OXFORD — Retail giant Walmart has asked the Board of Assessors to reduce its real estate valuation by more than $3.5 million.
The board said “no.”
At the April 19 Board of Selectmen’s meeting, the board, which also acts as the Board of Assessors, voted 3-0, to turn down the request of the applicant, Walmart Real Estate Business Trust, to reduce the valuation from $11,502,500 by $3,502,500. Selectmen Caldwell Jackson and Scott Hunter were absent.
The requested devaluation would have reduced the amount of taxes the town receives from Walmart by about $52,000.
Attorney Bruce J. Stavitsky of Stavitsky & Associates in Fairfield, N.J. who is representing the applicant, said in the application for abatement dated February 16, that the applicant believes the town’s assessment exceeds the property’s fair market value.
But the town’s Assessors Agent, Donna Moore Hays, disagrees. In a letter dated April 20 to Stavitsky, Hays said to qualify for an abatement, a property owner must show that its valuation is excessive in comparison to other similar properties in the same municipality or that the assessment is illegal or void.
“It is the opinion of the town that the assessed value is reasonable and no supporting data was provided to lead to another valuation,” she wrote.
The applicant has 60 days to appeal the decision to the State Board of Property Tax Review, Hays said.
“The burden of proof is on the taxpayer,” she told the selectmen. “There’s nothing here to warrant a tax abatement.”
Go Fishing
This is not the first time Walmart has tried to get an abatement.
Hays, said not only has Walmart tried this before, but it appears Walmart does this as ” a way of business.” A few towns may provide some relief, so Walmart “starts fishing,” in other communities, she explained.
In Fiscal 2018, the town valued Walmart’s building at $10,465,100 and the 35 acres it sits on at $1,037,400 for a total assessment of $11,502,500. Based on that valuation, the company paid $169,086.75 in property taxes, a nearly $20,000 increase over the previous year.
During Fiscal 2017, Walmart Real Estate paid $151,833 in taxes based on an assessment of $11,502,500.
In recent years Walmart has traditionally been the second highest tax payer in town, second only to BB Development, owner of the Oxford Casino.
In Fiscal 2017, for example, Walmart Real Estate had $1,037,400 in land value and $10,465,100 in the value of its building at 1240 Main Street for a total $11,502,500. BB Development LLC (Oxford Casino) taxable property was valued at $21,453,300, according to town records.
While Walmart is a large taxpayer, Chris Bachman, principal at the accounting firm of RHR Smith & Company of Buxton, who has conducted the town’s audit of its financial books for the past two years, told the Advertiser Democrat last year that the town is not dependent on any one taxpayer to keep its operations afloat.
Walmart represented 2.65 percent of the total valuations in the town of Oxford. The property assessment of the largest taxpayer, BB Development, represented 4.95 percent of the tax base. Robert Bahre, the listed owner of the third highest assessed property at 2.21 percent is followed by Central Maine Power at 1.20 percent of the overall assessment. The remaining seven property owners of the top ten represented less than one percent of the overall real estate valuations.
Economic dependency means the taxes paid by a taxpayer are significant (10, 12, 15 percent or more) in terms of the entire town’s tax base, Bachman said. A town like Wiscasset, whose one major business, Maine Yankee, was paying 96 percent of the town’s budget 20 years ago, was financially unprepared when Maine Yankee abruptly dismantled its reactors and laid off some 600 workers in 2013.
Other towns
Oxford is not the only community where Walmart where is seeking reduced assessments.
The requests follow an announcement in January that the company would raise its starting wages for U.S. store workers beginning in February and offer some employees bonuses following passage of business tax cuts in Washington.
Last month, Walmart asked the Thomaston Board of Assessors for a nearly $9 million reduction in its property assessment, from $15,889,373 to $7 million, That would result in a tax reduction of $172,453, according to a report in the March 30 Courier Gazette. the request was denied.
Like the request in Oxford, the Thomaston board denied the request because Walmart did not submit supporting documentation.
The retailer has asked for tax abatements in other communities across the state including Sanford, Windham, Biddeford, Waterville, Ellsworth, Bangor and Houlton, according to newspaper reports.
Walmart last did a state-wide blitz seeking tax reductions in 2014.
At that time, Walmart’s communication director for the eastern division David Wertz, told the Bangor Daily News that the requests for abatements were a part of the company’s regular review of its properties and tax payments nationwide.
He told BDN that whenever the property assessment was questionable, the company would challenge them.
And even though it appears Walmart has had little success in getting Maine communities to agree to lowering its tax assessments, it’s a habit that has apparently been going on for years and one that has been challenged by watchdog groups, including Good Jobs First based in Washington D.C.
Challenge
Good Jobs First, a national policy resource center for grassroots groups and public officials that, in part, promotes corporate and government accountability in economic development, has criticized the retailer for shortchanging local communities and their taxpayers.
“Once a store has been in operation for a while, Walmart frequently challenges the assessed value that local officials assign to it for tax purposes,” Good Jobs First wrote in 2007 in what it called the first ever investigation of Walmart’s property tax records. “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.”
It has done so in a variety of ways, Good Jobs First reports, including seeking lucrative property tax abatements, tax increment financing, infrastructure assistance and other forms of economic development subsidies and using “an army of lawyers and consultants” who challenge the property tax bills.
“These practices are not illegal,” notes Good Jobs First Executive Director Greg LeRoy, “but taken together they deprive state and local governments of a sizable amount of revenue desperately needed for vital public services such as education and public safety.”
Oxford, and many other communities, such as Lewiston, Waterville and Augusta, for example, provide some form of tax breaks. Oxford has a tax increment financing (TIF) with Walmart on a portion of its 62,000 square foot facility. That TIF agreement expires next year, according to officials.
Walmart, which has 25 retail units in Maine as of September 2017, three discount stores and three Sam’s Club’s plus a distribution center in Lewiston that says it employs more than 6,700 employees with an average full-time pay of $14.20 per hour.
According to Good Jobs First reports, in at least one case, the State of Maine has also provided a Business Equipment Tax reimbursement worth $4.7 million and an employment-tax increment financing plan (through which Walmart receives a percentage of qualified employees’ income tax withholdings) valued at $2.4 million, assuming 450 jobs were created.
Delia Garcia, Walmart’s senior director of communications, said Tuesday morning that the company is simply doing what any other property owner would do if they felt their property was over assessed.
“Property values are dynamic and change with market forces. Based on current market data, we believe the property has been over-assessed and we have requested an initial review of the assessment, which is an opportunity provided to all property owners under Maine state law.”
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