The Walgreens property, 1921 S. Main Street, in West Bend has been sold for $7 million.
WAG West Bend LLC out of New York purchased the parcel to the south of Paradise Drive from AR Palm LLC, a Florida limited liability company. The purchase, which closed Jan. 26, 2016, included the land and the building.
The property was last assessed at $2.4 million. That’s a far cry from the assessment of $5.52 million in 2012 and $5.7 million in both 2013 and 2014.
In August 2015 the West Bend Common Council adopted a settlement agreement with Walgreens after it complained the assessments were too high for the stores on S. Main and at 1720 W. Washington St.
Walgreens has had similar assessment disputes in Milwaukee and Oshkosh; it won those decisions.
Kevin Crowe recently wrote in the Milwaukee Journal Sentinel about the assessment fight.
The contracts, called triple net leases, result in Walgreen paying more per square foot than other commercial renters because they are essentially financing the construction of stores through the leases. The deals also put the company in the role of challenging property assessments.
The company argues assessors shouldn’t use its above-market leases to calculate the values of its properties. Instead, company attorneys say, assessors should use the wider commercial market rate, which is always substantially lower.
Walgreen has won two significant cases in Wisconsin courts, one in 2008 against Madison at the stateSupreme Court, and another more recently against Oshkosh at the appellate level in December.
“They say, ‘Value us like the Dollar Store,'” said Amy Seibel, an attorney who has represented municipalities in fights with Walgreen. “The courts have bought into that.”
Walgreen isn’t the only company that uses a triple net lease model.
According to records at City Hall in West Bend, AR Palm purchased the property in 2011 for $5.7 million.
Mayor Kraig Sadownikow has flagged local lawmakers about the assessment practice.
