The city will re-evaluate more than 400 businesses after finding that many commercial properties were severely undervalued.

City administrator Patrick Marsh announced the initiative at the Common Council’s meeting on Tuesday, Feb. 11. The city assessor, who was hired last year, found discrepancies going back to 2007 due to an employee error and lack of leadership in the assessment department, Marsh later wrote in an email to the Star.

The discrepancies are severe to a point where Marsh told the council Tuesday they are at a level that concerns him.

Marsh said he couldn’t estimate how much valuations might increase for businesses on average, and said he plans to wait for the assessor to re-evaluate properties before offering a number.

Marsh said the revaluations will ensure there’s equity in the tax distribution within the city and valuations are comparable to surrounding municipalities.

“The key here is fair and equitable among our businesses and residents. With the discrepancies we’ve seen recently that advance several years back, that hasn’t been the case.”

Some of the city’s commercial properties won’t be affected by the revaluation process, which Marsh said would be taking place over the next three months. Manufacturing companies like Sub-Zero and Promega are evaluated by the state and are exempt from that process, he said.

Any revaluations that might occur for commercial properties would be reflected on 2021 tax bills. The city won’t be collecting back taxes for incorrect valuations.

In June, business owners will be able to go through the open book process to contest updated valuations.

The city’s valuation of commercial properties was called into question last year by Hy-Vee, Inc. over its Fitchrona Road location. The Iowa-based corporation claimed that the valuation for the store, set at $11.8 million, was too high and should be lowered to $7.5 million.

The company’s lawsuit claimed the property was assessed solely on estimated costs, rather than data of comparable sales.

Email reporter Kimberly Wethal at and follow her on Twitter @kimberly_wethal.