I am a developer in the city of Janesville and have worked on numerous projects over the last 25 years including the Kmart/Festival redevelopment, Oasis/Menards redevelopment, Castle Metals, Upper Lakes Foods, IPM Foods and ANGI Energy Systems to name a few. I read the editorial Aug. 4 about the dark store loophole and concluded that it was totally one-sided, very misleading and appeared to be written by the dark store lobby.
Let me explain:
Everyone hates to pay property taxes, and everyone would like their taxes reduced. Big box property owners and tenants would also like to find someone else to pay their share of their property taxes. OK, I get it! But property taxes, although not a perfect system, are based on the value of the real estate as they currently exist and not comparable to old, outdated, unusable, abandoned or dilapidated property.
Menards would like to sell you on the idea that their current building, that cost them over $20 million to build, should be worth the same per square foot as their old building. Their old building and land, considered a dark store, sold for about $3 million but then required an additional $12 million to rebuild along with the city’s help with TIF funds.
There is a new hotel being built on the old Menards site, and dark store theory would say the assessment should be the same as the Monterey Hotel in downtown Janesville. Should the assessment be the same when one cost $15 million to build and the other has nominal market value?
If a property cost $25 million to build, then it should be assessed at $25 million. The new hotel should be assessed at its cost, too. If a building can be bought for $3 million and they put in $6 million in improvements, then it, too, should be assessed at $9 million, not the $3 million it sold for as the dark store theory would suggest.
There is big money behind the dark store advocates, and it will have a huge effect on homeowner’s property taxes if you let them sell the courts and Legislature on their bogus theory.
Because of the high cost of going to court, the city has already agreed to settle a number of dark store suits costing each property owner in Janesville $22 a year. It has been estimated that if they win, every property owner (commercial and residential) in the city of Janesville will pay another $24 in taxes.
I think that estimate may be grossly understated, and the cost to homeowners will be a lot more.
In our case, it will unfairly save our companies and tenants hundreds of thousands of dollars a year.
I would urge you to vote to stop these bullies so the taxes are fair for everyone.
Tom Lasse is a principal owner of Badger Property Investments, a commercial real estate investment and development firm in Janesville.