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High court to weigh in on Racine property tax assessment challenge

The Wisconsin Supreme Court is scheduled Thursday to weigh in on a tax assessment dispute between the city of Racine and the owner of a nine-building, 72-unit apartment complex.

The 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 city had assessed the property at $4.42 million in 2012 and then $4.17 million in 2013. Regency West LLC sued the city in 2012 and 2013, alleging that it had paid excessive property taxes in both years.

Regency West has not been successful so far, having suffered losses in two state courts.

At trial in Racine County Circuit Court, Regency West argued the city should have used a different method to appraise the value of the property and presented expert testimony from an appraiser who specialized in appraising subsidized housing. That appraiser set the property’s value at $2.7 million for 2012 and $2.73 million for 2013.

The city argued the assessments were correct, presenting expert testimony from the assessor who appraised the property, the chief assessor, and two outside appraisers who had spent most of their careers at the Milwaukee Assessor’s Office.

City officials noted that assessments are generally presumed correct, unless they conflict with state law or the Wisconsin Property Assessment Manual.

Racine Circuit Court Judge Gerald Ptacek found in 2014 the city’s witnesses more credible given their experience evaluating property in the area, and found that the city’s assessments complied with state law and the assessment manual. He dismissed the case, and Regency West appealed.

On appeal, Regency West argued that the city’s method of appraising the property failed to compare it with similar subsidized housing properties, that the city had use estimated rather than actual expenses in its calculations, and used a rate of return for market-rate apartments rather than those that were subsidized.

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

Regency West, has, among other things, asked the high court to weigh in on whether the city should have compared the property to those in the same subsidized housing program and whether it used the proper ratios and rates in its method of assessing the property.


About Erika Strebel, erika.strebel@wislawjournal.com

Erika Strebel is the law beat reporter for the Wisconsin Law Journal and a law school student at UW-Madison. She can be reached at 414-225-1825.

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