## Facts

- Lowe’s owned a big-box home-improvement retail property in the City of Delavan, Wisconsin.
- In 2013, the City performed a full revaluation using the cost approach and assessed the property at $8,922,300.
- The City carried the 2013 valuation forward for the 2016 and 2017 tax years as maintenance-year assessments.
- Lowe’s filed excessive-assessment actions for 2016 and 2017, arguing the assessments overstated fair market value and should not receive the presumption of correctness because they allegedly failed to follow the Wisconsin Property Assessment Manual.
- At a bench trial, Lowe’s expert used a sales-comparison approach and valued the property at about $4.6 million, relying on comparables including receivership sales and properties that took two to four years to sell.
- The City’s expert used a sales-comparison approach with occupied properties and ongoing market-rate leases, valued the property at about $9.2 million, and testified that typical exposure times in the area were about two to 18 months.
- The circuit court found the City’s appraisal testimony significantly more credible and upheld the 2016 and 2017 assessments; the court of appeals affirmed.

## Issues

1. Whether the City’s 2016 and 2017 assessments were entitled to the statutory presumption of correctness where the taxpayer alleged noncompliance with the Wisconsin Property Assessment Manual and improper inclusion of business value.
2. Whether Lowe’s proved the assessments were excessive (above fair market value) in light of competing appraisal evidence and the circuit court’s credibility findings.

## Decision

- The Wisconsin Supreme Court affirmed.
- The Court held the presumption of correctness attached to the City’s 2016 and 2017 assessments.
- The Court held Lowe’s failed to prove the assessments were excessive.
- The Court deferred to the circuit court’s credibility determinations crediting the City’s appraiser over Lowe’s appraiser.

## Legal Principles

- A municipal property assessment is presumed correct, and the taxpayer bears the burden to rebut that presumption and prove the assessment is excessive.
- Compliance with the Wisconsin Property Assessment Manual is evaluated under a substantial-compliance standard; perfect conformity with every detail is not required to retain the presumption.
- In determining fair market value, valuation methods recognized by the Manual (including cost and sales-comparison) may be used, and appraisals may discount distressed or abnormal transactions as unrepresentative of ordinary, arms-length market conditions.
- Use of comparables involving occupied properties and market-rate leases may be consistent with valuing real estate at market value and does not, without more, constitute taxation of business goodwill.

## Conclusion

The court upheld the City’s maintenance-year assessments because the assessment methodology substantially complied with the Property Assessment Manual and Lowe’s did not carry its burden to overcome the presumption of correctness or to prove the assessments exceeded fair market value.


Lowe's Home Ctrs., LLC v. City of Delavan, 405 Wis. 2d 616, 985 N.W.2d 69 (Wis. 2023)