Fiscal Note
The proposed resolution authorizes a $217,168 total tax refund pursuant to a settlement agreement and approves payment of $81,606 from City resources to represent the City’s share of the settlement. The subject property is located at 4750 S. Biltmore Lane. The city's share of the refund will be paid through a reduction in property tax revenue budgeted in the 2025 Adopted Operating Budget. Other taxing jurisdictions (Dane County, Madison Metropolitan School District and Madison College) will pay their respective shares of the refund. If approved by the Wisconsin Department of Revenue, tax refunds can be recovered through levy limit adjustments.
Title
Authorizing the settlement and payment of a tax refund for tax years 2022 and 2023 for SLJ-II LLC v. City of Madison, Dane County Circuit Court Case number 2023CV001685. Authorizing entry into settlement agreement and approving payment of approximately $217,168 from City resources to effectuate the settlement, $81,606 represents the City’s approximate portion of the settlement for both tax years. (District 17)
Body
Background
The subject property is a custom-built facility for the headquarters of a single tenant. Fairway Mortgage, tax parcel number 0810-221-0607-6 located at 4750 S. Biltmore Lane. The subject property is an anomaly for Madison as it contains four floors with high end amenities and is considered a premium office space. The assessment of this property was particularly challenging given the limited information and unique nature of the property.
The City set the assessments and the Board of Review sustained the assessments based on the best and current available information available at the time with limited sales that were comparable to the property in close proximity. The property owner brought suit in Dane County Circuit Court pursuant to Wis. Stat. § 74.37 as a claim for excessive assessment for both tax years 2022 and 2023. Both parties hired experts to conduct retroactive appraisals of the subject property pursuant to the lawsuit and engaged in discovery.
Settlement
Based on the additional appraisals and additional discovery conducted in this case the parties have reached a tentative settlement in this matter reducing the 2022 and 2023 assessments.
2022 assessment of $28,553,400 reduced to $23,000,000
2023 assessment of $28,373,000 reduced to $22,000,000.
The tentative settlement based on recalculated assessments for tax years 2022 and 2023 would result in a total refund of approximately $217,168. This resolution seeks approval of the settlement agreement with SLJ-II, LLC along with all other approvals necessary to carry out the settlement including adjusting the City’s revenues.
Under the proposed settlement, SLJ-II, LLC would be paid a total of approximately $217,168 as a refund for both 2022 and 2023 tax years and in turn the parties would stipulate to the dismissal of the lawsuit. SLJ-II, LLC, will not be paid any additional interest, costs or fees. This resolution authorizes the City Attorney to sign the Settlement Agreement on behalf of the City of Madison. The City’s share of the settlement is approximately $81,606.
The City Attorney and the City Assessor recommend the approval of the proposed Settlement Agreement.
Necessary Authorizations
This resolution
1. Approves the Settlement as outlined above.
2. Authorizes the City Attorney to sign the Settlement Agreement on behalf of the City.
3. Approves the payment in total of approximately $217,168 to settle tax years 2022 and 2023.
4. The City’s share of the settlement is approximately $81,606.
Resolution
WHEREAS, SLJ-II LLC pursued an action against the City of Madison for excessive assessment for its property located at 4750 S. Biltmore Lane for tax years 2022 and 2023; and
WHEREAS, SLJ-II LLC and City of Madison have reached a proposed settlement regarding the 2022 and 2023 assessments, which settlement the Common Council finds is in the best interest of the City; and
WHEREAS, the City Attorney, City Assessor, and Finance Director all recommend the approval of the settlement as described in this resolution; the City Attorney will subsequently enter into a Settlement Agreement for the following total tax refund of approximately $217,168 with no additional interest or costs.
NOW, THEREFORE BE IT RESOLVED, that the Common Council authorizes the payment of approximately $217,168 from City resources to SJL-II LLC, in full settlement for tax years 2022 and 2023;
BE IT FURTHER RESOLVED, that the Assessor and other City staff are authorized to file for reimbursement from other taxing jurisdictions pursuant to Wisconsin Department of Revenue procedures; and
BE IT FURTHER RESOLVED, that the City Attorney is authorized to sign the settlement agreement on behalf of the City of Madison; and
BE IT FINALLY RESOLVED, that the City’s share of the settlement is approximately $81,606.