Oil companies fighting city on property taxes lose in court

Two oil companies have failed for a second time to persuade a court to order the City of Milwaukee to refund $3.1 million the firms have paid in property taxes.

Losing a decision handed down this week by the District 1 Court of Appeals were Marathon Petroleum Co. LP and U.S. Venture Inc. Both companies own oil terminals at the Granville tank farm on the city’s far northwest side that were the subject of a long-running assessment dispute.

The tank farm, along N. 107th St. near W. County Line Road, is served by an underground pipeline and is the only hub for distributing gasoline and diesel into the Milwaukee market, according to the decision.

Marathon and U.S. Venture own two of the five terminals at the complex. The companies sued the city, eventually arguing that it had overvalued the terminals every year from 2008 through 2014.

Marathon sought a refund of $1.7 million plus interest, arguing that its property was worth about half the value the city set. U.S. Venture sought a refund of $1.4 million plus interest. The firm said its terminal was worth about 38% less than the city’s assessment.

In April 2016, Milwaukee County Circuit Judge Christopher Foley ruled against the companies and upheld the city’s assessments.

On appeal, the companies argued that the city’s valuations of the terminals wrongly included intangible, business-related elements that were not part of the real estate itself.

But, like Foley, the appellate court disagreed.

It said the income-generating capacity of the oil terminals was part of the property and was “inextricably intertwined” with the land, and could be transferred to future buyers.

The oil companies failed to present significant evidence to overcome the presumption under Wisconsin law that municipal assessments are correct, the appeals court said.