ST. LOUIS (KMOX) -- In an appeal of its property tax valuation, IKEA argued its seven year-old St. Louis location is already obsolete.
The Swedish, flat-packed furniture store's opening in this market in 2015 was eagerly awaited by shoppers, but in its tax appeal an expert hired by IKEA said the building was "functionally obsolete the day the last coat of paint was put on and they opened for business."
IKEA argued the "highest and best use" of the site, at Forest Park Ave and Vandeventer, isn't selling and storing furniture in a big blue and yellow building, but would be to demolish the store and redevelop the land. The suggestion was for office use, since the land is in a technology district.
Appraiser Thomas McReynolds testified the site's location makes it better suited "for a large office building, or several smaller office buildings, in keeping with the other developments in the CORTEX Innovation Center."
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The company wanted its $75 million valuation by the City Assessor reduced to $23 million, which it said was the value of simply the underlying land, minus estimated costs to demolish the retail building.
The Missouri State Tax Commission disagreed with much of the company's argument and adjusted the valuation to $62 million.
IKEA's testimony discounted the store's viability, in part, because tax abatements and incentives were granted for construction. The state commission, however, rejected that, noting, "nearly every major development in the city...over the last few decades has been supported by a subsidy."
In its conclusion, the commission said the claim the store is already "obsolete" is "not supported by substantial and persuasive evidence."
KMOX News sent several questions to IKEA late Tuesday to determine if this was just a move for a lower tax bill or if the St. Louis store is indeed in trouble.
Our questions include: whether the financial performance of the St. Louis store is meeting expectations and if hypotheticals laid out in the tax argument, like tearing down the building, are being seriously considered.
We'll let you know when the company responds.
