Walmart sues city over property assessment

The city of Shawano is the latest municipality to get hit with a civil suit by the real estate arm of Wal-Mart Inc. over property valuations assessed on their big box stores.

Wal-Mart Real Estate Business Trust filed suit against the city on Dec. 26 asking that the court lower the property value placed on its Shawano store and demanding that the city refund the “excessive real estate taxes” that were levied on the property.

The city valued the Shawano Walmart at $9.3 million in 2018 and 2019. It had been valued at about $8.9 million from 2014 through 2017.

The civil suit claims the property should be valued at only $5.9 million.

The city would lose $32,407 in 2019 property taxes from Walmart at the lower assessment, forcing that shortfall to be made up by other property owners to meet the city’s tax levy needs.

If valued at $5.9 million, Walmart would owe $55,458 in property taxes for 2019 compared to the $87,505 in taxes the store was assessed at the city’s valuation of $9.3 million.

The suit cites a state statute that has come to be known as the “dark store loophole.”

That law allows big box stores to claim significantly lower property values because, they claim, those properties can’t be used for anything else once they’re vacated.

Those companies argue their properties should be assessed as if they were vacant when taxes come due.

Counties and municipalities across the state have been critical of the issue since a state Supreme Court decision in 2008 that sided with the big box stores.

Wal-Mart Real Estate Business Trust has been on a litigation spree for the last several years, filing similar suits against municipalities across the state.

More than 30 municipalities were targeted in 2019 alone. Most of those cases are still open, but some municipalities did reach a settlement with Wal-Mart.

City Administrator Eddie Sheppard said the city has been expecting Wal-Mart would eventually file suit against Shawano making the same argument.

“And now that’s happened,” he said.

The city of Shawano has 20 days to respond to the civil suit, though as of Monday the city had not yet been served notice of the suit, according to Sheppard.

The Wisconsin League of Municipalities has been lobbying the state Legislature to close the dark store loophole, but in spite of widespread support for changing the law legislative efforts to do that have failed.

“I know it keeps coming up and it keeps getting shot down,” Sheppard said. “I don’t understand why the Legislature hasn’t been more supportive of it.”