Despite TIF rebates, Bettendorf Home Depot pursues lower property assessment

For the past six years, the Bettendorf Home Depot has received a $151,000 property tax rebate check from the city thanks to a Tax Increment Financing (TIF) deal that enticed the company to build a store as part of the Duck Creek Plaza redevelopment along Middle Road.

However, the significant tax break – totaling $5.37 million over the 11-year TIF period ending in 2016 – hasn't deterred the hardware store chain from pursuing nearly yearly appeals to state and local tax officials as it seeks to reduce the assessed value of the property, and, consequently the property taxes paid each year to Scott County, the city and the Bettendorf School District.

Two years ago, the company was successful in lowering its taxable value from $6.76 million to $6.167 million, a 9 percent decrease. Store attorneys had asked for a reduction to $6 million, or more than an 11 percent cut, according to Scott County officials. However, in the ensuing negotiations, the county and Home Depot agreed to the $6.167 million assessment.

Attorneys for Home Depot approached the county once again this year to lower its assessment, but that effort apparently has been withdrawn. While county officials aren't sure why the new request was dropped, Bettendorf city officials have been publicly critical about Home Depot's property tax reduction efforts.

The reason for concern – and justification for entering into TIF agreements – is that taxing authorities hope to eventually recoup the initial cost of the rebates through higher property assessments and higher property taxes from the redevelopment. If assessments don't remain high enough, it takes longer for taxing bodies to recover the cost of the rebates. And, if values fall too quickly, taxing authorities might never see a net gain from the development.

During 2012, Home Depot paid $238,384 in property taxes. After subtracting the $150,904 TIF rebate to the company, the city, county and school district received $87,480 in tax support for the period.

The tax reduction strategy of Home Depot comes despite the state legislature's approved plan to roll back commercial property tax rates. Even without a change in assessed values, Home Depot and other commercial property owners are in line to receive a 5 percent reduction in next year's tax bills, followed by a 10 percent reduction in year two, a 15 percent reduction in year three and a 20 percent reduction in year four.

Home Depot isn't the only company in the Duck Creek Plaza redevelopment which has sought to lower its property assessments. Walgreen's has appealed its property tax assessment to the Iowa Property Assessment Appeal Board each of the last three years. It's current $2.2 million assessed valued is scheduled to be reduced to $2.12 million this year but that is the result of a comprehensive re-asssessment by the county of commercial properties.

The Walgreens at Middle and E. Kimberly Road was built as part of a separate TIF approved by the city for redevelopment of Duck Creek Plaza. The Daly Group TIF involves an 11-year rebate of property taxes totaling $10.35 million, or an annual rebate of approximately $291,000 to the developers.

The Daly Group TIF properties include the Walgreens, McDonalds restaurant, Schnucks Food Store, Marshalls clothing store and the strip commercial developments on either side of the main Duck Creek Plaza entrance.