Maine communities saying no to Wal-Mart abatement requests

Posted June 06, 2014, at 11:20 a.m.
Wal-Mart in Calais, Maine
Tim Cox | BDN
Wal-Mart in Calais, Maine Buy Photo

Wal-Mart Stores Inc. has had little success in getting Maine communities to agree to lowering prices when it comes to the tax assessments on the company’s stores.

The international retailer, which owns 22 stores and one distribution center in Maine, has asked for abatements at 11 locations this year and succeeded only twice, both times for far less than the amount requested.

“We avail ourselves of the opportunity that every taxpayer has,” David Wertz, Wal-Mart’s communications director for the eastern region, said.

The requests are not specific to Maine but are part of the company’s regular review of its properties and tax payments across the country, he said. When the property assessments are considered out of line, adjustments are sought, Wertz said.

Good Jobs First, a left-leaning national group, has criticized the giant retailer for shortchanging local communities and their taxpayers.

“Once a store has been in operation for a while, Wal-Mart frequently challenges the assessed value that local officials assign to it for tax purposes,” Good Jobs First wrote in a 2007 report. “In an effort to cut the property tax it pays to local governments — revenue that pays for public education, police and fire protection and other vital services — Wal-Mart routinely tries to belittle the value of its own facilities.”

Maine assessors acknowledge that abatement requests are common, but the concerted effort by Wal-Mart across the state is unlike any other company.

In total, the Arkansas-based company has asked for more than $55 million in reduced assessments this year, which, if they were granted, would have cut its annual property taxes in Maine by more than $800,000, according to information provided by the individual communities where Wal-Mart facilities are located. The two abatements that were accepted totaled about $5.4 million and resulted in tax cuts to the communities totaling only $72,000.

There is no statewide accounting of the abatement requests, and the national Wal-Mart property tax manager who filed them referred all questions to the firm’s public affairs office.

The company, which employs 7,436 people in Maine, making it the state’s second largest employer behind Hannaford, paid $18.5 million in taxes last year in Maine, they reported earlier this year. Nearly $6 million was in property taxes.

Local assessors contacted in Maine said the company maintains its properties are overvalued in the current real estate market. Wal-Mart supercenters are often one of the top taxpayers in the communities where they are located.

David Ledew, director of the property tax division for the Maine Bureau of Revenue Services, said the state does not keep track of abatement requests made to municipalities. He said commercial property owners with an assessment of more than $1 million can file appeals to the Maine Board of Property Tax Review.

A review of the past 10 years of actions taken by that board shows no appeals by Wal-Mart or other big-box stores.

Eric Conrad, communications director for the Maine Municipal Association, said the organization has not heard concerns from municipalities about Wal-Mart seeking to have property assessments reduced.

In Rockland, Wal-Mart has asked the city to grant it an abatement of $5.4 million on the 10.5 acres and 94,000-square-feet building it owned last year. The Wal-Mart property was assessed for $8.5 million before it was sold in December. Wal-Mart was the third highest property taxpayer in Rockland last year.

The abatement request was based on the sale of the Rockland property to Ocean State Job Lot for $3,125,000. The deed, however, imposed restrictions on OSJ and any subsequent owner for the next 25 years. Those restrictions prohibit the property from being used for a supermarket larger than 35,000 square feet. The restrictions also won’t allow a discount store of more than 50,000 square feet, a discount pharmacy, gambling operations, adult entertainment activities including the sale of sexually explicit videos or books, massage parlors or escort services.

Those restrictions are ones Wal-Mart has put on other properties it has sold, which also might help account for the sales below assessed values.

Ocean State Job Lot occupies 40,000 square feet of the store and is seeking tenants for the remaining space.

Rockland Assessor Dennis Reed said single sale is not justification for the company to receive the abatement for last year. He has requested more documentation from Wal-Mart to support its abatement request.

The abatement would amount to a $105,408 tax cut for the company.

Elizabeth Sawyer, the assessor South Portland and Westbrook, said when big-box stores sell properties they tend to do it because they have built new stores and the former property simply becomes excess to them. This means they will sell for less than they are worth, she said, presenting challenges to assessors.

