Two U.P. townships dispute the property tax value of big-box stores
Two townships in the Upper Peninsula have lawsuits pending against big-box retailers with stores in their communities. The Home Depot and Lowe’s say their stores are worth one amount of money, but as ABC 10 senior reporter Mike Hoey explains, Breitung Township and Marquette Township say something different.
The Home Depot store just outside of Iron Mountain is thriving, with plenty of cars parked outside anytime it’s open. But last week, the Michigan Court of Appeals ruled that the store isn’t worth any more money in this condition than it would be if it were vacant.
“You put up a $10 million building, and they’re saying that the building has little or no value once it’s put up and put into operation,” Breitung Township superintendent Joe Rogina said. “That’s not the case.”
The Court of Appeals upheld an earlier ruling from the Michigan Tax Tribunal. The decision reduces the taxable value of both the Home Depot store, and the Lowe’s store in Marquette Township, by more than half. That amounts to a significant amount of lost property tax revenue.
“It’s about $80,000, just about, each year for (Marquette) Township,” Marquette Township supervisor Dennis Liimatta said. “Then you can plan on an additional $40,000 for the fire department millage as well that doesn’t get captured.”
Breitung Township has decided to appeal to the Michigan Supreme Court. The township will know within about the next six months if the court will choose to hear their case. Dickinson County will also be out a significant amount of money if the state Supreme Court doesn’t rule in their favor.
“This particular appeal has been going on for six years now,” Dickinson County equalization director Sid Bray said. “Assuming the Court of Appeals decision is upheld by the state Supreme Court, it’ll mean $60,000 in the county operating budget that’ll have to be reimbursed to Home Depot. That’s six years’ worth, plus interest.”
The Marquette Township Board will decide at a meeting next Tuesday night if they’ll also go to the state Supreme Court with their case against Lowe’s. Liimatta says their dispute is just about identical to Breitung Township’s issue with The Home Depot. He also says the retailers are trying to use a legal argument that residents would never be allowed to use to challenge the assessed values of their homes.
“Part of their argument is that those stores were built uniquely as a big-box store specifically, and that’s why they don’t have a re-use and why their value is so low,” Liimatta said. “They’re also trying to tell us that at some future date, the store will be vacant and dark and, therefore, you need to evaluate at that. I would make the same argument with my home. I don’t know what’s going to happen.”
“When these cases are decided against the state of Michigan, against the local townships and cities, what happens is, that tax burden is eventually passed on to the homeowner,” Rogina said.
We reached out to corporate officials from both retail chains for comment. Stephen Holmes, director of corporate communications for The Home Depot, made a statement to ABC 10. He said, “Like any property owner – whether commercial or private – we simply want to ensure that our real estate is assessed at fair market value for tax purposes. This is all part of that process, much like a homeowner might follow.” Lowe’s officials say that because the matter is pending litigation, they have no comment.