The Brunswick Walmart, located at 15 Tibbett’s Drive. The location is assessed at $16.9 million, but the company contests it is really only worth about $10 million. (Hannah LaClaire / The Times Record)

BRUNSWICK — Walmart, the world’s biggest retailer, claims it’s being over-taxed in Brunswick and in communities throughout Maine. But the company’s request would come at a cost to taxpayers.

Walmart has asked Brunswick to slash its taxable value by nearly $7 million for 2017 on the grounds that the building’s $16.9 million assessed value “exceeds the property’s fair market value;” a move that could cost Brunswick roughly $128,000 in tax revenue.

A shopper walks into the Brunswick Walmart on Wednesday evening. (Hannah LaClaire/The Times Record)

This is a common move for the retail giant, which has reportedly been appealing property tax valuations around the country for years, “looking for any relief they can get,” said Stephen Langsdorf, Brunswick town attorney.

“This is part of a very broad effort, where they go around the country challenging property tax valuations,” he said.

Walmart has hired Stavitsky and Associates, a property tax appeal law firm based out of New Jersey to handle the filings.

In 2017, then-Brunswick Assessor Cathy Jamison denied the company’s request for an abatement. At the time, Walmart claimed the property was only worth about $10 million, citing a Walmart appraisal that Langdorf said was “very, very flawed.”

Walmart then appealed to the local board of assessors, which also denied the request, before then appealing to the state board of assessment for review, Town Manager John Eldridge told the town council on Monday.

The town has hired Stephen Traub, an independent appraiser to appraise the 15 Tibbett’s Dr. property, he said. That appraisal is scheduled for June 10. Part of the State Board of Appeals process requires that the parties attempt to reach a mediated solution, which is upcoming. The potential loss of tax revenue from the seventh-highest paying property in town aside, the appraiser cost an additional $6,500 to $10,000. 

Walmart also filed a separate 2018/2019 abatement this spring, contesting again that the $16.9 million assessment “exceeds the property’s fair market value,” but valued the property at $11.2 million, $1.2 million more than the 2017 request. If granted, Walmart would pay about $212,000 in annual property taxes, rather than the $320,000 it paid in 2018. Brunswick Assessor Nick Cloutier denied the request and Walmart has 60 days to file an appeal.

The town of Brunswick hired Massachusetts firm KRT Appraisal to do a comprehensive revaluation of all residential, commercial and industrial properties in 2017. Before the revaluation, Walmart’s assessed property value was about $8.9 million, Cloutier said.

A statewide trend

“This is pretty customary for large businesses” to contest property valuations, Cloutier said.

Indeed, the trend is mirrored across other Maine communities. 

The Ellsworth American reported that Walmart filed an abatement request for the 2017 tax year asking the property value of the store be cut from $20.1 million to $10 million, a request that would have cost the town $158,000 in yearly property tax revenue.

Last year, The Advertiser Democrat reported that Oxford officials denied a request lowering the value from $11.5 million to $8 million, which would have reduced the company’s taxes by $52,000.

In Thomaston, too, the town denied a request for an abatement lowering the assessed value from $15.89 million to $7 million, which the Courier Gazette reported would have meant a $172,000 reduction in taxes.

The Ellsworth American also reported that in 2017, Walmart attorneys filed requests for more than $41 million in tax abatements around the state, not including millions more in appeals for several of its Sam’s Club locations.

Last month, Bangor reached a mediated settlement with Walmart, town assessor Philip Drew said Wednesday.  They settled on a $17.7 million property value, significantly higher than Walmart’s requested $12.5 million, but lower than the city’s assessed $19 million. The city issued Walmart a $33,500 tax refund. 

In Augusta, the process is just getting started.  Assessor Lisa Morin told The Times Record that she denied an abatement request from Walmart on Tuesday which argued that the assessed $19.5 million property is only worth about $13.5 million. If granted, it would lower the location’s tax bill from almost $400,000 to about $283,000. Walmart has approached them about it in the past and occasionally slight adjustments have been made, she said, but this was the first formal appeal to the assessor they had received from the company.

The “dark store loophole”

Some of these appeals are based on what is known as a “dark store loophole,” which allows big box stores like Walmart, Target and Lowe’s to reduce their property tax value by contending that their fully operational businesses should be assessed the same as vacant buildings.

This though, Langsdorf said, is not a viable argument, as an established, bustling store — like the one in Brunswick — is going to have a higher value than a shuttered building. It is an argument he has seen before but is one that he does not expect will come into play in Brunswick.

The valuation is further complicated by the fact that once these big box stores move and build a new store (sometimes just a few miles down the road, Morin said), there are often restrictions in the original deed limiting what can go in the location — for example, a Home Depot may move out and say that it cannot be filled by another home improvement store like Lowe’s, or that a former Walmart cannot be home to another store like Target. This leaves municipalities with not only a potential loss in tax revenue, but also a vacant storefront that is difficult to fill, Morin said.

The operations extend beyond state lines. In 2011, Good Jobs First, a national policy resource center promoting corporate and government accountability in economic development published a report claiming that Walmart deprives state and local government of more than $400 million per year through “a variety of tax avoidance schemes.”

“It has extracted more than $1.2 billion in property tax abatements, sales tax rebates, infrastructure and site improvements, and other economic development subsidies from state and local governments around the country,” the report said. “Walmart may be more of a fiscal burden than a benefit to many of the communities in which it operates.”

Walmart is ranked No. 1 in of Fortune 500 companies and had more than $500 billion in revenue in 2018 and made more than $6.6 billion in profit, according to the magazine. It operates more than 5,000 stores across the U.S.

The company contends that its conflict with towns such as Brunswick is necessary to fight what they see as unfair taxation.

“Fair property taxation is critical to our efficient operation and ability to save our customers money, and we strive to work directly and collaboratively with local jurisdictions to reach a fair market value,” said Delia Garcia, senior director of communications for Walmart. “The challenge is that fair market value changes and based on current market conditions we believe the value of the property is lower than the assessed amount,” she said of the Brunswick location. “Similar to other Maine businesses and residents, we are simply seeking a fair market value for the taxation of our stores.”

hlaclaire@timesrecord.com