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Former city official claims Paul Soglin encouraged undervaluation of commercial properties

February 27, 2019

A former official with the Madison Assessor’s Office claims in a city ethics complaint that Mayor Paul Soglin is “allowing and encouraging” undervaluation of commercial properties to the benefit of major developers.

Former assistant city assessor for commercial property Laura Doherty, in a four-page complaint filed with the city’s Ethics Board, also accuses the mayor of unfairly seeking to oust her from city employment.

Soglin strongly denied the allegations, contending Doherty is a “disgruntled employee” who used a new, flawed methodology to assess commercial properties in 2017 that led to a very high number of appeals and, through the normal assessment review process, resulted in favorable adjustments to values for property owners.

“Look at the complainant,” Soglin said. “Look at the complainant’s work product.”

Doherty said Soglin was involved in her demotion from the position of assistant city assessor for commercial property and had been trying to find a way to fire her, according to the complaint filed on Dec. 13. She was hired as a property appraiser in August 2014, promoted to assistant city assessor for commercial property in June 2016, and demoted back to property appraiser in April 2018. She was terminated for a policy violation on Dec. 31, 2018, the city Human Resources Department said. She could not be reached for comment.

The Ethics Board is scheduled to conduct an initial hearing on whether to proceed with an investigation at 5 p.m. Thursday in Room 103A of the City-County Building.

According to the complaint, Doherty and then-city assessor Mark Hanson had informed Soglin and Deputy Mayor Enis Ragland multiple times in 2016 and 2017 about inequitable valuation of commercial property and poor assessment practices. The mayor’s office provided some funding to the Assessor’s Office to try to correct the situation, the complaint says.

Hanson could not be reached for comment.

In April 2017, when new assessments were announced, the city imposed big increases in value for hotels and large apartment buildings, which the Assessor’s Office said had been far undervalued. The assessments involved tens of millions of dollars in property value and millions in property taxes, affecting the balance of tax burden between commercial and residential property owners.

The city’s major commercial property developers met with Soglin on May 8, 2017, and sought to get him to return to the earlier commercial property assessment practices that greatly benefited them, Doherty’s complaint says. “These same developers are reported to be major contributors to Mayor Soglin’s campaigns,” it says but does not elaborate.

Soglin said five property owners sought and got a meeting to voice concern about unfair assessments and a new methodology being used for commercial properties, and about issues involving the Madison Metropolitan Sewerage District. He said the fact that someone may have given a campaign contribution didn’t influence whether he would meet with them on a legitimate concern.

The mayor said the meeting included the city engineer, two staff members, Hanson, and MMSD director Michael Mucha, and that he asked staff to review the assessment methodology but did not intervene in the city’s assessment and appeal process.

Eventually, a large number of owners appealed assessments.

Appeals successful

At the time of the appeals, Hanson and Doherty said increases resulted from many factors, including historically undervalued properties, improving markets, limited information in the assessor’s office to keep up with changes and a surge of hotel construction and a new type of luxury apartments that triggered a sharper look at those properties.

That fall, after considering the appeals and new information from property owners, the city cut tens of millions of dollars in value from the properties.

In all, 30 hotels challenged their 2017 assessments and the city’s Board of Assessors followed staff recommendations and reduced assessments for 26 of them. Also, 46 large apartment buildings began the appeal process, with the Board of Assessors reducing values for 24 of them.

Still, after the changes, 24 hotels had valuations above 2016 values — including some with triple digit percentage increases — and six smaller hotels had values lower than the previous year.

The mayor’s “policy of influencing commercial property values by removing the assistant city assessor/commercial supervisor and thus returning to known poor past commercial valuation practices is not in the public’s best interest and violates the state statutes of valuing all real property at full market uniformly so the tax burden is borne equally,” the complaint says.

Hanson retired last June and was succeeded by Michelle Drea, who was out of town and could not be reached.