Retailer may try to cut its property value in half.
By Wally Perez
Lowe’s Home Improvement is attempting to get the Bexar County Appraisal District to lower the value of Lowe’s stores around Bexar County to that of vacant stores.
Big box stores, or physical, large retail buildings, have attempted to sue counties using the dark-store strategy.
The strategy is a way for the company to pay less on their property taxes by claiming they should be valued as if the buildings were empty, a dark-store, but are not.
Big box retailers such as Lowe’s argue that buildings over 100,000 square feet would be difficult to sell if the business left in addition to any deed restrictions.
Lowe’s has been successful with this strategy in Michigan and Indiana, where major retailers have driven down property values and tax revenue.
A victory for Lowe’s could cost area taxpayers $272 million over five years.
Lowe’s is suing Bexar County to cut property values in half for 10 stores. The decision by the panel only applies to four local stores.
During a board meeting Jan. 17, District 7 trustee and board Chair Yvonne Katz said Northside Independent School District, Alamo Colleges and taxing entities around the city attended a meeting to discuss potential effects.
Katz said property values for the store would drop to $20-25 per square foot, rather than the current $85-90 per square foot.
Katz said Bexar County would suffer a loss of $64.3 billion in commercial property value over a five-year period for Lowe’s and other retailers such as Home Depot Inc., Target or Walmart, assuming they would implement the same strategy.
“We met to look at what we needed to do as the taxing entities of San Antonio,” Katz said. “The property taxes need to be made up by someone — the local homeowner and taxpayers.”
District 8 trustee Clint Kingsbery said if Lowe’s is successful in its bid to reduce its property tax burden, then other big box stores will follow this trend.
“It could be catastrophic to the tax pool, which pays a large portion of the operating costs for ACCD,” Kingsbery said in an email to The Ranger Jan. 31.
Diane Snyder, vice chancellor for finance and administration, said the Alamo Colleges’ role is to work with the Bexar County tax assessor and other local public agencies to increase visibility of the issue.
Snyder said she briefed the board of trustees in November so they would be prepared if the situation progressed.