Keweenaw Report Your Source for Local News and Sports
Back in 2018, Walmart began litigation suing Houghton in the state tax tribunal court to lower their tax value by 60% by using the legal strategy called “dark store theory“.
In February the city of Houghton began moves for litigation in federal court due to the city’s belief that actions taken by Walmart in the tax tribunal court violated the development agreement signed with the city.
The appeal violates the development agreement made with the city of Houghton after the city provided Walmart with land and other infrastructure. In return, Walmart agreed to increase the store’s assessed value to cover this these and other expenses.
Walmart is seeking a lowered valuation of its local store, spurring a 6-year retroactive $1.2 million refund and a reduction in future property taxes.
“If you look at what a win looks like for [Walmart], and what they’re asking for, you look at not only the decrease in taxable value of the store, but they’ve also asked for retroactive relief back to 2018. And if you take that retroactive relief, and multiply that over [six] years, that’s well over $300,000 that we have to come up with; not to mention the attorney fees. So really, looking at a contingency here, where there’s over $400,000 plus hole in part of our budget, and how do we deal with that” – Houghton City Manager, Eric Waara
If Walmart wins, this means Houghton would have to make budget cuts to schools, veterans services, the local library, and county medical care facilities. It will also decrease the funds for repaving and other quality of life services that come out of property taxes in that district.
The court date is set in June.
