NORMAL — Mitsubishi Motors North America and McLean County taxing bodies have come to terms for the taxable value for the automaker's Normal manufacturing facilities.
Mitsubishi will accept an equalized assessed value of $5.9 million for its plant at 100 Mitsubishi Parkway and $1.1 million for its warehouse at 2601 W. College Ave., according to stipulations filed with the county on Wednesday.
A final agreement is pending. It will specify those values are valid for two years and three years, respectively, said Dry Grove Township Supervisor Jim Phillips.
The values fall between the properties' current EAVs — $7.5 million and $1.8 million, respectively — and Mitsubishi's requests of $5.3 million and $833,000, based on an appraisal.
Taxing bodies could lose about $195,000 per year. Some of that loss is likely to be passed on to taxpayers through higher tax rates.
The company asked to lower the EAV of its Normal facilities effective Jan. 1, 2015, because of the plant's upcoming closure. Vehicle production ceased in November, and the facility will shut down in May.
Normal-based McLean County Unit 5 schools, Heartland Community College, Dry Grove Township and the township's road district intervened in the reassessment.
The county's Board of Review held a hearing on the subject Dec. 15, and a decision was expected to be released within three weeks of that date.
“We had to weigh the cost of an agreement against the cost of getting our own appraisal; … litigating through the (state-level) Property Tax Appeal Board and possibly the courts; and the risk that we would not have ended up with a better result than what we agreed to,” said Curt Richardson, director of human resources and attorney for Normal-based schools.
Unit 5 stood to lose about $150,000 per year if Mitsubishi's appraisal proposal was accepted. That amount stands to be reduced to $115,000 in the agreement, using the district's 2014 tax rate.
Heartland could lose $11,000, or $4,000 less. Other taxing bodies affected include the town of Normal and McLean County. Normal stands to lose $64,000, or $21,000 less, and McLean County $64,000, or $20,000 less.
Officials with those three agencies said the losses are unfortunate but won't significantly affect their bottom lines.
For Dry Grove Township, “it’ll be a 10-year process before this is completely resolved,” said Phillips. The township could dip into reserves or raise its tax rate to offset a $10,000 annual loss.
“We would have lost approximately $30,000 a year (total for both taxing bodies)," he said. "Unit 5 looks at it as three teachers or four teachers, and I’m looking at it as losing my entire workforce."
By the time the warehouse's agreement expires at the end of 2017, Mitsubishi will be finished paying property taxes on it through a lease, Phillips said. The property is owned by HSA Commercial Inc., a Chicago-based real estate company, according to property records.
Phillips said he hopes Mitsubishi can sell the plant before that property's agreement expires at the end of this year. A task force of state and local officials has been looking for a buyer since the closure was announced in July.
“If it remains vacant," Phillips said, "we’ll be back at the table again."
Mitsubishi declined to comment on this report.