Land valuations creating ‘extreme inequity’ between Tea, Harrisburg, commissioner says

CANTON — The Lincoln County Board of Equalization overrode the land valuation of a Tea grocery store this week, citing “extreme inequity” in the assessed value of a similar property 7 miles away in neighboring Harrisburg.

The dispute focuses on the assessment of Hy-Vee’s Dollar Fresh at 725 E. First St. in Tea. After three visits during and after construction, the county’s Department of Equalization valued the 27,200-square-foot building and surrounding 206,605 square feet of land at just over $2.6 million.

In an appeal of the valuation, Gabe Noller, a Kansas tax consultant appointed to the appeal by Hy-Vee, pointed to Hy-Vee’s Dollar Fresh location at 201 E. Willow St. in Harrisburg, which was valued at just over $2.4 million.

During an appeal hearing on Tuesday, April 25, Noller told the Board of Equalization that the land on which the Tea store sits was valued at three dollars per square foot compared to Harrisburg’s value of $1.38 — a figure roughly 117% higher.

“They’re identical properties, the other property [in Harrisburg] has 30,000 square feet, this one [in Tea] has 27,000,” Noller said, “and this one is valued roughly $15 per square foot higher than that one.”

Lincoln County Director of Equalization Karla Goossen told the board — which is made up of county commissioners — that the difference is a result of the Tea store’s location and lot size.

"The lot is different in size, our Dollar Fresh in Tea is 206,000 square foot, and the one in Harrisburg is 155,615 square feet, so it is priced differently,” Goossen said, “but that's the land. Everybody’s land is in different areas, it depends on the location — Tea versus Harrisburg versus corner lot versus side lot versus Main Street — we take all of that into consideration.”

In Hy-Vee’s formal appeal, it notes that the grocery stores in Tea and Harrisburg are nearly identical, both located in similar suburbs of Sioux Falls.

Goossen told the board that the difference is a result of a review in the summer of 2022, completed as part of the county’s reappraisal process across various taxing jurisdictions. She noted that reviews in Harrisburg had not yet been completed.

Commissioner Joel Arends, hankering on the difference in the assessed value per square foot of land between the towns, said he doesn’t understand why the land in Tea would be worth more. Commissioner Michael Poppens — who was acting as chair of the board in the absence of Commissioner Tiffani Landeen — said the difference is creating inequity between the neighboring towns.

“This causes inequity between communities, which is not on my radar of things that I like,” Poppens said. “... I’m disappointed right now. I’m going to say this creates extreme inequity from one community to another, from business to business.”

Following discussion, Arends motioned to reduce the Tea grocery store’s property valuation to $1.38 — equal to that of the Harrisburg location.

With Landeen and Commissioner James Jibben not in attendance, the 3-0 vote reduced the assessed land value by just shy of $335,000, finalizing the land and structure’s new combined value at $2,289,856.