The following editorial was published Dec. 16 in the Green Bay Press-Gazette.
A move by big-chain retailers to drive down their property bills in municipalities around the state simply doesn’t make sense.
Many of these retailers are using what’s being called a “dark store” theory. It works like this: They say their taxes assessments should be based on comparable stores, even if those stores are vacant, or “dark.”
Eau Claire-based Menards used the dark store theory this year when it sued the village of Howard over its 2017 assessment. The retailer opened its Howard store in 2012 on 18.6 acres, spending $10.6 million on land and buildings. The village assessed the store and property at $12.45 million; Menard Inc. said the assessment should be $5.8 million.
The retailer based this in part by comparing the Howard site, which is open and operational, to a closed Home Depot in Beaver Dam, a closed Sears in Sheboygan, and to the former Cub Foods on Green Bay’s east side, which had been closed since 2009. (Two stores have since moved into the Cub Foods building, but it was vacant at the time of the lawsuit being filed.)
The closed Cub Foods building was assessed about $40,000 a year in taxes; the tax bill for the Menards in Howard was about $209,000 for 2017.
Menards eventually dropped its lawsuit against Howard.
Yet the claim that an open big-chain retailer should be assessed the same as a store that has been closed for eight years doesn’t make any sense. Those vacant stores aren’t earning any income for retailers, but the open stores are. The vacant stores require very little police and fire protection; operational stores are a big user of those services. Infrastructure is added in communities to get customers, employees and goods to those stores, as well as heat and electricity.
This isn’t an isolated case. A USA Today Network-Wisconsin investigation found 130 “dark store” cases filed by big-box stores since 2014 against municipalities statewide. Of those cases, 67 are open. If each of those is settled, local governments would lose about $774 million in taxable property value, our analysis determined.
In Brown County, there are two open cases — a Walmart suit against Bellevue and a Woodman’s case against Howard. A Menard’s case in Bellevue was settled in 2016.
If the Menards’ suit in Howard had gone against the village, about $111,000 in school, village and county tax payments would have been refunded, including $55,000 from Howard-Suamico schools.
The tax burden would have fallen on the very people and communities that support the store.
Two bills — Senate bills 291 and 292 — would end the “dark property” comparison and clarify that lease agreements cannot be factored into property valuations.
The bills have bipartisan support in the Legislature, however, neither has been brought to the floor.
It’s time for the Legislature to protect taxpayers and homeowners.
Yes, businesses should be taxed fairly, but don’t base the tax assessment of a working store on that of a vacant, closed operation. It makes no sense.