Oil Tank Lawsuits Could Cost Milwaukee More Than $8 Million

The City of Milwaukee is headed for a courtroom battle with two major oil companies. More than $8 million is on the line, and approximately $1 million will get added to the total for each additional year the lawsuit continues.

The case centers on the city’s assessments of several oil terminals located along N. 107th St. and W. County Line Rd., an area on the city’s far northwest side known as the Granville Terminal Complex. The tank farm is the only hub in the Milwaukee area for gasoline and diesel distribution.

U.S. Venture, Inc. sued the city in 2016 over its 2015 assessment and is now joined as a plaintiff by Citgo. According to a 2022 tax assessment objection report, U.S. Venture (the parent of U.S. Oil) had its properties assessed for $39.7 million in 2021 and believes they are only to be assessed for $11.9 million. Citgo had its property assessed at $13.3 million but believes it should only be valued at $5 million. The companies are seeking a rebate for their claimed overpayment in property taxes.

The city is represented by outside attorney Amy Seibel of Mequon-based Seibel Law Offices. It has also retained Texas-based Watson Millican & Company for its oil industry expertise, Wisconsin-based Landretti & Company for its assessment expertise and New Jersey-based Federal Appraisal for its appraisal and oil industry expertise.

In 2018, the city, with Seibel’s counsel, secured a Wisconsin Court of Appeals decision that affirmed the 2008 through 2014 assessments and the city’s inclusion of income generation as part of the assessment. That suit involved U.S. Venture and Marathon Petroleum Company.

The city, according to a September 2022 report, has already allocated at least $217,000 to the four parties for the current case. The latest request, authorizing an amount up to $150,000, is intended to cover any upcoming needs on the case of the City Attorney’s Office said assistant city attorney Hannah Jahn to the Judiciary & Legislation Committee on Monday.

“I want to be careful not to discuss too much strategy in the public forum. The city does plan on trying the case,” said Jahn. The intent is that a court decision would narrow or eliminate factors that the oil terminal owners could contest in the future.

There is also another reason to fight the claim in court. “Given the huge amount requested we don’t see the potential for settlement,” said Jahn.

U.S. Venture and Citgo aren’t starved for cash to fight the lawsuit. U.S. Venture, headquartered in Appleton, is the ninth-largest private company in Wisconsin. Citgo, headquartered in Houston and majority-owned by the Venezuelan government, reported more than $24 billion in sales in 2021.

The two plaintiffs are represented by Husch Blackwell attorneys Joseph Pickart, Ross A. Anderson, Anthony Anzelmo and Smitha Chintamaneni according to circuit court records.

A status conference is scheduled for Jan. 17 at 10:30 a.m. At approximately the same time the Common Council is likely to be voting on the $150,000 request to continue fighting the case. The committee unanimously recommend approval of the funding request.

Should the city lose the case, it would not only be on the hook to repay the companies but would also need to increase the tax rate for the remaining property owners to maintain the same property tax levy.

The properties at issue at Citgo’s facility at 9235 N. 107th St. and U.S. Venture’s facilities at 9125 N. 107th St. and 9401-9521 N. 107th St.