NORMAL — McLean County Unit 5 and other local taxing bodies could lose about $600,000 in revenue if the company that sold the former Mitsubishi Motors North America plant to Rivian Automotive succeeds in its property tax bill challenge.
Maynards Industries, a Michigan industrial asset auction, appraisal and liquidation company, has appealed the 2016 assessment and resulting property tax bill on the Normal plant — first to McLean County's Board of Review, which ruled against Maynards last year, and to the state's Property Tax Appeal Board (PTAB) in January.
Local officials are assembling evidence to give to the board through mid-April before a potential hearing, and taxing bodies are officially signing on for the legal process, which the Normal City Council will consider doing on Monday.
The heart of the dispute, said McLean County Supervisor of Assessments Bob Kahman, is whether the plant should be valued based on its final assessment under Mitsubishi in 2015, or what Maynards paid for the property in 2016.
"Our stance on it is, if Mitsubishi felt in 2015 they had $16 million in the same properties, it’s hard to believe they're only worth $2.5 million now. ... No one sale establishes value,” said Kahman. “The idea (that) even just the land is worth $2.5 million is ludicrous.”
The plant sold to Rivian for $2 million in January 2017, according to county records, but the Michigan-based electric car startup later told The Pantagraph it paid a total of $16 million for the plant and its contents.
"If PTAB were to award the full reduction, then the town, including (Normal Public Library), would lose a total of $98,085 in the tax collected for 2016," according to a memo from Normal Corporation Counsel Brian Day.
In total, taxing bodies could lose about $600,000 from the appeal. Unit 5 gets 58 percent of property taxes from the properties; Normal, 11 percent; McLean County, 11 percent; Heartland Community College, 8 percent; and five bodies split the other 12 percent, including the library's 5 percent.
"The taxing bodies would share the legal fees. Initial discussions suggest that the town's portion of the fees would be $10,000 or less," Day wrote.
The town recently approved two settlements of similar disputes, over students apartments near Illinois State University and managed by First Site Apartments and Young America Realty. Those deals are expected to bring taxing bodies about $2.4 million over several years.
Representatives of Unit 5 and the town have defended the agreements because they secure additional revenue over the properties' previous assessments and end expensive litigation, but critics say they benefit rich, litigious landlords at the expense of other taxpayers.
The Normal City Council will meet at 7 p.m. Monday on the fourth floor at Uptown Station.