Hy-Vee, Inc. is suing the City of Fitchburg for what it is calling excessive taxation.
The Iowa-based corporation has a grocery store located on the city’s western side, at 2920 Fitchrona Road, and it is claiming the city’s assessment of the property was $4 million higher than the fair market value.
In a complaint filed on Wednesday, Nov. 6, the corporation claims its property assessment was based solely on estimated costs, rather than including data on comparable sales. Sales of comparable properties are rare and are typically much lower than the cost of manufacturing such buildings.
According to the complaint, Hy-Vee, Inc. believes the store should be valued at $7.5 million, rather than the $11.8 million assessment the city made in 2019.
The store was assessed at $12.6 million in 2018.
The legal principle of arguing cities are overvaluing properties based on their cost has been tested in recent years with some success by Walgreen Co. Walgreen’s stores are frequently built to appear as two stories on high-traffic corners and including drive-thru amenities that have limited resale value, and the company has argued successfully in both Madison and Verona that its stores have been overvalued.