LaFave, IM council talk ‘dark store’ issue
IRON MOUNTAIN — Iron Mountain council members primarily focused on “dark store” legislation while talking with new state Rep. Beau LaFave on a number of issues significant to the area and Upper Peninsula.
The Iron Mountain Republican said he is among 53 bipartisan co-sponsors on House Bill 4397 to eliminate the dark store loophole. The bill easily passed the House but faces uncertain prospects in a Senate committee.
Northern Star Industries and its Systems Control division of Iron Mountain petitioned the Michigan Tax Tribunal last year to reduce its property value at 3201 E. Industrial Drive from $10.3 million to $1.4 million. If the company is successful, the city would lose about $108,000 in annual tax revenues.
Iron Mountain hired a law firm in August that gained an appeals court ruling for Escanaba against reducing the tax valuation on that city’s Menards store.
If the Iron Mountain issue is not settled by July, the city will have to decide whether to spend more to go before the tax tribunal.
The company already received a 50 percent tax break for much of the property after the city approved an Industrial Facilities Tax Incentive for Systems Control, Mayor Dale Alessandrini told LaFave.
The tax challenge is based on different appraisal methods, City Manager Jordan Stanchina explained. The city assessor uses the cost to build, while businesses claim the value should be based on the potential sale price of the property if vacant.
The bigger stores compare themselves to abandoned stores in depressed areas of the state.
“The big box stores will also claim that certain deed restrictions lower their taxable value,” LaFave said.
The new bill will ensure stores pay taxes based on proper value, he said. “It’s a good bill that will compare apples to apples across the board.”
Unfortunately, the bill is hung up in the Senate finance committee, where Sen. Jack Brandenburg, R-Harrison Township, is not interested in bringing it forward, LaFave said.
“I want to meet with him (Brandenburg) and let him know it is not just a U.P. issue,” LaFave said. “It affects the U.P. disproportionately over the bigger cities downstate. They (areas downstate) can take a bigger hit than we can because their budgets are so much more.”
It is a problem that affects communities throughout the state, council member Bill Revord said.
“How can they not see it is devastating smaller municipalities?” Revord said.
The hard part for the city is the tax tribunal rulings take advantage of a depressed real estate market, Stanchina said. Once the tax value is cut, it will never be made up again — that is the big issue he has with these rulings, he said.
“The Tax Tribunal rules in favor of the store or business and the county has to pay back taxes, as well as anyone that has a millage — senior citizens, 911, the city. It affects a lot more people that you think,” council member Scott Celello said.
“From a local government standpoint, it’s an important issue and needs to be kicked out of committee,” Stanchina said.