Property owner Wayne Hartman, who leases the land to the Dollar General, came before Berlin’s elected officials looking for answers as to why the town appealed a recent reduction by the state in the commercial property assessment.

By Tara Fischer

Staff Writer

Much to the consternation of the property owner, the Town of Berlin recently appealed a property tax assessment to Dollar General that yielded over a 20% reduction in property value.

If the decreased assessment is upheld, the municipality would see a property tax revenue loss of around $4,000.

Wayne Hartman, who owns the property currently leased to Dollar General on Decatur Street, came before Berlin’s Mayor and Council on Monday, May 12. Hartman said that he received a letter from the Maryland State Department of Assessments and Taxation that informed him the municipality had appealed a reduction in property valuation of his commercial site. Hartman is also a delegate representing District 38C in Maryland.

The value appealed by the town came in at around $1.8 million, or a drop of approximately $491,000 from the original $2.5 million assessment.

On Monday night during citizen comments, Hartman informed the Berlin council, which was unaware the town had filed an appeal, that prior to the municipality’s involvement, he had issued a reconsideration for a tax bill on his Dollar General property. After a “two-year, hard-fought battle” and with help from Realtors, his petition was granted, and the store’s property value was reduced.

“Back when I bought the property three years ago, interest rates were very low,” Hartman said. “So, the cap (capitalization) rate was very low, and it was fixed based on the rent. So, if you do the math, the value of the property was very high. I paid nearly $2.5 million for the property. Since then, we have had a dramatic increase in interest rates, and now the cap rates are much higher, so rent being the same … the value of the store is much lower … I had valuations from different Realtors, and the valuation that the state came back with lowered my assessment to $1.8 million.”

As the assessment reduction was more than 20% of its original value, courtesy by the state is to send a letter to the Town of Berlin. Upon receipt of the state’s notice, the municipality filed an appeal of the property value decrease. Hartman argued against this move at the meeting and had previously reached out to Councilman Jay Knerr about his concerns.

“I think it’s a very bad look for the town to be fighting these [reductions],” Knerr said. “…We could have gone to [Hartman] and said, ‘Hey, what’s going on here?’ I think that would have been a fair approach.”

Other staff and council members argued that Dollar General’s property value reduction would result in the town losing funds necessary to provide residents with goods and services.

“My standpoint on the appeal is reduction of assessed value, which is lost revenue for the Town of Berlin,” said Natalie Saleh, the town’s finance director. “As the finance director, I would advocate to appeal because we’re losing the revenue that provides services to the citizens and residents of the Town of Berlin.”

Other than Knerr, the Berlin council was unaware of the town-filed appeal against the reduction of Hartman’s Dollar General property. Still, Councilwoman Shaneka Nichols agreed with Saleh, noting that a decrease in accumulated property taxes does not serve the town.

“It’s a loss of revenue for the town,” she added. “… I’m not saying that any constituent or any property owner in this town … I’m not saying that any of them shouldn’t have the right to appeal, but at the same time, if it comes to the town and it looks like you could possibly lose revenue that’s coming into the town, we have that same right as well.”

The conversation was heated, and it was unclear who within the Town of Berlin directed the appeal to be made.

Saleh said she sent an appeal letter to the State of Maryland at the direction of Berlin Mayor Zack Tyndall and administration for more information as to why the reduction took place.

“The page we received stated that this particular property had filed a reduction in assessed value,” the finance director said. “As the Town of Berlin and Mayor and Council, you have the right to appeal the decision … so me receiving instructions from the mayor and the town administrator to proceed with the process, we have filed an appeal to basically appeal the reduced value of the 20% of the commercial property.”

Hartman responded, arguing that if Saleh filed the appeal at the direction of Tyndall, it “changes a lot of the conversation.”

However, Tyndall maintained that he stayed out of the appeal process.

“The direction is that staff were asked to handle this at the staff level,” the mayor said. “I did not play the part in drafting the letter, I did not play a part…[Hartman], you’re trying to find something that doesn’t exist … The reason I was staying out of that was because I don’t think this process should be political.”

Hartman continued to express his dissatisfaction with the town’s appeal, whoever ordered it.

“[Tyndall], you told me you had nothing to do with it,” Hartman responded. “Natalie just said that she was directed by you. That’s a big difference. As an elected person, you’re directing somebody to work against somebody investing in the town.”

The property owner said that supporting a small business like Dollar General is necessary to maintain a community that supports all its residents. According to Hartman, many Berlin citizens use the shop for their household and grocery needs because they don’t have transportation to larger stores like Food Lion or Walmart.

If the reduced property value is overturned, Hartman worries that the costly property taxes may discourage Dollar General from renewing its lease and thus ending its services to the Berlin community.

Hartman added that as the landlord in a triple net lease arrangement, he is not responsible for the tax bill but wants to do his best to retain fairness and the shop’s benefit to residents.

“With stores like that, my concern is that their margins are getting smaller,” Hartman said. “… If that store goes dark, where do those constituents go? Those constituents that you represent are the ones who are going to be impacted by a decision like this. If we’re not going to be fair, if it’s about a need for money, so desperately, for the town, then I’m glad we had this conversation.”

Nichols resisted the idea that Berlin’s Dollar General is at risk of shutting down. According to the councilmember, the brand is re-strategizing to markets, offering customers a more well-rounded shopping experience with additional merchandise.

“Maybe Dollar General is different from what I see, but what I’ve heard and read and seen with my own eyes is that they’re not closing, they’re rebranding and opening Dollar General Markets now,” Nichols said. “I don’t see this one closing because of this right here.”

Hartman hoped the councilwoman was right, but if the appeal led to the reinstatement of a higher property value and thus raised the taxes, Berlin’s shop would be at risk.

“We can’t look at businesses as an ATM,” he said.

Berlin staff maintained that this was the first assessment reduction over 20% in recent memory. As such, no current policy or precedent requires staff to always appeal the new estimate. Even so, Hartman reiterated that the move to appeal in this case does a disservice to Dollar General shoppers.

“I just want what’s fair,” Hartman concluded.