IM faces new round of tax appeals
IRON MOUNTAIN — City officials will work on a response to five property owners that have filed appeals with the Michigan Tax Tribunal, seeking a total reduction of $2.1 million in taxable value for 2021, Iron Mountain City Manager Jordan Stanchina said Monday.
A sixth petitioner, Wal-Mart Stores, made a procedural error in its filing and had its appeal rejected, Stanchina said. “I would expect they’ll be back in 2022,” he said.
The city reached a settlement with Wal-Mart last year that trimmed the 2019 taxable value of its South Stephenson Avenue store from $5.23 million to $4.5 million, a $730,000 cut that resulted in the city refunding $40,753 in taxes collected the previous summer.
“This is so ridiculous,” Mayor Dale Alessandrini said. He suggested residents unhappy with the condition of city streets “get on these businesses and tell them enough is enough.”
Council member Bill Revord countered that businesses can’t be blamed “for taking advantage of the rules that are there.”
Over the past decade, a controversial “dark store” assessment approach has become common. Many businesses, especially big-box stores, have reduced their tax bills by convincing the tribunal their properties are so unique they can be assessed at less than the cost of construction.
In 2019, Stanchina reported the city losing about $14.5 million in taxable value over the previous two years from tribunal appeals, depleting about $250,000 from general fund revenues. Stanchina noted only a $450 filing fee is needed for an appeal, so there’s little risk to the property owner.
Alessandrini and Revord said responsibility for changing the tax law begins with the Michigan Legislature.
The new appeals include:
— Midtown Mall, seeking a taxable value of $2 million, a reduction of $1,002,300.
— Kmart Plaza, seeking a taxable value of $400,000, a reduction of $470,500.
— Walgreens, seeking a taxable value of $600,000, a reduction of $311,079.
— AmericInn, seeking a taxable value of $1,005,000, a reduction of $279,600.
— Days Inn, seeking a taxable value of $240,000, a reduction of $58,558.
Walgreens is appealing its valuations across the Upper Peninsula, Stanchina said. He said that he and City Assessor Patti Roell may recommend independent appraisals for some of the properties, as well as a regional response to the Walgreens appeals.
In other action Monday, the council:
— Scheduled a public hearing for 6 p.m. Oct. 4 on a request from Boss Snowplow to amend its Industrial Facilities Tax Exemption certificate to include an additional expansion of 19,000 square feet. The initial exemption, approved in August 2020, was for a $12.5 million project of 45,000 square feet. The cost of the new expansion is estimated at $6.275 million. The project qualifies for an Industrial Facilities Tax exemption for up to 12 years, providing a 50% reduction in local property taxes. The 2020 application included a commitment to 24 new jobs, along with the retention of 15 jobs. Much of the total cost is for machinery and equipment.
— Agreed to seek bids to acquire a 2021 Dodger Charger all-wheel-drive police vehicle, which will be paid in part by a U.S. Department of Agriculture Rural Development grant of $14,300. The city will be responsible for an estimated $26,663. Total cost includes Elcom Systems of Iron Mountain supplying lights and equipment for $8,657, which includes installation.
— Noted a new contract for public works and office staff represented by the AFSCME union allows the ability from May 1 to Nov. 1 to work four 10-hour days instead of the regular five eight-hour days. Crews will be split so the city has five days a week of coverage, Stanchina said. Effective Sept. 19, the contract provides wages increases of 2.5% in 2021, 2.75% in 2022 and 2.75% in 2023. Because the contract is not retroactive to the July 1 start of the fiscal year, it includes “signing bonuses” for specific positions, ranging from $350 to $525. With this agreement, the city now has new three-year contracts in place for all city employees represented by bargaining units.