High court rules Racine apartment complex should get property tax refund

Listen to this article

The owners of the Regency West Apartments in Racine are in for a tax refund after the Wisconsin Supreme Court ruled Thursday that city officials had affixed too high an assessment to their property.

In a 5-2 decision attributed to Chief Justice Pat Roggensack, the court found that city of Racine appraisers erred in the assessed values they had assigned to a local 72-unit apartment complex named Regency West LLC. Those values, set at about $4.42 million in 2012 and $4.17 million in 2013, serve as the starting point for the collection of property taxes.

The court found that the city’s appraisers had incorrectly used a mass-appraisal method and an income approach in their assessment from 2012 and that they had similarly misused a comparable-sales method in their assessment from 2013. In the valuation from 2013, for instance, the appraisers had compared Regency West not with other Section 42 projects but Section 8 projects.

Regency West representatives had argued that the correct use of appraisal methods would have set the property’s value at $2.7 million in 2012 and $2.73 million in 2013.

The Supreme Court, in agreeing that the city of Racine’s methods were flawed, found it was not obliged to give city officials the usual deference that they receive in assessment matters. The decision overturned rulings handed down by a Racine County trial court and the state Court of Appeals in the same case.

The dispute now heads back to Racine County, where the trial court has been instructed to decide what amount of Regency West’s property taxes should be refunded because of the erroneous assessments.

Dissent in the case came from justices Shirley Abrahamson and Ann Walsh Bradley, who are generally believed to constitute the court’s left-leaning minority. Abrahamson wrote that Regency West had failed to present sufficient evidence that the assessments were excessive.

The Regency West complex was built between 2010 and 2011 to provide subsidized housing. Each building contains three four-bedroom units and four two-bedroom units. The property also has a community center containing a manager’s office and community room, and three standalone garages, each with 12 parking spots. By February 2012, all the apartments were rented.

The property’s assessments were first challenged in court in 2014, when Racine Circuit Court Judge Gerald Ptacek ruled that the city’s expert witnesses were credible, given their experience evaluating property in the area. He also ruled that the city’s assessments complied both with state law and standards found in the Wisconsin Property Assessment Manual.

The District 2 Court of Appeals affirmed Ptacek’s decision last year. Regency West appealed again, and the Supreme Court justices accepted the case in January.

Separately from the discussion of Regency West, Abrahamson used the end of her dissent Thursday to take the court to task for the way it had adopted email procedures for voting on petitions for review submitted by Supreme Court Commissioners. Abrahamson said the new rules were approved without any discussion with litigants, lawyers or the public.

She wrote she believes one goal of the new procedures is to silence dissenting voices like hers.

“We are a court of seven,” she wrote. “Each justice is only one voice of seven. I will continue to be one justice with one voice, but mine will not be a timid voice as I continue to serve the people of the state of Wisconsin.”

Wisconsin Law Journal staff writer Erika Strebel also contributed to this report.