- Associated Press - Friday, February 12, 2016

DES MOINES, Iowa (AP) - The corporate headquarters for health insurer Wellmark Inc. should have been taxed at a value of $99 million in 2011, the Iowa Supreme Court said Friday in reversing earlier rulings that set the taxable value much lower.

The headquarters in downtown Des Moines cost more than $150 million and was completed in September 2010. The Polk County assessor valued it at $99 million in 2011 and Wellmark filed a protest saying the taxable value should be $72 million. The case ended up in district court with a judge siding mostly with Wellmark in December 2013 and setting the taxable value at $78 million, a decision the Iowa Court of Appeals accepted. The county appealed to the Supreme Court.

“We find it ironic that the taxpayer, having expended more than $150 million on its new corporate headquarters, now urges that the property is worth less than half of that amount for tax purposes,” Justice Brent Appel wrote in the opinion filed Friday on behalf of the court.

The broad difference in taxable value centers on whether it is viewed as a single-tenant corporate headquarters as it is currently used or as an office building that would be occupied by multiple tenants, which would be the most likely use if it were sold.

“We embrace the view that the property should be valued based on its current use,” Appel wrote, acknowledging the imprecise nature of assessing a building’s value, especially one with such dramatic features and amenities.

The five-story, 604,000-square-foot building sits on 6.5 acres on the western edge of the downtown, is designed for 2,000 employees and includes a child development center, wellness facility, convenience store, art gallery and a full-service restaurant.

County tax records show Wellmark paid about $257,000 in property taxes on the site in 2011 and 2012 based on the court’s $78 million valuation. In 2013, the county assessed its value at $99 million and the company’s tax bill rose to $3.7 million; it paid a similar amount in 2014.

The 2015 taxable value was set at $101 million, making the tax bill then and now at about $4.5 million for each year. Court records show the company also has filed court appeals of the 2013 and 2015 valuations. Iowa property is reassessed every two years.

“While we respect the Supreme Court, we are disappointed by today’s ruling and will be evaluating the ruling’s impact to our business,” Wellmark spokeswoman Traci McBee said.

Polk County Attorney John Sarcone, who represented county tax officials, did not immediately respond to a message.

Wellmark is a health insurance company covering more than 2 million people in Iowa and South Dakota.

Copyright © 2018 The Washington Times, LLC.

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