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Waara: Walmart now in dialogue with the city over dark store issue

Garrett Neese/Daily Mining Gazette Walmart’s Supercenter on Razorback Drive. Representatives of the corporation have reached out to Houghton officials.

HOUGHTON — Houghton’s recent public awareness campaign about Walmart’s attempt to lower its property taxes under the “dark store” theory has caught the company’s attention.

Two weeks ago, City Manager Eric Waara and city stakeholders held a press conference about the cuts to services that could come if Walmart succeeds in lowering its property taxes.

Within hours of the conference and a corresponding press release, Walmart had reached out to the city’s attorneys to open a dialogue, Waara said at Wednesday’s city council meeting.

The city and Walmart are scheduled for a five-day Michigan Tax Tribunal hearing starting June 5.

“​​We see this as a door being open to settlement,” he said. “I’m sure that would be a long way off, but at least it’s positive news.”

Walmart is seeking a 60% reduction of its property taxes retroactive for six years. Waara had said the city would need to pay back $1.2 million to Walmart if the Michigan Tax Tribunal rules in Walmart’s favor.

Walmart is seeking a lower valuation of its property under the “dark store” theory, which holds that the property should be valued compared to what the building would be sold for if vacant.

Waara said the city is working with its attorneys to bring in an independent appraiser to review both the city and Walmart’s appraisals for potential mistakes that may affect upcoming litigation. The review could cost $10,000, Waara said.

Houghton is also suing Walmart in federal court, saying Walmart is violating a development agreement made when Walmart expanded its store to a Supercenter. Walmart had agreed to raise its taxable property value by $1.9 million in exchange for infrastructure work the city did for the expansion.

Houghton’s stand against Walmart has been picked up by numerous media outlets around the state, and has also gotten traction in Lansing, Waara said.

State Rep. Greg Markkanen and State Sen. Ed McBroom have been in contact, Waara said. Earlier this month, McBroom introduced bills that would create a new county-level assessment review board for properties valued at more than $600,000, and also establish a new “highest and best use” standard for valuing properties. Those decisions would be appealed not to the tax tribunal, but to local circuit courts.

State Rep. Jenn Hill, whose district includes Marquette — another municipality contending with the dark store issue — has also reached out, Waara said.

“We’re getting reach,” Waara said. “The fact that (Walmart) reached out to our attorneys within a couple hours of the press release going out shows that it does care, so we’re going to keep beating the drum.”

Waara also commented on Monday’s Houghton County Circuit Court ruling upholding the Planning Commission’s site plan approval of a residential-retail development at 326 Shelden Ave. The Hall Building, which filed the suit against the city, has 21 days to file an appeal of the ruling.

“The long and short of it is, the planning commission did do its job in that review, and I think the city and the taxpayers should appreciate that,” Waara said.

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