Monthly Archives: December 2015

‘Dark Store’ Problems – Are They Listening?

In his Word on the Street blog this week [12-12-15], Brian Cabell reports that MI Representative John Kivela “…noticed a remarkable and encouraging change in attitude in Lansing on the ‘dark store’ issue. Legislators who had previously dismissed the issue are now acknowledging there might be a problem. The Municipal League and realtors, and even the Chamber of Commerce have testified before the Tax Policy Committee in the last few days conceding that something might have to be done.” Kivela’s cautionary forecast is that new  “…bill or bills [will be] introduced in the legislature by spring, with bipartisan support, and possibly passage by summer.”  Here’s some of what has happened this past week in Lansing…

The Marquette Mining Journal also reported [12-11-15] on the Tax Policy Progress  that took place during a second hearing focusing on the ‘dark store’ rulings at the Tax Policy Committee of the Michigan House Wednesday [12-9-15].  Progress was made toward finding a solution, said David Maturen,  a Republican state representative serving the 63rd District and majority vice-chairman of the committee.
“We’re trying to find some common ground to get us back to what I perceive is a correct approach in valuing property,” he said. “We just want a level playing field for not only assessors, but also property owners.” Representative Maturen is heading up a work group to do just this. See his recent interview with Battle Creek station WBCK.

Marquette County Commissioner Joe Derocha presented the committee with 2,000 signatures from concerned citizens supporting a legislative fix. [thanks to all who signed the recent Move On.org petition sponsored by Marquette County Citizens for Fair Share]

Many others from Counties across Michigan spoke at the hearing, as well, and noted the budget shortfalls felt across the board. Van Buren County speakers testified that MI Tax Tribunal rulings resulted in %50 of Market Value for their ‘big box’ stores, while the same stores in neighboring Wisconsin are holding at full Market Value. This is causing revenue losses of almost $1M. Van Buren ISD Superintendent spoke to these losses as greatly affecting students, especially in the area of Special Education, those most in need of services. “Every $1M lost in valuation equates to $3,332 in lost special education revenue…In addition, through the process of litigation for two large companies…the price tag is not cheap.”

Oakland Cnty Study_smBusinessvsBigSpeakers from Oakland County presented a study  showing that small business owners’ property taxes have been consistently higher than their ‘big box’ counterparts.

An attorney and an assessor from Troy argued that the ‘dark store’ basis for Tax Tribunal rulings are not closely in compliance with “Michigan’s definition of ‘true cash value’ as contained in the Michigan General Property Tax Act…”

To view/download actual transcripts of these and more hearing testimonies. Click the Testimony drop-down link on the House Tax Policy Committee.

Why Are Valuations ‘less than dirt’ ?

   Representative David Maturen speaks more on the ‘dark store’ issue on a recent radio interview:
“63rd State Rep. Dave Maturen has been charged with looking into the issue to see what changes the state might propose to the system.  It’s a complicated issue.  Businesses pay property tax based on the cost paid to buy land and build a facility.  But many are convincing the Tax Tribunal in Lansing to reduce it, based on the value of an empty, abandoned store.”

Find out: What are ‘Dark Store’ tax rulings? How do they happen? Why do they happen? What is the Tax Tribunal? — and other crucial How’s and Why’s. This excellent interview clarifies a complicated issue with authoritative intelligence. 

NOTE: Mr Maturen is currently the vice-chairman of the MI House Tax Policy Committee.  Please contact him to express your concerns and possible experiences of the effects of these cuts in your communities: David Maturen davidmaturen@house.mi.gov, or call 517-373-1787
or the House tax Policy Committee Clerk’s Office Ph: 517.373.0135 Clerk@house.mi.gov

Rep. Maturen joined WBCK’s Tim Collins on the Richard Piet Show in Battle Creek on November 30, 2015 1:21 PM. [WBCK]

‘Dark Store’ Valuation “less than dirt”

NewCosto_KazooCnty

Costco Oshtemo Township

As new big box stores open all over the state, concerns are spreading. “The Menards store in Oshtemo Township [Kalamazoo County], for example, was valued at just under $8.3M in 2011. They appealed to the MTT and their property’s true-cash value was reduced to $6.4M. This decision cost our township $75,000 in revenue over five years that would have been spent on police, fire, and roads… In 2014, Costco purchased property for $5.5M and the construction valued at over $12M, resulting in a total building and land value of $17.5M. Attempting to strike a balance between the conventional methods of assessment and those of the MTT, the assessor in Oshtemo valued the property at $8.6M, a conservative valuation. Despite this effort Costco is asking the MTT for a true-cash value of $4M. They are requesting a value that is less than what they paid for the dirt on which it was built.”

Michigan townships, through the MTA, have been spreading the word downstate. Kalamazoo County, Comstock Charter Township Attorney, James Porter, calls this the “less than dirt” valuation method. Coalitions have formed. Attendance at the Marquette County Community Forum in early November was around 300 people.

The vice-chairman of MI Tax Policy Committee has been asked to form a committee to find a solution to the practice of tax assessments based on ‘dark store’ property comparisons. He says: “A very real and proximate example of this flawed (in my opinion) dark store methodology can be found with a brand new, national retail facility at U.S. 131 and Stadium Drive in Oshtemo Township [Kalamazoo Cnty.]. It has appealed its first year assessment and has asked the tribunal for a reduction of 80 percent of its total construction cost (land and building), which results in a value less than what it paid for the land alone in 2014.
I think most taxpayers in our state would not call that the product of the type of tax system we want in Michigan. No other class of property gets this specialized approach to value.”

It is not too late to join this move to inform and educate our own legislators on the devastating effects of these MI Tax Tribunal rulings. An informational committee hearing is planned for December 9th in the House. You can call or e-mail  concerns and accounts of specific effects of the cuts in your local services to:

David Maturen davidmaturen@house.mi.gov, or call 517-373-1787
House tax Policy Committee Clerk’s Office Ph: 517.373.0135 Clerk@house.mi.gov

More at –In the dark. Unfair assessing theory costs locals millions – township focus, November 2015
http://www.michigantownships.org/downloads/nov_cover_story.pdf