Mount Pleasant tries to combat 'dark stores' with ordinance

Mount Pleasant tries to combat 'dark stores' with ordinance

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MOUNT PLEASANT — The village of Mount Pleasant has been battling corporations in court over property assessments — now it has another arrow in its quill in the form of a village ordinance.

The village has been involved in several lawsuits regarding the “dark store” loophole in which commercial property owners can challenge their property assessment with local municipalities to get a lower tax rate when comparing their property values to those of a shuttered business.

Now, with a new village ordinance in place, commercial developers will have to provide information related to costs of construction and possible sale price to the village.

The ordinance is an attempt to curb lawsuits filed against the village challenging their assessment.

The village recently settled a lawsuit with Roundy’s in which the village, county, Gateway Technical College and the Racine Unified School District had to pay back thousands of dollars to Roundy’s.

On Nov. 11, the Village Board voted 6-1 to approve the ordinance. Trustee Ram Bhatia was the lone “no” vote.

Debate on ordinance

Village assessor Dan McHugh said it is necessary for the village to know the costs to constructing a commercial property, plus the profit margin of what they plan to sell the building for.

“And ultimately, that’s what we have to assess them at, what it’s going to sell for,” McHugh said.

McHugh said understanding the cost to build a building is the best indicator of its value when assessing the property.

“Commercial property developers generally are not averse to sharing that information,” McHugh said. “Honestly, we don’t broadcast it; it’s something that goes into our files. It isn’t made public unless someone makes an open records request.”

Bhatia had an issue with a governmental body requiring businesses to share profit information.

“I support the idea, we should know, we should make it mandatory … to know the value of the property so we can use that for the assessment,” Bhatia said. “But I personally have a problem, any government asking private business to share their profits.”

DeGroot said to Bhatia that profit margins are “baked in the cake” of what they plan to sell it for and it “adds to the value of what the final assessable product is.”

“If somebody is building something and they don’t want to share that information with Dan, Dan has nothing to work with, he has to pull it out of his head and his best guess,” DeGroot said. “By putting this ordinance in place, any developer wishing to build commercial property in the village of Mount Pleasant knows the rules upfront in advance.”

DeGroot said the ordinance has been needed in the village for several years.

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