Tax fight between McKee, Augusta County heads to court

STAUNTON - Three years after McKee Foods Corp. filed court papers disputing its property tax assessments, the Tennessee-based company and Augusta County are set to settle their differences in court with a three-day civil trial scheduled to begin Tuesday.

McKee, which has a plant in Stuarts Draft and makes Little Debbie Snacks, claims Augusta County owes the company $260,678.

McKee filed the grievance in 2014 after its Stuarts Draft facility was assessed at $31.7 million, court records show, meaning the company owed $171,776 in property taxes.

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McKee argues the 2014 assessment exceeds the property's true market value and "relied on a computerized mass appraisal model" without adjusting for depreciation. The assessment should have been closer to $15.1 million, the company claims, decreasing its tax total by nearly $85,000.

McKee said the county's initial 2014 tax assessment should be ruled invalid and that its "cost approach methodology" is flawed.

Following its initial filing, McKee amended its claim and added the tax years of 2011, 2012 and 2013, and claimed it was owed an additional abatement of $175,707, court records show. McKee also wants to apply the county's delinquent rate of 10 percent on money the company alleges it's owed.

McKee's Stuarts Draft plant, finished in 1991, is listed at 828,619 square feet and sits on 71 acres.

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In 2014, Hershey Chocolate of Virginia settled with the county in a similar case, resulting in Augusta County giving back $404,897 in collected tax payments and another $197,000 in interest. It then filed another tax grievance that same year, and the case is set for a three-day trial in February, court records show.

In its court filings, Hershey said the lower values reflected a decade-long decline in the worth of large manufacturing plants in the United States. McKee made a similar point in its filing.

In 2015, arguments were heard in a case where the former owners of the Staunton Mall also disputed the county's tax assessment after the mall's property value was placed at just less than $20 million. A judge ruled in favor of Augusta County.

The civil trial will be held at the Augusta County Courthouse.

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