Fiscal Note
This resolution authorizes the City, pursuant to the proposed settlement agreement, to make a payment of $495,000 to Walgreen Co. as full refund of tax overpayments originally made to all taxing jurisdictions for two Walgreen properties for tax years 2005-2008. The City’s share of the tax overpayments, $181,243, will result in reduced 2009 General Fund revenue. The remaining $313,757 will be recognized as a receivable from the other taxing jurisdictions and is expected to be repaid to the City in 2010 in accordance with Wisconsin Department of Revenue procedures governing such property tax adjustments.
Title
Approving Settlement of Tax Refund Litigation with Walgreen Co. for Years 2005-2008, Authorizing Entry into Settlement Agreement, Approving payment of $495,000 from City resources to effectuate the Settlement and amending the 2009 Operating Budget to reduce estimated general fund revenues by $181,243 to recognize the City’s share of Settlement Costs.
Body
Background
The City of Madison and Walgreen Co. have been engaged in litigation over the assessment of a number of Walgreen’s stores located in the City. The original litigation went to the Wisconsin Supreme Court, which rejected the City’s method of appraisal and adopted Walgreen’s methodology. Walgreen Co. v. City of Madison, 2008 WI 80, 311 Wis. 2d 158, 752 N.W. 2d 687 (2008). In that case, the Supreme Court ruled that, for property encumbered with a below market lease, the assessment must be reduced to reflect the lease, but that for property with an above market lease that enhances the value of the property, no adjustment may be made to the assessment. Pursuant to that Supreme Court decision, the City paid a judgment to Walgreen in the amount of $247,790.55, as authorized by resolution File ID # 14591 (copy attached). That payment represented taxes and interest owed for tax years 2003 and 2004.
Subsequently, the City and Walgreen Co. entered into negotiations concerning outstand...
Click here for full text