The Fourth District Court of Appeals on Thursday affirmed a Dane County Circuit Court judge's decision that the city's assessment of Veritas Village LLC, 110 N. Livingston St., was not excessive, as was argued by developer Terrence Wall, whose company, T. Wall Enterprises, built the project.
Veritas Village, a four-story, 189-unit luxury apartment building with fitness room, courtyard, swimming pool and other amenities near Breese Stevens Field was completed in 2017, and the city initially valued the property at $17.8 million during its lease-up period in 2018.
But Veritas challenged the assessment with its consultant, Landretti and Co. of Middleton, calculating a value of $8.5 million based on the building's vacancy rate as it filled up.
"Veritas argues that the City was required to use the actual 72% vacancy rate that existed on January 1, 2018, rather than a vacancy rate that took into account leases that were anticipated to occur after that date," according to the decision. "We disagree and therefore affirm the circuit court order."
The appeals court affirmed a previous ruling by Judge Mario White, who said the city's assessment conforms with the Wisconsin Property Assessment Manual (WPAM), case law and state statutes, and that the city's appraisal and conclusions are "more reliable, credible, and persuasive" than the plaintiff's. Veritas appealed the decision.
City Assessor Michelle Drea said in an email the city was "extremely pleased with the recent decision."
"This decision and other court rulings upholding municipalities’ assessments of commercial properties are important to municipalities because reducing the tax base within the commercial sector of property ultimately shifts a greater share of the property tax burden to the homeowners in Madison," Drea continued. "The City believes the decision was well reasoned and written and is pleased that the decision is recommended for publication to be used as future precedent."
In a separate lawsuit filed by Veritas over the city's 2019 assessment of the property, Dane County Circuit Court Judge David Conway ruled the city underassessed other high-value, multi-family commercial apartments, but not Veritas Village's building at 110 N. Livingston St.
That violated the state's "uniformity" clause, which requires the properties to be assessed equally, the judge ruled.
Conway ordered the city to reduce the assessment to 79.2% of its fair market value and issue a refund of roughly $146,500 in 2019 taxes plus interest.
The city has appealed the ruling.
