PLEASANT PRAIRIE VILLAGE BOARD APPROVES SETTLEMENT AGREEMENT WITH TARGET CORPORATION REGARDING PROPERTY ASSESSMENTS
During a September 21 meeting, the Pleasant Prairie Village Board approved a settlement agreement with Target Corporation regarding property assessments covering a three-year period. According to the settlement agreement, the Village will issue a refund to Target in the amount of $118,946.56 within 60 days of execution of the agreement.
Wisconsin law dictates what factors assessors must consider when calculating assessed values. The State law is intended to maintain equity and uniformity in distributing the property tax load amongst all property owners, large or small, throughout the State. Some of the basic factors used to calculate the assessed value, include: the value or purchase price of the land, actual construction costs for the building/facility, the income generated by a property, and any recent comparable sales.
Target Corporation operates a Target store within a 126,842 square foot building located at 9777 76th Street in the Village of Pleasant Prairie. The building was constructed in the Shoppes of Prairie Ridge during 2007, and the Target store opened in this location during the fall of 2008. For 2012 and 2013, the Village calculated the assessed value of Target's Pleasant Prairie location to be $12,181,300; for 2014, the assessed value was calculated at $13,715,200. The Target Corporation had an appraisal completed that claims the value of their Pleasant Prairie location to be $6,642,000 over the same three-year period.
Target Corporation, through their tax attorney, sought to have their value compared to former abandoned Walmarts in undesirable locations (including the site in Kenosha). The Village disagrees with that method of determining value, because it is not equitably applied to all. Target Corporation has been disputing their assessed values statewide over the past three years.
While the Village prefers not to settle claims of this nature, accepting Target's offer via the settlement agreement is in the community's best fiscal interest, as it will avoid the burden of increasing legal expense. The settlement agreement reached between the Village and Target Corporation recognizes an assessed value of $10,781,000 for each year of the three-year period (2012 through 2014).
"As tax attorneys solicit more large national clients to challenge assessed values based upon the value of "dark" or vacant stores as opposed to sales of comparable properties or acquisition costs, the equity in the property tax system will erode, as it has already in Michigan," explained Village Administrator Michael Pollocoff. "Residential property taxpayers and small and local businesses will be at a severe disadvantage. They will pay more of the property tax as national chains pay less based on their ability to financially sustain a long-term legal challenge."