🔒Judge dismisses Stew Leonard’s Danbury tax appeal

A Connecticut Superior Court judge has dismissed a tax appeal by Stew Leonard's Danbury LLC that sought to reduce the property assessment on its 35.81-acre Federal Road shopping center, ruling the grocery chain failed to prove the city overvalued the property. Judge Matthew J. Budzik issued his decision Sept. 25 in New Britain Superior Court, finding that Stew Leonard's "failed to demonstrate aggrievement" and that its claim for a $3.1 million reduction based on functional obsolescence was "unsupported by the credible trial evidence." The ruling upholds the city's October 2022 assessment valuing the entire property at 99 Federal Road at $24.4 million and the grocery store building at $16.9 million. Stew Leonard's had challenged only the assessment of the grocery store building, not the 35.81 acres of land or two other commercial buildings on the property — a Walgreens pharmacy and Chase bank branch. The judge rejected two key arguments from Stew Leonard's appraiser, Michael Gold of Wilton. Gold had deducted $3.1 million from the building's value, claiming any buyer would need to extensively renovate the 103,000-square-foot store to accommodate a conventional grocery operation. "This is particularly true given the undisputed trial testimony that the grocery store building is larger than most conventional grocery stores," Budzik wrote in his decision, referring to Stew Leonard's argument that the design would require costly changes for any buyer. However, the judge found Gold "provides no analysis as to why the grocery store building could only be sold to another grocery store business," or why large retailers wouldn't find the building suitable without major renovations. The property is located in a popular commercial area with other large retailers nearby, according to court documents. The judge also dismissed Gold's $3.9 million deduction for the land value in his income analysis. "The grocery store building does not exist in a vacuum," Budzik wrote. "Without the land upon which the grocery store building is physically situated and, most importantly, without access to the parking spaces and other land sufficient to facilitate inventory deliveries and customer access and egress, the grocery store building could not and would not exist either physically or as a business." When those deductions were removed, the judge found the property's fair market value would be $24.7 million and the grocery store building alone would be worth $19.3 million — both above the city's contested assessments. The property consists of approximately 50% shopping center and 50% undeveloped wetlands. The grocery store building occupies about 85% of the developed area and includes distinctive features such as a silo, barn-style facade and serpentine aisles. About 52,000 square feet is used for food preparation and warehouse space, serving not only the Danbury location but other Stew Leonard's stores. About 20,000 square feet houses mezzanine space used for administrative offices and employee break rooms. The case was tried May 2 before Budzik. The property is owned by STLJ LLC, a separate entity from Stew Leonard's that is controlled by members of the same family. STLJ leases the grocery store building to Stew Leonard's and leases the other two buildings to Walgreens and Chase. Kim Nolan of the law firm Cramer & Anderson represented the city in the appeal. Dan Casagrande, a partner at the firm who serves as Danbury's corporation counsel, also worked on the case. Stew Leonard's was represented by the Norwalk-based firm Tierney, Zullo, Flaherty & Murphy.