Best Buy campus value cut in half: What it means for Richfield property taxes in 2027

RICHFIELD, Minn. (FOX 9) - Richfield is bracing for a major shift in its commercial tax base after a big assessment change for Best Buy’s corporate campus.

Richfield faces budget challenges as commercial property value drops

What we know:

The Hennepin County Assessor notified the city that Best Buy requested a lower assessment for its headquarters at 7601 Penn Ave. While the reduction was denied for 2026, the county agreed to cut the value from about $63 million in 2026 to $32 million in 2027.

The reduction is based on comparable property values and the county’s estimates for the land and buildings.

Best Buy remains the owner of the property and has not shared plans to move.

The reduction means a 5% drop in Richfield’s commercial tax base.

Property taxes that fund city services are spread across residential, apartment, commercial and industrial properties. When one category’s value drops, others pick up a larger share.

This change will add complexity to the city’s 2027 budget planning as officials also contend with inflation and a tight labor market.

Why you should care:

City leaders stress that this does not automatically mean higher property taxes for every homeowner.

"While this is disappointing news, we know that the commercial real estate market has been struggling," said City Manager Katie Rodriguez. "Recovery since COVID has been slow and large employers across the country have been working to adapt. We also know markets are cyclical and that it will evolve over time."

The city council will approve a preliminary budget and tax levy in September, with final approval scheduled for December.

What they're saying:

City officials say the Best Buy campus project reflected common economic development practices when it was built. "Twenty-seven years ago, this was the type of project cities were excited about," acknowledged Melissa Poehlman, Community Development Director. "For the people making the decisions, it made sense to support a project that would bring a Fortune 500 company and thousands of high-paying jobs to the community."

"Many factors influence what a specific property owner pays, including tax levies from the city, county and school district along with changes to individual property values. Like always, we will continue to take affordability into consideration as we plan our budgets for next year," said Rodriguez.

Richfield