September/October 2021 Issue

Also in this issue: COVID-19 Vaccine Mandates     |     Municipality Has a Right to Be a Party to Its Neighbors' Cooperative Boundary Plan

Municipality Wins Again in Dark Store Tax Case

10.04.21

The City of Delavan is the latest Wisconsin municipality to win in a tax assessment challenge based upon the ​“dark store” theory. Lowe’s Home Centers, LLC v. City of Delavan, Appeal No. 2019AP1987, (July 28, 2021, unpublished per curiam opinion, Dist. II).

The series of court cases and the specific language against dark store theory in the Wisconsin Property Assessment Manual (WPAM) should mean that such challenges begin to go away. However, it does not appear that the owners of big box establishments are willing to abandon the discredited legal theory.

Lowe’s challenged the City of Delavan’s assessments for the tax years 2016 and 2017. Lowe’s presented evidence of the sales of other big box stores, but all of the sales were of stores that were not operating or ​“dark.” The circuit court and the court of appeals rejected that evidence because the sales were not of comparable properties. The court of appeals relied upon the published decision in Bonstores Realty One, LLC v. City of Wauwautosa, 2013 WI APP 131, and the specific language in the WPAM that ​“the assessor should avoid using sales of improved properties that are vacant (‘dark’) or distressed as comparable sales unless the subject property is similarly dark or distressed.” WPAM, at 9 – 12.

The court went on to cite Lowe’s prior attempts to use the dark store theory against them in this case (¶35):

Again, for the reasons articulated in Lowe’s other excessive assessment challenges involving the appropriate legal analysis of the same expert’s, MaRous’, reliance on ​“distressed” properties, we reject Lowe’s challenge here. Lowe’s Home Ctrs., LLC v. Village of Plover, No. 2019AP974, unpublished slip op. ¶¶42 – 43 (WI App Oct. 29, 2020); see also Lowe’s Home Ctrs., LLC v. City of Wauwatosa, No. 2020AP393, unpublished slip op. ¶¶68 – 69 (WI App July 7, 2021).

Thus, Lowe’s has now lost three cases in a row on the discredited dark store theory.

This third court ruling against Lowe’s is an unpublished per curiam opinion and, per the rules of appellate procedure, may not be cited to a court in any litigation.