SOUTH PORTLAND — The owners of the Maine Mall received some good news and some bad news this week.

While the U.S. Bankruptcy Court in New York accepted General Growth Properties’ plan for the reorganization of $10.25 billion in debt, the Maine Board of Property Tax Review on Tuesday denied the company’s appeal of its South Portland property taxes.

The Maine Mall and its outlying properties were among the Chicago-based company’s holdings included in the debt reorganization approved Tuesday.

GGP, meanwhile, has 60 days to appeal the tax ruling to Cumberland County Superior Court. Attorney Jonathan Goldberg, GGP’s local representative, said it’s too early to say whether that will happen.

“I haven’t had a chance to speak with my client,” Goldberg said. “I don’t have any information now about what the next step is, if any. It may end here, but there is a right to appeal. I have no idea at this point whether GGP is interested in making the appeal.”

The review board reached its 4-0 decision after hearing three days of testimony in October and brief oral arguments from Goldberg and the city’s attorney, William Dale. The board deliberated for more than three hours before ruling.

At issue was 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 argued they are only worth $190 million. GGP was seeking the return of nearly $920,000 in taxes paid, plus interest.

The city defended the assessment by showing that GGP bought the Maine Mall and its outlying properties in 2003 for $270 million. But GGP’s appraiser, David Lennhoff, argued that the city assessment included non-real estate value of the business. 

City Assessor Elizabeth Sawyer said the review board was not sold on the GGP appraiser’s argument. The board was swayed, Sawyer said, by the actual 2003 purchase price.

“One board member said that was the elephant in the room,” she said.

Although the company lost, GGP may have gotten off easy in South Portland. In Minnesota, not only was the city’s assessment upheld, but GGP was ordered to pay $1.8 million in additional taxes, according to the Star Tribune.

For Sawyer, the win is as much of a personal victory as it was a professional one.

“I can’t even tell you what a relief this was,” she said. “As of Friday I will be going on vacation, and I’d rather go with this result than any other.”

City Finance Director Greg L’Heureux said the city has spent more than $69,000 defending its property tax assessment, with about $20,000 incurred in the last few months. In addition to attorney fees, the city hired outside consultants.

The city has yet to receive a bill for Tuesday’s hearings, L’Heureux said.

Randy Billings can be reached at 781-3661 ext. 100 or [email protected]

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