Assessors and their minions frequently take the position that an occupied store is more valuable than an unoccupied store, a conclusion commonly referred to as the “dark store theory.” Owners of big-box retail properties and their tax advisers bristle at this erroneous contention because real property taxes are just that — a tax on the value of the real estate. It is the assessor’s function to value the property’s real estate components, which consist primarily of land, bricks and mortar. In the case of most big boxes, the real estate components include land, concrete, pop-up concrete or metal slabs. It is a common but mistaken practice of assessors to place a greater taxable value on a big box occupied by a major retailer than on a vacant building of equal design, construction and utility. This errant valuation methodology has given rise to controversy played out through expert testimony and sophisticated argument before administrative agencies and the courts. It is in this context that the term “dark store theory” has come into play. A call to action Owners of big-box real estate need to deliver a consistent response in the face of this increasingly pervasive and costly misconception. And because informal meetings …
