Property valuations might not sound like the most exciting thing to talk about. But attorney Stephen Dexter says “it’s easy to get passionate about” a property valuation case concerning the Danville Kroger. It’s a case that could have ramifications not just for all Boyle County property taxpayers, but for communities around Kentucky and the state budget, too, according to Dexter and other Boyle County officials.

Judge-Executive Harold McKinney told magistrates last week that Kroger taking an appeal of its Danville property assessment to the circuit court level “might be the most worrisome thing on the horizon.”

County Attorney Lynne Dean seconded that. Valuation appeals are happening more and more frequently, though mostly in larger communities, according to a presentation at a recent county attorney’s conference, Dean said.

The topic of Kroger trying to lower the value of its Danville store from $5.5 million to $2.85 million came up when a magistrate asked for an update on the Kroger case during last week’s Boyle County Fiscal Court meeting. The magistrate wanted to know who exactly should be responsible for the legal bill.

Danville attorney Stephen Dexter has been representing PVA Eddie Tamme in a pair of cases concerning his valuation of the store on the south end of the Danville bypass. Kroger is disputing the $5.5 million value on its property; it originally filed to lower the value in May of 2016. The corporation says the property is only worth $2.85 million, and after going to the Boyle County Board of Assessment Appeals and the Kentucky Claims Commission — both which upheld Tamme’s $5.5 million appraisal — Kroger has now filed a petition for the Boyle County Circuit Court to review the KCC’s ruling.

The value of the property determines how much in property taxes Kroger owes. The majority of local property taxes from the store go to the Danville Independent School District. Boyle County Fiscal Court has been footing the legal bill to fight the lower value, and Judge-Executive McKinney has attempted to get the school district to help with the cost.

“We’re going to have to pay for that, but I’ve been in touch with the Danville Schools system about it,” McKinney said during the Nov. 13 meeting. He said the city school system ought to pay part of it because they’re “going to get the lion’s share” of regained property taxes if they are successful.

“I had a nice conversation with the superintendent, and it’s time for me to follow up with her about that,” McKinney said. “She was going to work on some things last week.”

However, during a Nov. 12 working session for the Danville Board of Education, Superintendent Tammy Shelton questioned why the board wasn’t approached about the decision to hire Dexter beforehand. She told board members McKinney had asked her if the school district could help with part of the legal bill, which was about $10,000 for Dexter’s initial work, then another $6,600 after Kroger appealed.

The district’s finance officer, Paul Dean, said the costs will continue to increase since it’s an ongoing case, and wondered if McKinney is asking for assistance from other taxing districts that share a claim in the property taxes. Board member Lori Finke expressed concern that other entities could pursue legal actions in the future without asking the school board, then expect help with legal costs.

Board member Steve Becker said, “It’s really not our battle,” and that the board will “let our attorney talk to him.”

Tuesday, McKinney said, “No, I have not approached any others, because (Danville Schools) gets such a lion’s share of the amount.”

As far as why the school board wasn’t approached before obtaining an attorney in the matter, McKinney said, “The tax bills come out of the courthouse here. When this happened, we of course took the lead and got an attorney, and we worked forward. We work with the PVA all of the time, and when this came up, we hired Mr. Dexter. And he has represented us very well.”

The legal fees are costly, but McKinney said the big picture should create more cause for alarm.

“My opinion is that it will become more and more frequent. If Kroger wins here, they’ll do it across the state,” he said. “And if they do it, one could reasonably expect all the big box stores will do it, and all across the state.”

PVA Tamme said corporations appealing property valuations is nothing new; however, taking the appeal to the circuit court level is, at least here in Danville. “This is the first time since I’ve been PVA that it’s gone to circuit court,” Tamme said — he’s been PVA since 1989.

During the fiscal court meeting on Nov. 13, McKinney said, “Here’s something else that needs to happen: The revenue cabinet needs to be representing us. Dexter has done a wonderful job, but the revenue cabinet is the ones who’ve got a whole cadre of lawyers over there.”

Pamela Trautner with the Department of Revenue would only say, “Since this is an ongoing appeal, the DOR is unable to discuss this case.” The department was specifically asked about helping counties with legal representation since these sorts of cases are becoming more and more frequent, but returned no comment.

Dean said this has been a discussion in the county attorney’s office “because the demands on county attorneys are so immense. Even in Fayette and Jefferson, where they have huge staffs of attorneys, they can’t keep up,” with similar appeals by companies, she said. “We’re talking hundreds and hundreds of hours of work.”

Deputy Judge-Executive and County Treasurer Mary Conley said, “CVS will be the next one to do it, because they’re doing it in other communities.” She said the public needs to prod state legislators, because “they’ve got to take this up … States are taking action as a whole, as states, saying whether it’s allowable or not. Because they’re the only ones who can solve this problem for our local communities.”

“I don’t know if calling legislators would provide the solution,” Dexter said Tuesday. “Taxpayers have a right to challenge their taxes — a fundamental right. However, a call from community members to Kroger, asking it to essentially be a responsible corporate citizen would be wise.”

Dexter said in the same period of time when Kroger challenged its assessment here in Danville, the corporation also donated millions in Lexington to the University of Kentucky for football expansion. Kroger bought naming rights for UK’s football stadium in a 12-year deal worth about $1.9 million a year.

“The timing of that looks like to people here — that Kroger can invest in Lexington, but doesn’t want to invest in Danville,” Dexter said.

Dexter said one thing that’s not so easily understood in this issue is that school districts have to receive the same amount of tax money they did the prior year.

“In the event you have a tax evaluation that declines, that doesn’t mean the school district gets less money — it gets the same amount from less people. Residential taxpayers make up the difference. So that adds to the seriousness of the case,” Dexter said. “That’s what we’re fighting for — every taxpayer in the county, so they don’t have to supplement (Kroger’s) tax bill. It’s easy to get passionate about it.”

Dexter added, “I think Danville is the test case for Kroger. Should they be successful, they’ll challenge (values on their stores) statewide. The revenue cabinet has skin in the game … Not only a negative impact on the communities where Kroger is located, but the state budget as well.”

No one with Kroger media relations returned a call or email for comment.

Advocate-Messenger Editor Ben Kleppinger contributed to this story.