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Council opposes tax tribunal reappointment

ESCANABA — The Escanaba City Council took a stand against the reappointment of a Michigan Tax Tribunal judge who ruled against the city in its fight with Menards over the so called “dark store” tax theory.

The theory, which has been a hot button issue in communities across the state, challenges traditionally used assessment practices by arguing that assessments for business properties — usually big box stores — should be equal to the value of the property if the building were empty because the business’ operations do not fundamentally alter the property. However, the issue is complicated by the common practice of businesses putting restrictions on their deeds that would prohibit a competing business from taking ownership of the property if the current owner were to cease operations. These restrictions along with the nature of box store construction can cause resale values to plummet, deflating assessment values.

A challenge from Menards against its assessed value put the city into a years-long battle, with other taxing entities like Bay College and Delta County joining the fight. Because the outcome of the legal battle is likely to set case law, other municipalities have also contributed financially to the city’s fight.

However, the city took a blow earlier this year when Michigan Tax Tribunal Judges Victoria Enyart and Preeti Gadola rejected an appeals court ruling in the case and required the city to reduce the taxable value of the Menards store in Escanaba and reimburse the store for previous years’ taxes.

Thursday, the council passed a resolution opposing Enyart’s reappointment to the tribunal. The two-page resolution claims “Victoria Enyart has no legal training or background, is not competent to render decisions on Michigan law, and is, historically, among the most frequently reversed members to ever be appointed to the tax tribunal …”

While the resolution was passed unanimously, it wasn’t without discussion. Council Member Tyler DuBord raised concerns about the council setting a president by weighing in on any sort of political appointment.

“I looked back in the history, and unless I’m wrong the council has never taken a stance like this for any positions … political positions or judicial positions that the state of Michigan has appointed. So I guess I’m a little hesitant of starting to do this as a council,” said DuBord.

Mayor Marc Tall, who described himself as “an enthusiastic voter in support of this matter,” felt this case was unique.

“In this particular case, especially by the city of Escanaba, we have been hurt by the decisions made by the tax tribunal, including Victoria Enyart, to allow big box stores to not get a fair tax assessment, and we’ve been fighting this battle for years. It’s cost us lots of money to argue this in the courts, and this is another step we can take in that fight, and I have no hesitancy to take this unusual step,” he said.

In other business, the city approved a Brownfield Redevelopment Plan submitted by developer Proxima for the redevelopment of the site of the former Delta County Jail. The plan includes a variety of items that Proxima will be reimbursed for through tax incremental financing that are necessary to build a hotel at the site.

The council also approved a partial vacation of an alley near the former Elmer’s Restaurant, where Bay Bank intends to construct a new branch. Mayor Marc Tall was the only council member to vote against the vacation. He expressed concerns over the language of the motion, which he felt would not require the bank to install a turn around if the alley were to be closed as required by city rules. City Manager Patrick Jordan stated during the meeting he felt the requirement could be addressed by the planning commission during the site plan process.

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