IM to challenge store’s tax appeal
Dollar General seeks $269,300 reduction in taxable value; Kwik Trip plan OK’d
Trending
IRON MOUNTAIN -- The taxable value of Dollar General at 1000 N. Stephenson Ave. is in dispute so the city of Iron Mountain will pay $6,000 for an independent appraisal.
Dollar General filed a petition with the Michigan Tax Tribunal seeking a taxable value of $345,000, which is a reduction of $269,300, said City Manager Jordan Stanchina. If successful, the appeal would result in a loss of about $5,600 in annual property tax revenues to the city alone, he told the city council Monday.
The council agreed to hire Anderson Appraisal LLC of Escanaba to estimate the true cash value of the property, which the city has pegged at $1.36 million.
Ownership of the store was transferred in 2021, Stanchina said, and the sales price was $1.45 million. Taxable value in Michigan is roughly one-half the true cash value.
Dollar General's appeal is part of an ongoing business practice related to the "dark store" theory, where retailers and others successfully lower their property tax assessments by comparing the value of their facilities to empty buildings. It's long been a sore spot for local governments, with Mayor Dale Alessandrini making light of it Monday as a "scumbag" tactic by attorneys who specialize in the appeals.
In 2019, Stanchina estimated that Iron Mountain had lost $14.5 million of taxable value due to appeals in the previous two years alone, resulting in a $250,000 hit to the general fund.
As of Aug. 1, Dickinson County Equalization Director Matthew Baumgartner reported eight current appeals before the tribunal that could result in $247,891 in total lost tax revenues across the county, including schools. While not all of the protests rely on dark store arguments, municipalities must decide whether to seek settlements or allow the cases to be decided by the tribunal.
Besides Dollar General, appeals have been filed by Moon Lake Business Center, Flagstar Bank, Amercinn, Victorian Pines, and Timberstone Golf Course, all of Iron Mountain; Evergreen Heights of Kingsford; and Oak Crest Assisted Living in Norway.
Legislative efforts to address the dark store theory have stalled, in part because of opposition from the Michigan Chamber of Commerce.
Just to the north of Dollar General, Kwik Trip Inc. of LaCrosse, Wis., is paying $315,000 to the city for a 2.8-acre site for a convenience store/fueling station and car wash. The sale was first approved in September 2021, contingent on a development agreement that was delayed because of a sewer line running through the property.
Kwik Trip has agreed to relocate the line at its own expense while the city will retain an easement to maintain it. Under an agreement approved by the city council Monday, store construction is to begin no later than Oct. 30, 2023, although Stanchina said it may be earlier. The agreement calls for completion no later than the end of 2024.
The parcel is part of a 10.7-acre former Khoury Inc. furniture plant site that was sold to Iron Mountain's Tax Increment Finance Authority for $875,000 in 2007. The city took ownership in 2012 when TIFA was dissolved. Dollar General developers paid $175,000 for 1.5 acres in 2018.
Kwik Trip, which has hundreds of stores in the upper Midwest, is also exploring a location at the south end of the city. In Kingsford, Kwik Trip recently acquired property on the 500 block of South Carpenter Avenue, with a site plan already in place.
Jim Anderson can be reached at 906-774-3500 ext. 226 or janderson@ironmountaindailynews.com.