In Ellsworth, Assessor Larry Gardner said Wal-Mart has asked for an abatement of $5.8 million on its supercenter that is assessed by the city at $20.4 million. The Ellsworth property totals 21 acres with a 200,000-square-foot building.

An abatement of that amount would mean a $93,000 annual property tax cut.

The request to Ellsworth was filed Feb. 7. The assessor said the city has requested more information from the company to support its position. He said among the information he is seeking from the company is leases with its tenants for properties it owns in other communities.

“Wal-Mart is a big, if not the biggest corporation in the world. You would think they have an entire crew ready to provide this type of information,” Gardner said.

He said such requests can be time-consuming if the company does not produce all the documents when it files a request.

The largest abatement request by Wal-Mart in Maine was made in Lewiston, where it has a distribution center. This past year, the company requested an $18 million reduction in the property that was assessed at nearly $59 million. Lewiston Chief Assessor Joe Grube said he granted a $5 million abatement that resulted in a property tax cut of about $66,000. If the full abatement request had been granted, it would have amounted to a tax cut of $238,000.

Lisa Morin, assessor for Augusta, said Wal-Mart requested an abatement of $7,390,000 on its supercenter the city valued at $19,046,000. The request was denied, but Wal-Mart asked her to reconsider it; she rejected the reduction again in January.

The appeal period has since expired on the assessment placed last year.

That abatement would have given the company an annual tax cut of $134,000 from Augusta.

Morin said responding to abatement requests can take considerable time, but Wal-Mart filed sufficient paperwork for her to make a decision.

Appeals of decisions by assessors can be made to municipal boards, county boards, the state or the courts.

Farmington Assessor Mark Caldwell said he rejected in early February an abatement request filed by Wal-Mart. The company asked for a $6.8 million reduction in the $14.1 million assessment on its property. The store was built in 1994 and had substantial renovations done in 2000.

That abatement would have resulted in a $107,100 annual property tax cut.

Wal-Mart also filed for an abatement in February from Oxford but later withdrew the request, assessors’ agent Donna Hays said. Wal-Mart asked the $11.5 million assessment on its supercenter be reduced to slightly more than $7 million. That would have resulted in a tax cut of about $54,000.

The company later withdrew its request, because Wal-Mart’s property was in a tax-increment financing zone. The town and state agreed to offer the tax incentive to Wal-Mart when it expanded its store to a supercenter in 1999.

Because the store is located in a tax increment financing zone, a portion of its taxes go to pay for a water line that was installed to allow the store to be located there, she said.

In Palmyra, Wal-Mart requested the assessment on its store be reduced from $10,681,500 to $6,020,000. Assessor Priscilla Jones said she denied the request.

That abatement would have resulted in a tax cut to Wal-Mart of $67,592.

In Falmouth, Wal-Mart leases a shopping center where it operates an 85,000-square-foot store. The town’s assessor said a tenant can seek an abatement if it has the approval of the owner, which Wal-Mart had. The town has the property assessed for $11,561,000, but Wal-Mart sought in February to have that reduced by nearly $4.3 million to $7.3 million.

That would have amounted to a $60,165 annual tax cut for the company.

Falmouth Assessor Anne Gregory said she reduced the property’s value by $381,500. Wal-Mart has until June 10 to appeal Gregory’s decision. This amounted to a tax cut of about $5,400.

Ruth Birtz, the assessor for Lincoln, said Wal-Mart requested the assessment on its 40,000-square-foot building be reviewed. The company contended that the $2.4 million assessment should reduced to 60 percent of its current level but has not yet filed a formal abatement request.

Birtz said the appraiser used by Wal-Mart told her the company was looking at its assessments in every community where it has stores. That appraiser also said the company was awaiting the outcome of its case in Rockland before proceeding with other abatement requests.

In the town of Mexico, Wal-Mart did not file for a formal abatement but provided the assessor with information maintaining the $7.2 million assessment there should be reduced by $1.5 million. The change, which was denied, would have cut the company’s taxes by $37,500 annually.

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