Walmart sues city again

The City of Rhinelander is facing another lawsuit from Walmart as the retailer is once again challenging the city’s assessment of the value of its Lincoln Street building.

Walmart filed its latest lawsuit against the city on Aug. 30, under the name Lincoln Plaza, Inc., claiming the city’s most recent property tax assessment was off by $6.3 million.

The newly filed document largely mirrors complaints filed by the retailer in 2021 and 2022, and still unresolved, claiming the city’s annual assessments were off by $6.3 million.

All three complaints state the city’s valuation of the local Walmart property is $12 million, however lawyers for the retailer argue the value of the property is no more than $5.7 million and thus the court should order a refund for the overpayment of property taxes.

The City of Rhinelander has had to defend itself against several so-called “dark store” lawsuits over the last several years. Most recently, in 2019 the city settled three property assessment lawsuits brought by Walmart and refunded just over $65,000.

The “dark store” theory refers to a legal argument large retailers have made that their properties should be assessed at the same rate as similar vacant buildings. The theory has been used on a number of occasions following a 2008 state Supreme Court ruling that Madison city assessors had overvalued a Walgreens store and therefore the difference had to be refunded.

Walmart’s 2021 and 2022 claims against the city are set for trial before Oneida County circuit judge Mike Schiek in May 2024. 

A final pretrial conference on those claims, which were consolidated into one action, is scheduled for March 2024.

As for the new lawsuit, city attorney Steve Sorenson told the River News he had no immediate comment as he had yet to see the filing. The legal landscape in Wisconsin, with respect to property tax reduction lawsuits, has changed since the last time Walmart filed suit against the city. In February, the Wisconsin Supreme Court ruled in favor of the City of Delavan in a lawsuit brought by the retailer Lowe’s using the dark store tax theory. 

The League of Wisconsin Municipalities lauded the decision as “representing a major victory for Wisconsin municipalities and their taxpayers.”

 “We are very pleased with the Court’s decision in this case,” the League’s legal counsel Claire Silverman said. “Large commercial retailers have engaged in concerted efforts, statewide and nationally, to challenge tax assessments using novel and aggressive theories such as the dark store theory. In Wisconsin they have misconstrued and argued for ever-more expansive readings of the Court’s 2008 Walgreens decision. It’s incredibly expensive to litigate these cases and owners of big box commercial properties who assert these theories unsupported by the law, like dark store, are trying to pressure local governments to reduce their tax assessments. If the municipality caves, these owners get an unfair tax break, with the difference ultimately being shouldered by home owners and other small businesses. We hope today’s court decision brings an end to that practice.”

Heather Schaefer may be reached at [email protected].