HOUGHTON — Houghton’s legal fight with Walmart over the “dark store” issue is in abeyance until a related battle downstate is settled, City Manager Eric Waara said at Wednesday’s City Council meeting.

Last year Walmart requested the exemption for their property, which would value it at the same rate as an empty building. For 2020, the taxable value was set at $4,562,390 at a Board of Review hearing. In a Michigan Tax Tribunal filing, Houghton said the taxable value of the parcel should be $6,877,500; Walmart wants it lowered to $1,870,000. Last year, Waara said it would reduce annual tax revenue to the city by about $34,000.

The case is being held in abeyance until a similar case can be resolved in Huron County, where Walmart is seeking the same adjustment in Bad Axe. A hearing in that case is scheduled for June 7-11.

Within three weeks of the Bad Axe ruling, Walmart and Houghton must notify the Michigan Tax Tribunal of any need for future hearings, according to a tribunal order.

Another dark store case involving Escanaba and Menard is active in the state Court of Appeals, which could also set a precedent, Waara said.

“Putting this into abeyance right now is probably going to provide us a cost savings and really aid in any future settlement as hopefully some good case law,” he said.

Waara also relayed word from the city’s insurance company regarding legal action from 5th & Elm owner Frank Fiala over repairs from the 2018 Father’s Day Flood. After looking at Michigan law, the insurance company saw no liability for the city, Waara said.

In February, a letter from Fiala’s attorney, Robert Yonkers of the Troy-based firm of Powers Chapman asked the city to take immediate steps to alleviate persistent flooding problems on Dodge Street, or provide reimbursement for the reduced value of the property.

The patio area had been heavily damaged by the water coming down Dodge Street during the flood, which also damaged a downstairs area. Repairs by Houghton and the Michigan Department of Transportation had been insufficient to prevent recurring damage from stormwater drainage, the letter said. Rainfall causes the patio area to flood, making it unusable and devaluing the property, Yonkers said in the letter.