The City of Sun Prairie will refund $35,000 in property taxes to apartment owners who sued the city regarding tax assessments.

The Sun Prairie City Council approved settlements with two corporations on Tuesday, Nov. 16.

Otto’s Orchard Spring Venture, LLC, will get a $20,000 refund on its 2020 tax payment. The corporation owns townhouses and apartments at 1201 and 1221 Prospect Commons, 2987 Providence St. and 115 King St.

Otto’s Orchard Spring Venture, LLC argued in its lawsuit that the assessments should be lowered by $1.9 million. The company claimed that the 2020 property tax assessments were excessive compared with other commercial properties in the city and violated the Uniformity Clause of the Wisconsin Constitution. The settlement lowered property assessment from $6.7 million to $5.8 million.

FRED-Liberty Square LLC’s lawsuit against the city claims the assessments of its 940 Liberty Boulevard and 1301 School Street properties should be lowered at least $1.6 million. The corporation will get a $15,000 property tax refund as part of the settlement with the city. The revised property tax assessment is $7.1 million, lowered from $7.8 million. The properties are senior living housing.

The City of Sun Prairie, the Sun Prairie Area School District, Dane County, Madison Area Technical College and the state loses tax revenue when refunds are issued in settlements. Past tax assessments settlements have increased taxes for other city taxpayers.

Jake King, the city’s Communications and Diversity Strategist, said the city council determined that the settling these two lawsuits was in the best interest of the city and the community.

“With each case presented, the city takes into careful consideration if pursuing litigation or settlement leads to the best possible resolution,” King said.

The City of Sun Prairie recently settled property tax assessments lawsuits with Target Corporation in September, issuing a $64,241 refund to the company. The city has also refunds taxes to Woodman’s and Walmart in lawsuit settlements.

King said in 2017 and 2018, the city advocated for and supported Senate Bill 291 and Senate Bill 292 to close the dark store loophole. On April 16, 2019, Council passed a resolution in support of items in Gov. Evers Proposed Budget, which included closing the Dark Store and Walgreens loopholes.

The City Assessor’s office conducts revaluations to update the assessments to market value every other year.

“It is important to note that assessed values are only one piece in the development of property tax bills,” King said.

Sun Prairie attorney Don Millis represented the apartment owners in the recent lawsuits against the city. Millis said businesses use property assessment challenges to try to keep costs down. He also cited problems with mass assessment procedures that he said are even more difficult in a fast-growing municipality like Sun Prairie.

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