NEW ALBANY —
City officials believe it’s worth enough to New Albany financially to spend $75,000 to potentially keep two large corporations from winning an appeal of their assessed property tax values.
The New Albany Redevelopment Commission on Tuesday approved two contracts worth up to $75,000 combined for a Real Estate firm to represent them against The Home Depot and Meijer.
According to David Duggins, director of redevelopment and economic development for the city, the two corporations have asked for a reassessment of their property tax rates.
The amounts are substantial, according to Duggins. The Home Depot, which is located at 2239 State St., is further along in its appeal than Meijer, according to Duggins.
He said The Home Depot is requesting that its assessed property value be reduced to $3 million, which is half the amount it was originally rated at.
“These are moneys that are substantial, and they’re long-term,” Duggins said.
The two corporations are important pieces of the city’s tax-increment financing system.
The Home Depot is located within the State Street TIF district. At 4206 Charlestown Road, Meijer is one of the prime businesses within the Charlestown Road TIF district.
Once a TIF zone is approved, the property tax rates are frozen. Typically improvements are made in those districts, as was the case, for example, with the State Street and Charlestown Road TIFs, and property values increase.
The increment in the property value after the rates were frozen is reserved for TIF collections, and that money is used for infrastructure and quality-of-life projects.
For example, the city is paying back a $19.6 million bond for a new aquatic center, multiuse recreational facility and rehabilitation of Binford Park with TIF funds.
Duggins stressed that no current projects would be jeopardized even if the appeals are granted, but added that over several years the amount of money the city could lose would be significant.
“We don’t want to set a precedent either,” said Dan Coffey, a New Albany City Councilman and member of the redevelopment commission.
Other companies may begin challenging their tax assessments if the city doesn’t draw a line with The Home Depot and Meijer, he continued.
Coffey was especially critical of The Home Depot, saying the company’s sales at the State Street location obviously haven’t dropped by half.
He added that large corporations consistently get tax breaks and that it’s unfortunate that two national companies would seek to diminish their contributions to the local community.
But sales aren’t calculated as part of property tax assessment.
Duggins said city officials have spoken with Floyd County Assessor Trish Byrd about the situation, and that a local board will first hear the cases.
Duggins said companies like Meijer and The Home Depot employ powerful attorneys; therefore, he added it’s necessary for the city to have qualified representation to defend its position.
The commission approved hiring R.E. Research Associates, which is based in Lafayette. The firm is led by Real Estate Appraiser Thomas Morlan, and Duggins said he has extensive experience dealing with such issues.
Typically big cases related to property tax assessments end up in mediation, and Duggins said Morlan would represent the city if it comes to that point.
“It’s not perfect and they’ll probably be some compromise,” Duggins said of mediation hearings.
Though the price tag to challenge the appeal is hefty, commission members said they owe it to taxpayers to keep the field level by ensuring every property owner is paying their fair share.
“I don’t think we have a choice,” said Irving Joshua, president of the commission.
A spokesman with corporate offices of The Home Depot said late Tuesday afternoon the company is in the process of discussing the matter with its tax department, and that more information will be provided at a later point.