JOHNSTOWN - The Common Council on Monday approved a settlement with the Walmart Corp., which ends court litigation, but reduces the assessment on the retailer's giant distribution center in the city from about $36 million last year to $23 million by 2017.
The settlement, brokered Oct. 26, means property tax revenue to the city from the facility will drop dramatically in coming years.
The reduction in assessments through state Supreme Court in Johnstown mainly involved the largest local Walmart parcel, the Walmart Regional Distribution Center on Enterprise Road in the Johnstown Industrial Park.
Following the council meeting at City Hall, City Treasurer Michael Gifford said reductions in assessments will definitely have a sharp effect on the city's property tax revenue in the years ahead.
"It's a loss for the city when the revenue goes down," Gifford said.
The council approved a stipulation of settlement in litigation initiated by Walmart against the city, its Board of Assessment Review and assessor.
Gifford said the main part of the settlement impacting the city involves the Walmart Regional Distribution Center. As part of the settlement, which was ordered by state Supreme Court Justice Richard T. Aulisi, assessment on the center reverts back to 2011 when the assessed value was $35.7 million.
Under the agreement, the assessed value of the Walmart parcel will decrease this way: $30 million for 2012; $24.5 million for 2013; $23.5 million for each year of 2014, 2015 and 2016; and $23 million by 2017.
Five other Walmart parcels in the city were listed as keeping the same assessment through 2017 under the agreement. They ranged in assessed value from $21,202 to $301,896.
The city was represented in the litigation by attorney Daniel G. Vincelette of Albany.
Agent Wayne D. Wisbaum of Buffalo represented the Walmart Corp.'s Property Tax Department.
The original civil lawsuit filed by Walmart July 2011 in state State Supreme Court sought reduction of the distribution property assessment from about $36 million to about $16 million.
In the suit, Walmart contended the 868,000-square-foot Walmart Regional Distribution Center building has over the years been assessed at a higher percentage of value than other entities on the city's assessment roll.