Verona Board of Review upholds assessor valuation for Festival Foods property at 660 Hometown Circle

The Verona Board of Review voted unanimously May 20 to determine that the assessor’s valuation of $13,391,200 for the Festival Foods property at 660 Hometown Circle is correct.

At a hearing on the objection filed by NS Retail Holdings LLC, Alder Tucker Long moved to sustain the assessor’s valuation; Alder Harrison seconded. The motion passed on a roll-call vote with all members present recorded as voting yes.

The decision follows testimony from the property owner’s agent, who presented a sales-comparison analysis arguing the fee-simple (vacant) sales supported a lower value, and from Dean Peters, the Wisconsin-certified assessor, who presented an income-capitalization analysis and property records supporting the current assessment.

The objector’s agent, who identified himself on the record as JC Hayden and represented NS Retail Holdings LLC, said he reconciled five comparable supermarket sales from around Wisconsin and requested a market value of $8,077,087 (about $120 per square foot). Hayden told the board he used a building size of about 67,309 square feet in his packet and applied location and size adjustments to out-of-area sales. He said several of the sales he relied on were vacant at the time of sale and that his analysis isolated real estate value (fee simple) rather than business value.

Assessor Dean Peters told the board his files show the building’s measured gross area is 69,235 square feet on the main level plus a 7,525-square-foot second-floor mezzanine, for a total gross building area of 76,760 square feet. Peters said the land is 7.77 acres and described site improvements including about 47,000 square feet of paving. He noted the property was sold in 2023 in a sale-leaseback transaction for about $17.1 million and said Festival Foods continues to occupy the site under lease.

Peters presented an income approach anchored to market rent and investor behavior for leased, income-producing properties. He used a market rent of $14.75 per square foot, subtracted typical operating expenses, applied an 8% expense allowance and a 7% capitalization rate, and calculated an income-based indicator of value of about $14,434,000. Peters said sale-leaseback transactions are not automatically dispositive for assessment because they reflect negotiated lease terms and investor expectations; he also said sales of vacant or ‘‘dark’’ properties are less comparable to an occupied, leased supermarket.

Board members asked for clarifications about square-footage measurements, the distinction between vacant (fee simple) and leased (lease-fee) sales, CoStar-derived market adjustments, and whether any of Peters’s comparables were sale-leasebacks. Hayden acknowledged he sourced some measurements from Festival Foods’ records and that several of his comparables were vacant at the time of sale; Peters said his retail comparables included leased supermarkets in the region, including a Madison-area Pick 'n Save sale and other Festival Foods sales, and argued those were better indicators for a leased, income-producing asset.

After brief deliberations, Alder Tucker Long moved to find the assessor’s valuation correct under the applicable statute; Alder Harrison seconded. Clerk Lehi Lick called the roll: Alder Helmke, Alder Weiss, Alder Tucker Long, Mayor Diaz, Alder Braithwaite, Alder Swanson, Alder Hoagst, and Alder Harrison were recorded as voting aye. The motion carried.

Votes at a glance

- Motion to approved minutes from the Aug. 8, 2024 Board of Review meeting — approved (voice vote). - Motion to select Mayor Diaz as chair of the Board of Review — approved (voice vote). - Objection by NS Retail Holdings LLC (660 Hometown Circle, tax key 060814294102) — motion to sustain assessor’s valuation: approved by roll-call (unanimous). - Objection by Azura Verona LLC (285 Wildcat Way, tax parcel 060821186602) — withdrawn by the objector before hearing.

Why it matters

The board’s decision affects the taxable assessment for a large commercial parcel in Verona and underscores the different valuation approaches used for leased, income-producing properties (income capitalization) versus vacant fee-simple comparisons. The board relied on the assessor’s argument that investors value a leased supermarket based on expected rental income and capitalization rates, while the objector sought to isolate the real estate component using vacant-sales comparables.

Next steps and context

The board recessed briefly during the meeting and completed mandatory procedural items, including verification of training and open-book notices. The ruling sustains the assessment for 2025; any further appeals would follow statutorily prescribed remedies (noted in meeting materials).