The Bangor Mall took another hit Thursday as the city assessor denied the mall owner’s request for a tax break for last fiscal year.
“I have denied their appeal [for the abatement],” Bangor City Assessor Phil Drew said. “They will have 60 days to appeal my decision to the Board of Assessment Review.”
Drew denied 10 appeals for tax breaks on the 10 properties comprising the mall, owned by Simon Property of Indianapolis. Simon asked the Bangor assessor’s office on Jan. 8 for a tax break of close to $32 million for the fiscal year from July 11, 2017, through June 30, 2018, citing economic factors that affected the mall’s value.
Drew gave two reasons for the denials in his letter dated Thursday.
First, Simon failed to provide copies of appraisal reports he requested and to which the company apparently has access, he said.
Second, while the company’s income for the year ending Dec. 31, 2016 was down from prior years, it still was high enough to justify paying last year’s assessed value, Drew said. He redacted Simon’s income in the copy of the letter emailed to the Bangor Daily News. He also said Simon failed to demonstrate that the 10 properties are overvalued compared to similar properties in the Bangor Mall area or across the city.
If the company’s income for 2017 shows a “further, material decrease, or other properties [in the area] have had their assessments decreased, then your properties might well be entitled to reduced assessments for the April 1, 2018 assessment date,” Drew wrote.
Drew said the taxes for 2018 still have not been determined and will be decided around July 1.
The mall is up to date paying its taxes, according to Janelle Emerson, deputy tax collector in Bangor.
The Bangor Mall area makes up almost half of the 6.4 million square feet of retail space in Greater Bangor, according to data compiled by Epstein Commercial Real Estate brokers.
The city valued the mall at $60.9 million as of April 1, 2017.
Simon in mid-March asked the assessor for more time to provide additional information to support its claim that the mall was worth less. Drew gave it until March 28.
“The Bangor Mall has suffered greatly over the past few years from a number of economic hardships ranging from sales declines and increased occupancy costs to a rash of vacancies, including a key anchor department store, Macy’s, and, as recently announced, Sears, which will shutter their store in early 2018,” Simon’s tax manager, Aaron Carter, wrote in the initial abatement request.
Carter said those factors have dropped the mall’s appraised value. Simon defaulted on a $10 million loan against the mall last October. LNR, a company that handles troubled loans, had the mall appraised at $28.9 million last fall. That’s 77 percent less than the $128 million valuation in 2007, when Simon took out the $80 million loan, using the mall as collateral.
LNR still appears to be moving the mall toward foreclosure. It originally said it would complete the foreclosure on March 7. But in a monthly update published by real estate data company Trepp of New York, LNR deleted the foreclosure date and extended the time it plans to complete its transactions with the Bangor Mall until May 31. It is not clear whether that also is an estimated foreclosure date.
So far, no foreclosure paperwork has been filed with the Penobscot County Registry of Deeds, according to its online filings. No foreclosure documents have been filed with the Bangor District Court or Penobscot County Superior Court, said assistant clerk Meghan Maker.
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