Council endorses measure against dark stores

City officials agree to donate to League of Municipalities effort

The city of Shawano on Wednesday joined a growing effort to change a state tax loophole that allows big box stores to claim properties they vacate should be considered virtually worthless for tax purposes, and that new properties they move into should be valued by the same standards.

The Shawano Common Council unanimously approved a recommendation by the finance committee to donate $1,000 to the Wisconsin League of Municipalities’ effort to organize an end to the dark stores loophole.

“It’s affecting cities like us substantially and we’re losing all that assessed value,” said Assistant City Administrator Eddie Sheppard.

Sheppard said the league has been trying to get the word out and get people in communities to understand the significance of the tax loophole.

“If you lose the assessed value on these businesses, communities have to make up that tax revenue somewhere,” Sheppard said, “and it could be falling onto residential properties.”

Sheppard said the problem extends beyond the city of Shawano.

“This is not a Shawano problem; this is a state problem,” he said.

It was the Walgreen’s chain that led to the loophole, and Sheppard explained how it works.

“The dark store idea is that Walgreen’s has an old store, they move into a new store,” he said. “They’ve been successful in arguing that because their old property is essentially worthless, because it’s a Walgreen’s and nobody wants to move into a Walgreen’s, and nobody would pay the market value for that, that their brand new building that they just built for $3 million is also basically worthless.

“I don’t think that’s accurate, but they’ve been successful in doing that and now other chains have followed suit.”

The Shawano County Board voted against a similar proposal last month, which would have called for a referendum. The election would have cost the county $4,000, but many supervisors felt the action was pointless, as it would still require the Wisconsin Legislature to pass a law closing the loophole.