Approve the proposed settlement of the Large Tax Appeal in Lowe’s Home Centers, LLC v. Cochise County, TX2024-000346, now pending in Arizona Tax Court, a division of the Superior Court in and for Maricopa County.

Pursuant to A.R.S. § 38-431.03 (A)(3) and (4), the Board may go into executive session for legal advice with the attorney of the public body and to consider its position and instruct attorneys regarding the public body’s position in pending litigation.

Plaintiff filed a civil action in the Arizona Tax Court seeking a reduction in assessed value for parcel number 106-46-001E and account number R000027429, concerning Lowe’s Home Center (Store #2663), located at 3700 Martin Luther King Jr. Parkway in Sierra Vista, Arizona, for tax year 2025. For tax year 2025, the Assessor originally valued the property at $10,523,145 ($76 per square foot). The taxpayer initially requested a reduced full cash value of $6,254,000, which the Assessor rejected as unreasonable.

Demographic characteristics specific to Sierra Vista - lower population, lower median household income, and lower spending power were also evaluated and supported a valuation toward the lower end of the statewide Lowe’s stores.

After the County rejected the initial offer, Plaintiff retained an expert appraiser, who prepared an appraisal report in support of a low valuation. The Plaintiff’s expert valued the property at $40 per square foot, based on income and sales analyses ranging from $39.37 to $41.03 per square foot, compared to the Assessor’s original $76 per square foot valuation.

Following continued discussions, review of Plaintiff’s appraisal materials, and additional analysis by the Assessor, the parties reached a negotiated settlement. Parties agreed to settle at a value of $48 per square foot. As a result, the Assessor proposed settlement, and the parties ultimately agreed that the parcel’s full cash value and limited property value for tax year 2025 should be lowered as follows:
• For tax year 2025, a reduction in full cash value from $10,523,145 to $6,700,000.
• For tax year 2025, the limited property value of $10,523,145 shall be calculated in accordance to A.R.S. § 42-13301.
• The assessment ratio shall remain at 16%.
• The legal class shall remain class 1.12 (commercial).

Assessor shall recalculate the 2025 taxes and correct the 2025 tax roll to reflect the agreed upon full cash value and the statutorily determined limited property value for the subject property as stated above.
The 2025 tax roll must be updated as required under A.R.S. § 42-16215.
The stipulated value is the result of settlement for tax year 2025 and will roll forward into tax year 2026 as required by A.R.S. § 42-16002, unless an exception applies.
Each party would bear their own attorneys’ fees, expert expenses and costs.
The taxpayer has accepted the settlement offer. Fiscal Impact & Funding Sources:
No funding sources are required. Fiscal impact is limited to a reduction in the taxable base and potential refund of excess taxes paid, plus statutory interest.

Upon approval by the Board, the parties will file the Stipulated Judgment with the Arizona Tax Court disposing of this matter, pursuant to the settlement terms.

Additional expenses, including accruing expert costs for litigation for the County with the risk that the Court may: (1) rule in the Plaintiff’s favor; (2) order a larger reduction in the assessed value of the subject property; and (3) order the County to pay the Plaintiff’s fees, expert expenses and costs.

Advise County Attorney's Office - Civil Division upon Board's approval so the Stipulated Judgment may be finalized and filed.