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Thursday, February 18, 2016

Ind. Gov't. - "Big box/dark box property tax fight: St. Joseph County vs. big box stores"

Jeff Parrott of the South Bend Tribune reports today:

St. Joseph County officials could soon gear up for a fight with big box stores over their property tax bills.

If the stores win, as they’ve already done in cases near Indianapolis and Kokomo, the county and the cities of South Bend and Mishawaka stand to lose substantial amounts of tax money.

The county would also have to refund millions of dollars the stores have paid in property taxes, plus interest, from past years, said Frank Agostino, deputy county attorney who represents county assessor Rosemary Mandrici’s office.

Big box stores have increasingly been appealing their assessments in recent years, including the Meijer store on Grape Road in Mishawaka. Meijer is appealing a 2011 assessment valuing that property at about $17 million.

Meijer is proposing that it instead be valued at about $7.7 million, a difference of nearly $9.4 million. That could mean an annual property tax loss of nearly $282,000, Agostino said.

The county would have to refund Meijer that amount annually back to the 2011 tax year, adding up to well over $1 million, not including interest. * * *

Agostino pointed to two reasons for big box stores filing appeals:

• In 2012, the state released new cost tables for assessors to use on retail stores. The cost tables resulted in substantially lower assessments because they were based on real estate values that had dropped significantly during the recession.

Retailers saw the new, lower assessments and began to question the accuracy of the process in general, emboldening more stores to appeal.

• In December 2014, the Indiana Tax Review Board ruled in favor of a Meijer store in Indianapolis and a Kohl’s store in Kokomo. The stores argued that their assessments should be partly based on the sale prices of vacant stores, known in the industry as “dark sales.”

Agostino said the county opposes dark sales comparisons and should hire appraisers to appraise stores that appeal their assessments. Appraisers already have told him that they would base their appraisals on the rents that nearby stores are paying, he said.

Agostino estimated it could cost at least $500,000 to hire appraisers and additional attorneys to defend the county’s assessments of the stores, but that’s much less money than the county could lose if it doesn’t defend its assessments in the appeals process.

The ILB has a long list of earlier posts on the big box/dark box property tax assessment issue.

Posted by Marcia Oddi on February 18, 2016 11:38 AM
Posted to Indiana Government