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Delta County reviews backing ‘dark store’ fight

ESCANABA — After years of providing financial support to the city of Escanaba in its tax dispute with Menards, the Delta County Board of Commissioners discussed the possibility of renewing its financial commitment to the matter during a recent meeting.

In May 2020, the Michigan Tax Tribunal issued a ruling on the long-running dispute. The city of Escanaba found the ruling — which required it to reduce the taxable value of the Menards store in Escanaba and reimburse the store for previous years’ taxes — unsatisfactory.

“I think in a sense the tribunal kind of ‘split the baby,’ so to speak, but it’s not a case where both sides are equally miserable. I think Menards is less miserable than the city is, and so we are appealing it,” Escanaba City Manager Patrick Jordan said in a phone interview after Tuesday’s meeting.

The city in 2012 placed a taxable value of $4.3 million on the Menards store, which the city says cost $9 million to $10 million to build. After the initial appeal by Menards, the tax tribunal lowered the taxable value to $1.6 million.

Following a round of court appeals, the Michigan Supreme Court sent the case back to the tribunal. The final opinion sets the taxable value at $2.5 million, up from the $1.935 million figure sought by Menards.

The city argues that Menards wants the store be valued as if it were empty and not wanted for purchase by anyone.

Last month, Jordan sent a letter to the Delta County Board of Commissioners asking for additional funds.

“We believe we have good grounds for an appeal and that the (Michigan Court of Appeals) will be warm to our appeal,” Jordan wrote in the letter.

He estimated the costs of the appeal and a potential appeal to the Michigan Supreme Court would be between $50,000 and $80,000.

As of late June, the city of Escanaba’s legal expenses related to the Menards dispute totaled $905,474. A total of $188,922 had been contributed to the city from across the state. Local taxing entities have contributed $102,628 towards the city’s legal expenses; of this, $51,675 was contributed by Delta County.

During Tuesday’s meeting, Board Chair Patrick Johnson said he felt the county should pay a maximum of 10 percent of the city of Escanaba’s total legal expenses. This was based on how much the county stood to gain from a ruling that was more favorable to the city.

“If every taxable entity paid their portion, that’s where we’d be at,” he said.

Vice-Chair David Rivard supported the idea of making another contribution to the city, noting how much the county has already invested.

“I think it just makes sense that we continue the fight,” he said.

The appeal could be the last time Delta County is asked to provide funding related to the Escanaba/Menards dispute.

“They are hopeful that this is the last step, but I don’t think anything’s really guaranteed,” County Administrator Emily DeSalvo said.

However, DeSalvo noted funds in support of the city’s legal expenses were not included in the county’s budget.

“We don’t have that money set aside like we did last year in that line item, so we would either have to pull that money from fund balance or we’d have to pull that money from a capital outlay plan,” she said.

A representative of the city was not present to discuss the request for funding at Tuesday’s meeting.

“I’m disappointed that Escanaba’s not here today,” Johnson said.

The board agreed to table the matter until its next meeting in order to ensure that a city representative could attend and to determine where additional funding in support of the city would come from.

Jordan Beck can be reached at jbeck@dailypress.net.

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