April 15, 2022 – The Board of Review for the City of Kenosha properly determined that a nine-acre parcel of raw, unimproved land was correctly assessed as residential, the Wisconsin Supreme Court has ruled.

In State of Wisconsin ex rel Nudo Holdings, LLC v. Board of Review for the City of Kenosha, 2022 WI 17, (April 12, 2022) the supreme court held that the board’s determination was proper because the board concluded that the land was not primarily used for agriculture.

The decision came on a 4-3 vote. Justice Brian Hagedorn wrote the majority opinion. Joining him in the opinion were Justice Ann Walsh Bradley, Justice Rebecca Dallet, and Justice Jill Karofsky.

Justice Patience Roggensack dissented, joined by Chief Justice Annette Ziegler and Justice Rebecca Grassl Bradley.

Walnut and Pine Trees

Nudo Holdings, LLC, owned by Anthony Nudo, purchased 8.9 acres of raw land located inside the Kenosha city limits on Sept. 11, 2017. When Nudo bought the parcel, it was zoned A-2 agricultural.

The land had no access to sewer or water service and included no habitable structures. It was covered mostly with underbrush and scattered walnut and pine trees.

However, the parcel was included in the city’s St. Peter’s Neighborhood Plan.

Between the time that Nudo bought the land and Jan. 1, 2018, he did some tilling on the land.

Nudo cut trails through the underbrush to reach the walnut trees and pine trees, which he called “Christmas trees.” Nudo and his wife used the trails to harvest walnuts.

Nudo registered the parcel as a livestock premises and obtained licenses to cut timber and keep chickens on the parcel. But as of Jan. 1, 2018, he hadn’t cut any timber nor kept chickens or livestock on the parcel.

Appeal and Reconsideration

In 2018, the city classified the parcel as a residential and assessed its value at $89,800. 

Nudo appealed the assessment to the city’s board of review, arguing that the parcel should be classified as agricultural, which would have led to a lower assessment.

The assessor testified that he’d assessed the parcel as residential because it was a raw land, with no evidence of livestock being allowed and no sign of furrows or other evidence of harvesting.

The board sustained the assessment. Nudo appealed to the Kenosha County Circuit Court; the court ordered the board to reconsider its decision in light of State ex rel Peter Ogden Fam. Tr. v. Bd. of Rev., 2019 WI 23, 385 Wis. 2d 676, 923 N.W.2d. 837.

In that case, the supreme court held that Wisconsin law does not require a business purpose for land to be classified as agricultural land.

The board again sustained the assessment. Nudo appealed again, and both the circuit court and the Wisconsin Court of Appeals affirmed the board’s determination.

Only Some Agricultural Use

Writing for the majority, Justice Hagedorn explained that under Wis. Stat. section 70.32(2)(c)1d., whether Nudo’s parcel was properly classified as agricultural land depended on whether the land was “devoted primarily to agricultural use.”

Justice Hagedorn pointed out that a Department of Revenue regulation includes walnut farming and the harvesting of Christmas trees within the definition of “agricultural use.”

But some agricultural use on a parcel doesn’t mean that the parcel is “devoted primarily to agricultural use,” Hagedorn explained.

“Just because the sole productive activities, however small, could be described as agricultural does not mean the land’s main use was agricultural,” Justice Hagedorn wrote.

‘Basis of Use’

Nudo also argued that the board of review violated the directive in section 70.32(2)(a) that property be classified “on the basis of use,” because the parcel wasn’t being used for housing.

Justice Hagedorn explained that Nudo’s interpretation of section of 70.32(2)(a) missed the mark.

Under section 70.32(2)(c)3., “residential” property “includes any part of a parcel of

untilled land that is not suitable for the production of row crops, on which a dwelling or other form of human abode is located,” Hagedorn wrote.

Hagedorn acknowledged that there was no dwelling on Nudo’s parcel. But, he wrote, the subsection’s use of the word “includes” means that “Wis. Stat. section 70.32(2)(c)3. contemplates that land other than the type described in section 70.32(2)(c)3. could still be classified as residential.”

“Residential ‘use’ is not, under any statutory language, limited to property with habitable homes currently or imminently on the property,” Justice Hagedorn wrote.

Furthermore, Justice Hagedorn explained, guidelines which state law requires assessors to follow allow planned residential development to serve as a basis for a residential classification.

“Accordingly, when the law says property must be classified ‘on the basis of use’ on January 1 of the assessment year, land has a current residential ‘use’ not only if human dwellings are present, but also if they are reasonably likely or planned.”

Unsuited for Crops?

In her dissent, Justice Roggensack explained that no testimony before the board of review established that Nudo’s parcel was unsuited to the production of row crops.

Roggensack also pointed out that there was no sewer or water access to the parcel – two things necessary for it to be suitable for home construction.

Guidelines Conflict With Statute

Justice Roggensack explained that the assessor guidelines cited by the majority conflict with section 70.32(2)(a), which requires a parcel to be classified on the basis of use existing on January 1 of the year of assessment.

“While I of course agree that [the guidelines document] says what it says, when [the guidelines document] conflicts with a statute, the statute controls,” Justice Roggensack wrote.

Roggensack also criticized the majority for its reliance on the word “includes” in section 70.32(2)(c)3..

That reliance, Roggensack wrote, “negates the statutory requirement for a structure that could be used as a human abode” and “ignores the statutory requirement that residentially classified land is ‘not suitable for the production of row crops.’”