MONROE — The City of Monroe is among several other Wisconsin municipalities that have faced legal property assessment challenges from Walmart, according to city administrator Brittney Rindy in a press release May 14. A legal argument that has more recently become known as the “Dark Store Theory.”
“In recent years, big box retailers have attempted to use this argument to claim that assessors calculated the value of their property at a higher level than was appropriate,” Rindy wrote in the release. “Often challenging the assessor’s office and municipality to assess the business property as if it were vacant, dark, or other characteristics, ultimately lowering the business tax responsibility and shifting the tax burden to property owners within that municipality.”
Walmart first sued the city in 2018 over the business’s 2017 assessment. By the time the city and Walmart reached an agreement in 2020, the litigation had expanded to three years of cases that were consolidated into one lawsuit, Rindy said. Part of the original settlement included an agreement to the valuation in 2020 so that there would be no legal dispute for at least one year.
The valuations and settlement value reached in 2020 gave refunds to Walmart of $29,947.18 for 2018 and $30,626.02 for 2019. The settlement valuation for 2018 was $8,631,000, while 2019-2020 were each $9,361,500.
After the city’s agreement for 2017-2020, Walmart repeated the process, challenging the 2021, 2022 and 2023 assessments.
“The strategy of settling and then immediately challenging the next year’s assessment is the strategy these plaintiff attorneys have used throughout the state,” Rindy said.
The 2021 and 2022 over assessment claims were initially consolidated and scheduled for a three-day court trial on May 29, 2024. The 2023 over assessment claim was addressed separately.
In October 2023, the City of Monroe Board of Review (BOR) attempted to challenge the repetitive claim process by denying Walmart’s request for a waiver of hearing or telephone testimony. Consequently, a Walmart associate was required to represent their objection before the BOR, at which time the board sustained the assessor’s valuation. Walmart continued to pursue the matter by filing a claim of excessive assessment, Rindy said.
The claim was presented to the Finance and Taxation Committee on Feb. 12, where they recommended to the Common Council to disallow the 2023 over assessment claim. The council took action to disallow the 2023 over assessment claim on Feb. 20.
On April 1, the council met in closed session to consider a settlement offer initiated by Walmart and authorized by city-appointed attorney Ryan Braithwaite to negotiate a settlement on more favorable terms acceptable to the city. As a result, Walmart would accept an assessed value of $10 million per property tax year from 2021 to 2025. The council approved this agreement on April 15 and the city refunded Walmart $38,597 for past over assessments with no interest.
Both Walmart and the City have agreed to waive any claim if the assessed value of the business remains at or below $10 million. However, if an assessment exceeds that amount, Walmart will have the right to contest the value per the state statute.
By resolving the over assessment of 2021-2025 outside of court, Rindy said the city avoided incurring a conservative estimate of $35,000 in trial fees for the 2021 and 2022 cases as well as future legal and assessment fees for 2023-2025.