ELLSWORTH — Walmart is pushing forward with an appeal of its 2021 property tax assessment, with the city Board of Appeals ruling in favor of the city on what records Walmart must provide.
“It’s a good old-fashioned discovery dispute,” Board of Appeals Chairman Jeffrey Toothaker said of the legal tussle over whether the retail chain should turn over copies of store leases and gross sales data as city Assessor Larry Gardner requested.
Walmart’s refusal to provide the records had tabled the tax appeal when the board met Sept. 13.
Walmart has a history of appealing its property assessments to the municipalities its stores are located in. Often those municipalities aren’t inclined to mount a court fight.
“We’re the only [city] that hasn’t settled with Walmart,” Gardner said. “They ask for 50 percent off every place they go. I don’t believe in just settling just to be settling. I want them to prove their value.”
The 195,000-square-foot Walmart on Myrick Street is assessed by the city at $20.78 million, including the building and land. Its 2021 property tax bill was $390,110.
Gardner noted that towns have settled for anywhere from a 2 to 12 percent reduction in their assessed values of Walmart stores.
He wants to review about 600 Walmart leases in Maine and the U.S. to help determine the value of the Ellsworth superstore.
Walmart attorney Bruce Stavitsky said the request was unduly burdensome, in legal terms, especially considering that the Ellsworth store is owned, not leased. Toothaker agreed.
“I think this is a fishing expedition,” Toothaker said.
But Gardner pressed on, noting he reviewed leases for the Mill Mall and Maine Coast Mall to help determine their square-foot value, one of the methods used to assess commercial properties.
The rest of the board agreed, voting 4-1 to allow Gardner to review Walmart leases. He and Stavitsky will negotiate how many Walmart will release to the city. If negotiations stall, the board will take the issue up in December.
The board also unanimously approved Gardner’s request to review gross sales receipts from the Ellsworth Walmart for a five-year period despite Stavitsky’s legal objections.
“There’s nothing in Maine law that says we must provide gross sales in terms of appraising a property,” he said, adding that the financial records are proprietary information.
He also objected to examples given by the city to support the request, which were businesses that provide services, not goods.
“Are you going to value McDonald’s on how many hamburgers they sell?” he asked. “Because that’s what the assessor is asking [us] to do.”
Gardner held that a percentage of sales of the goods would have a direct relationship to the base rent, “which would be the lease.”
“So, there’d be that relationship there,” he continued. “You’d be able to coordinate [the information].”
City attorney Ed Bearor said that if Gardner could show why gross sales are important to the valuation of the store, he is entitled to that information and the city can keep those records confidential. This means board discussion on the records may be held in executive session, Toothaker noted.
“Without a doubt, you are entitled to the information that you asked for,” Bearor wrote Gardner on Oct. 15. “Furthermore, pursuant to section 706 – A, this failure on the part of Walmart to provide you with the information you have requested is grounds upon which the local board of assessment review should deny this appeal.”
Gardner’s position on the current Walmart property tax appeal mirrors his objections to an appeal by Walmart to the State Board of Property Tax Review over its 2017 assessment. The city Board of Appeals had granted a partial abatement, but Walmart seeks a full 50 percent reduction in property tax value, from approximately $20 million to $10 million for city taxation purposes.
At stake is as much as $180,000 in property tax for 2017 and each year forward, if the state appeal is successful, as the new assessment would be retroactive to fiscal year 2017.