Sep 2, 2015

Kmart drops appeals of its property taxes

There will be no blue light special on property taxes this year.

The owners of the Cody Kmart had planned to ask Park County commissioners to slash the taxable value of their property and, in turn, save the company a few thousand dollars in taxes. However, they changed their mind at the last minute, meaning no property tax appeals were heard by commissioners this year.

Kmart’s owners had argued that the Park County Assessor’s office is drastically overvaluing the land that houses the store.

The Cody Kmart. Cody News Co. photo by CJ Baker
The assessor’s office concluded that, for tax purposes, the 5.27 acres are worth about $914,000. Kmart’s representatives, meanwhile, said the land’s only worth about half that, around $459,000.

An attorney for Kmart parent company Sears Holdings, Kyle Sheehan, reached that reduced figure by comparing Kmart’s property to Walmart’s. The county has valued Walmart’s 17.99 acres of land at around $1.75 million — well above the overall value of Kmart’s land, but less per square foot. In a letter to the assessor, Sheehan said Kmart’s property should be actually be cheaper per square foot because its location isn’t as good as Walmart’s.

Walmart “currently sits on a more retail-centric corridor, making it more valuable as a retail piece of land,” Sheehan wrote. To support that argument, he noted that Walmart built its store on West Yellowstone Avenue years after Kmart built its business on 17th Street.

“The (Walmart) property was more recently developed, indicating where the more valuable retail land is," Sheehan wrote.

Assessor Pat Meyer has a different take.

“That's a valuable piece of property,” Meyer said of Kmart’s land.

A Kmart representative argued that the store's property should be valued less than Walmart's, saying Walmart has the better location. 

He said people traveling in or out of Cody from the south or east pass Kmart, while traffic on the west side of town near Walmart tends to slow down in the winter.

As for comparing Kmart’s and Walmart’s values on a per-square-foot basis, Meyer said as a general rule, larger pieces of property (like Walmart’s) tend to fetch less per square foot than smaller parcels.

The assessor’s office and Kmart representatives were scheduled to take their cases to the commissioners at an Aug. 18 hearing, but Kmart dropped the appeal the day before.

If Kmart had gone through with its tax protest and convinced commissioners to slash the property’s fair market value, the business would have saved around $3,000 in property taxes this year.

Kmart did not object to the assessor’s $1.7 million valuation of the store itself.

~By CJ Baker

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