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SOUTH PORTLAND — The owners of the Maine Mall are appealing their 2009 property tax assessment, seeking the return of nearly $1 million.
The appeal by Chicago-based General Growth Properties, which recently emerged from Chapter 11 bankruptcy protection, comes nearly a year after a state panel denied a similar appeal.
Attorney Jonathan Goldberg, who represents GGP, said the current appeal is based on the continued slide of the retail economy.
“We’re not simply making the argument that the economy is slumping, therefore our taxes should be reduced,” Goldberg said. “The argument is based on the actual situation at the Maine Mall.”
Goldberg said the struggling economy has reduced occupancy rates at the mall and impacted the tenant mix, which the company argues directly affects the value of the property.
Mall Manager Craig Gorris said on Wednesday he could not comment on specific changes at the mall, since the appeal is pending.
GGP contends the city overvalued the mall and 11 mall-area properties by $62.9 million in 2009. It claims it was subsequently over-taxed by nearly $925,000 at the 2009 tax rate of $14.70 per $1,000 of assessed value.
City Assessor Elizabeth Sawyer defended her 2009 assessment, which valued the properties at nearly $252.9 million, as “fair and reasonable.”
Sawyer said the 2009 assessment is substantially lower that the 2006 assessment of more than $268.8 million.
“Reductions occurred citywide on land and buildings in 2009,” Sawyer said via e-mail. “And the Filene’s building value was reduced substantially to reflect the long-term vacancy.”
Goldberg said GGP is confident the current appeal will be more successful than the previous attempt, which took three years to reach a conclusion.
“We feel we have a stronger case,” he said. “And we feel it would be better received and perhaps better understood this time around.”
The Board of Assessment Review met in November to schedule the appeal.
GGP must submit its alternative assessment to the city by Dec. 31. The city will have 60 days to review GGP’s assessment and respond. Then, GGP will have 45 days to prepare a rebuttal.
Three days of hearings are tentatively scheduled to begin on April 26, 2011.
When GGP appealed its 2006 assessment, the board voted unanimously to uphold the city’s assessment.
GGP, which bought the Maine Mall and 11 outlying properties in 2003 for $270 million, appealed the ruling to the Maine Board of Property Tax Review, which deliberated for three hours before voting unanimously in the city’s favor.
Although the city won the ruling and kept nearly $920,000 in disputed tax revenue, the victory came at a cost: Finance Director Greg L’Heureux said the city paid $76,000 in outside attorney and consulting fees.
According to its website, the company’s portfolio includes approximately 200 million square feet of retail space and than 24,000 retail stores, about half of which are in the 50 most populated U.S. markets, with 37 malls in the top U.S. metro areas.
The company voluntarily sought Ch. 11 bankruptcy protection in April 2009 and underwent a restructuring that included spinning off some business.
GGP announced on Nov. 9 it had successfully emerged from Ch. 11 by consensually restructuring about $15 billion of debt, recapitalizing with $6.8 billion in new equity, paying all creditor claims in full and achieving “substantial” recovery for equity holders.
The spin-off company, The Howard Hughes Corp., is now a stand-alone developer and operator of master-planned communities and long-term mixed-use properties.
Randy Billings can be reached at 781-3661 ext. 100 or firstname.lastname@example.org