, 2020

2/8/2020 7:30:00 AM
City settles Walmart 'dark store' lawsuits, refunds retailer $65,813.93

Jamie Taylor
River News Reporter

Lawyers for the City of Rhinelander and Walmart reached an agreement in September 2019 resolving three lawsuits the retailer had ­filed against the municipality alleging its property on Lincoln Street had been assessed at a value higher than what it would have been if it were vacant.

According to the terms of the settlement agreement, which the River News obtained this week via an open records request, the city refunded the retailer $65,813.93 in tax overpayment for the 2017 and 2018 tax years.

Big box retailers across Wisconsin, like Walmart, Menards and Walgreens, have pursued property tax reductions using the so-called "dark store" loophole, arguing their properties should be assessed at the same rate as similar vacant buildings. This loophole stems from a 2008 state Supreme Court ruling that Madison city assessors had overvalued a Walgreens store.

Walmart filed the first lawsuit, under the name of Lincoln Plaza, Inc., on July 25, 2018. The second lawsuit was filed on Aug. 29, 2018 while the third was filed Aug. 23, 2019.

In all three suits, Walmart noted the City of Rhinelander's assessment of its parcel on Lincoln Street was $13,970,400 in 2017, '18 and '19.

The suits claimed the property was overassessed by nearly $4.5 million in all three years and requested a refund for the overpayment.

The three cases were consolidated before Oneida County judge Michael Bloom, and had been set for trial Feb. 4-7, 2020, with a final pretrial scheduled for Jan. 10, 2020.

However, on Oct. 8, 2019, a proposed order for dismissal with a stipulated agreement of dismissal was filed. Bloom signed the two documents the next day, according to online court records.

The stipulated agreement resolving the cases referred to a "settlement agreement, waiver and release" that was not filed in the court records.

The River News filed an open records request for the agreement on Jan. 3 and received the agreement on Feb. 4.

Under the terms of the agreement, the city agreed to reduce the assessed value of the property from $13,970,400 to $12,450,000 for 2017 and '18.

The city also agreed to lower the 2019 assessed value of the property from $13,970,400 to $12 million, a reduction of $1,970,400.

The city also agreed to refund $65,813.93 "representing the partial refunds of property taxes previously paid by Plaintiff based on the adjusted property assessments of Lincoln Plaza for tax years 2017 and 2018," the agreement states.

"No refund is due to Lincoln Plaza arising out of the 2019 assessment," the agreement noted.

Under the terms of the agreement, the refund was to be paid on or before Sept. 29, 2019.

City finance director Wendi Bixby said this week the refund was issued by the deadline. She said part of refunded taxes came from the clerk's budget.

"On the clerk's budget, there is an account called 'bad debt and legal tax expense,' it came out of there," Bixby said. "We budget $20,000 per year. If it goes over the $20,000, we have to either do a budget amendment or maybe some of the other items are less than what was budgeted, and it just washes."

Bixby said she is still in the process of posting items to the 2019 budget in preparation to close out the year so the annual audit can be performed. As a result, she does not yet know what may need to be covered by a budget amendment.

While the entire amount of taxes refunded was paid by the city, the School District of Rhinelander, Nicolet College and Oneida County will eventually have to reimburse their share of the taxes for those two years to the city, Bixby said.

Jamie Taylor may be reached via email at jamie

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