SOUTH PORTLAND — The state Board of Property Tax Review was scheduled to hear testimony this week in an appeal involving hundreds of thousands of tax dollars that have already been spent by the city.
The 15-member panel, which hears tax appeals on non-residential property with an assessed valuation of $1 million or more, scheduled three days of hearings beginning Wednesday, Oct. 21, to settle a dispute over a 2006 tax bill from the city to General Growth Properties, owner of the Maine Mall.
At issue is the city’s 2006 assessment of the mall and its outlying properties. Those holdings were valued at about $260 million by the city, but an assessment for GGP argues they are only worth $190 million. GGP is seeking the return of nearly $920,000 in taxes paid, plus interest.
GGP, which filed for Chapter 11 bankruptcy protection in April, was hoping to delay the hearing and have the case transferred to U.S. Bankruptcy Court in New York. But the state board decided that the hearing would continue as scheduled, rather than waiting for the bankruptcy court to determine whether to hear the case.
Although GGP’s local attorney could not say why the venue change was being sought, a local bankruptcy expert said that GGP was likely making a “calculated gamble” that a bankruptcy judge would look at the case more objectively than the state review board. He also speculated that GGP was looking to reduce its legal fees by putting all of its appeals in one court.
GGP filed an appeal with the state board last March, after the city’s board of assessment review voted unanimously against granting the company a tax abatement. The board’s decision was reached quickly, since the author of an independent assessment of the mall’s value was not available for questioning.
City Assessor Elizabeth Sawyer believes Maine law is on the city’s side. The fact that GGP purchased the mall and its surrounding properties for $270 million in 2003 supports the 2006 revaluation, and resulted in a 14 percent increase in the mall’s tax bill, she said.
Finance Director Greg L’Heureux said the city has spent more than $30,500 defending its 2006 assessment of GGP’s mall-area holdings. Nearly $18,000 has been spent on outside legal representation and nearly $14,000 has been spent on valuation experts.
Of the more than 200 malls owned by GGP in 44 states, 158 were included in the company’s Chapter 11 filing, including the Maine Mall.
Randy Billings can be reached at 781-3661 ext. 100 or firstname.lastname@example.org