May 7, 2009
SC Johnson's Administration Building, Research Tower exempt from property taxes
SC Johnson no longer has to pay property taxes on its Administration Building and Research Tower.
Gov. Jim Doyle signed an executive order declaring the buildings designed by Frank Lloyd Wright historic landmarks on Jan. 10, 2008. That was the first step in getting them a tax exemption.
Doyle's order also exempts SC Johnson's "Project Honor" now under construction on the corporation's Racine campus. (See our previous story on the executive order here.) The exemption will save SC Johnson at least $25,000 a year on its property tax bill, plus it won't have to pay taxes on its Project Honor buildings when they are completed.
The company paid $151,731 in property taxes in 2008 for its Racine campus.
SC Johnson received the exemption shortly after Doyle issued an executive order on Jan. 10, 2008, declaring SC Johnson's Administration Building and the 14-story Research Tower "historic landmarks." Construction of the Administration Building started in 1936 and the Research Tower in 1944; they were designated a National Historic Landmark in 1976.
Project Honor, designed by Lord Norman Foster, will house the replica Carnaúba aircraft that Sam Johnson and his sons, Fisk and Curt flew to Brazil in 1998 to retrace the 1935 flight of H.F. Johnson who was searching for a source of wax. The project's two new buildings -- Fortaleza Hall and the Community Building -- will serve as a tourist and educational center. They total 65,000 square-feet in new construction.
Under a 1997 state law, the executive order makes the historic buildings and Project Honor eligible for a property tax exemption.
SC Johnson used Doyle's executive order to apply for a property tax exemption from the city, according to Ray Anderson, the interim city assessor. "The tax exemption request came through pretty fast," he said -- just three days after Doyle's executive order.
The city collects taxes from the properties, but doesn't assess the value of the Administration Building or Research Tower, Anderson said. Both are considered manufacturing property (although nothing is manufactured there), and such buildings are assessed by the Wisconsin Department of Revenue, "because manufacturing property is unique and they can do it on a uniform basis," Anderson said.
City tax records show the parcel of land that includes the Research Tower and the Administration Building was assessed at $1.615 million in 2008. The land, which is not exempt, was valued at $399,800. Improvements on the land were valued at $1,215,600. The parcel's total tax bill was $35,196.82 plus a $6,354.73 special charge.
To create the exemption, SC Johnson split one of its parcels into two pieces, with one piece including the Administration Building, Research Tower and Project Honor.
Other buildings on the Howe Street property, including the former St. Mary's Hospital, are not exempt from property taxes.
SC Johnson may still have to pay some taxes on its Research Tower, Administration Building and Project Honor, Anderson said. The land the buildings sit on is still taxable, he said.
But how much the land is worth is still to be determined by the Department of Revenue, which has yet to report that amount to the city, Anderson said. The Department of Revenue didn't immediately return our calls for this story.
SC Johnson just missed out on its property tax exemption in 2008. Doyle issued his order Jan. 10, 2008, and the the company applied for the exemption on Jan. 13, 2008 -- barely two weeks after the Jan. 1 date the state uses for "setting" the value of property for tax purposes.