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Nordstrom Takes On County of Marin

Columnist: Bill Meagher
March, 2019 Issue
Columnist

Bill Meagher
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Nordstrom, a key tenant at the upscale shopping center The Village at Corte Madera, is taking on the county of Marin once again.

The Seattle retailer, famed for its customer service, is feeling like the county’s service regarding its tax bill is less than accurate. The Marin County Assessment Appeals Board has been listening to the complaints lodged by Nordstrom that the county is gouging it when it comes to its property tax assessment, following its $68 million remodeling. Nordstrom wants $1.5 million shaved from assessed value. Should the county lose the appeal, Nordstrom would see its tax bill drop about $450,000 a year. The county maintains that with improvements that include more retail space, the building is worth almost $47 million. Prior to the remodeling, the valuation was about $21 million.

Nordstrom also has a Nordstrom Rack store located in the Vintage Oaks shopping center in Novato and another rack location at Coddingtown Mall in Santa Rosa. The Corte Madera remodeling took place during a two-year period from 2012 to 2014. The store stayed open during the remodeling, which included changes to the roof as well as adding parking and retail space. The retailer said the cost of the project is deceiving because the work had to be phased so it could continue selling merchandise, and that the total amount of new space dedicated to retail is only a bit more than 17,000- square feet after almost 23,000-square feet of space was demolished to make way for parking, which by the way comes with valet service.

The county has cried foul over that figure, saying the retailer added 40,000-square feet of new space and that Nordstrom made improvements to the space, including heating and air conditioning as well as fire protection and plumbing, all of which added value. The county relies on property tax revenues to fund county government operations and local school districts. Special districts receive revenues as well.

In recent years counties and cities, including those in Marin, complained the state has either taken cash destined for local coffers, or legislated more unfunded mandates that hurts the local’s bottom lines. Retailers and property owners have long found challenging tax values to be an important way to keep costs down. Nordstrom played the tax appeal card in Marin an even dozen times since 1985 with great success, managing to get the tax bill reduced 11 times.

The retail chain has developed a pattern of challenging tax valuations on a national basis. Over the last two years, Nordstrom has challenged valuations in Arizona, Wisconsin, Florida, California and Maryland. Nordstrom Inc. is a publicly owned company and its stock trades on the New York Stock Exchange. It has 363 stores in the U.S. and employs 72,000 people. The highest profile example of efforts to reduce tax bills come from the Trump Organization, the company that operates and owns assets belonging to the first family. The organization regularly sues cities and counties where their golf courses are located to appeal the appraised values. In recent years, according to federal documents filed by Trump, eight of the courses were valued at $50 million or more, but the valuations claimed by Trump that appeared in legal actions were sometimes as low as $2.5 million.

Your Marin moment

The relationship between Sutter Health and Marin General Hospital has always been fraught with politics, distrust and discomfort. This month that relationship moves further into the rear-view mirror as Sutter Health facilities close in Terra Linda and Greenbrae, with Marin General taking them over. Back in 2010, after years of public battling and costly court battles tied to operating agreements and shared revenues, Sutter and the Marin Healthcare District separated in a divorce that made the split between Pam Anderson and Tommy Lee look like a love fest.

Sutter has leased office space at 1350 South Eliseo Drive in Greenbrae as well as 4000 Civic Center Drive in San Rafael. Sutter, which employs almost 400 people in Marin, is relocating its services to Novato, where it has a substantial footprint on Rowland Boulevard near its Novato Community Hospital. The Civic Center space that Marin General is moving into is part of a lease that could run up to 20 years, so the health-care company is making a longer-term commitment, with the space opening to patient care in the second half of 2019.

Marin General is focused on construction and development of MGH 2.0, its 260,0000-square-foot remodel for seismic safety. MGH employs more than 2,000. Kudos to the two companies as the transition of properties has been orderly and professional, a departure from the past dealings that were characterized by open hostility and spectacles that sometimes even made judges cringe.

That said, the food fights always made for great stories.

Bill Meagher is a contributing editor at NorthBay biz magazine and he keeps the wolf from the door as an associate editor at The Deal, a Wall Street-based digital financial news outlet. He can be reached at bmeagher@northbaybiz.com with news tips, legal threats or bags of cash.

 

 

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