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Mall owner ends South Portland tax assessment appeals

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Mall owner ends South Portland tax assessment appeals

SOUTH PORTLAND — City Manager Jim Gailey Wednesday said he is looking forward to more development and increased cooperation in the Maine Mall area after mall owners dropped their appeals of property tax assessments.

City officials said General Growth Properties, the Chicago-based development company that has owned the Maine Mall for a decade, will not pursue appeals of a $217 million property value for fiscal year 2010 and a valuation of about $240 million for fiscal year 2011.

If successful, the appeals could have cost the city almost $1 million in tax abatements, the city manager said.

Jonathan Goldberg, a Portland attorney who has represented GGP in a series of legal fights over property tax assessments dating to fiscal year 2006, would not comment on what company officials believe are the values of eight mall-area properties, or on the reasons the appeals are being dropped.

The company had planned to bypass the city Board of Assessment Review and appeal directly to the four-member Maine Board of Property Tax Review.

Gailey expressed relief and optimism.

“I think this is a good step forward. There were a few things kind of put on hold because of appeals hanging over our heads," he said. "There are a lot of good things going on in the mall area and now we hope we can move forward in a collaborative approach.”

The decision to halt appeals comes after the state board on March 21 denied an appeal for the fiscal year 2009 valuation of $242 million because GGP officials failed to provide appraisal documents for the Maine Mall from GGP bankruptcy proceedings.

Company officials had argued for a valuation of about $182 million, which could have required an abatement of about $900,000, city Finance Director Greg L'Heureux said.

L'Heureux shared Gailey's sentiment. "This is just a good thing for the city," he said.

The typical first step in appealing a city valuation is to the municipal Board of Assessment Review. The board rejected GGP appeals of fiscal year 2006 and 2009 valuations.

GGP bought the mall for $265 million in 2003. The company sought Chapter 11 bankruptcy protection in 2009, and emerged from bankruptcy in 2010.

Its 2006 appeal to reduce valuations of mall properties from $260 million to $190 million was rejected by the state board in 2009 and not appealed to Cumberland County Superior Court.

In 2011, Goldberg and David Lenhoff, an appraiser hired by GGP, argued to the city board that the mall valuation was not based on land, but "intangibles," including leases and reputation. The appeal for a $182 million assessment was unanimously rejected.

While tax revenues will not be reduced for the properties, data compiled by Gailey showed GGP's appeals of 2006 and 2009 valuations have cost the city a total of about $144,000, including legal and appraisal fees.

David Harry can be reached at 781-3661 ext. 110 or dharry@theforecaster.net. Follow him on Twitter: @DavidHarry8.