South Portland officials and the city’s largest taxpayer, General Growth Properties, have been disputing the value of the Maine Mall nearly continuously for the past five years.

Next week, both sides will argue their case before the city’s Board of Assessment Review. The hearing is scheduled for 9 a.m. July 22.

The high-stakes dispute centers around the city’s $242 million assessment in April 2009 of the eight properties that make up the Maine Mall. The 2009 tax bill was $3.5 million.

General Growth Properties, the Chicago-based company that bought the mall in 2003, contends the city’s assessment is too high. It hired its own appraiser, who recently submitted a report to the city indicating the 2009 assessment should have been $181 million.

If the Board of Assessment Review accepts that figure, South Portland will have to repay the company about $900,000 plus interest.

Jon Goldberg, the local attorney representing General Growth Properties, said the appraiser hired by the company, David Lennhoff, is “at the very top of his field.”

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“We have a lot of confidence in our appraiser. That is why GGP feels strongly enough to make this appeal,” said Goldberg, of the Portland law firm MittelAsen.

Elizabeth Sawyer, the longtime assessor for South Portland, said she is disappointed that the city faces yet another costly tax challenge from the mall’s owner.

“I’m confident about our assessment,” she said. “We’ve been doing the best we can keeping up with our valuations, and treating the Maine Mall as fairly as possible, along with every other taxpayer in South Portland.”

In 2007, General Growth Properties appealed the $263 million assessment of the mall that was done by the city in April 2006. The company argued that the mall’s taxable value was around $190 million.

The Board of Assessment Review sided with the city’s assessing department. General Growth Properties appealed that decision and the case went to the state Board of Property Tax Review, which ultimately ruled in favor of the city.

South Portland spent $76,000 in legal and consulting fees to defend its 2006 assessment. If it had lost the case, it would have had to pay General Growth Properties about $1.4 million in rebates and interest.

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Sawyer said the city is not trying to be unfair. She noted that the 2010 assessment of the mall dropped to $211 million because of economic factors, including the higher vacancy rate at the mall.

“The value has been adjusted, just like it has been for many properties in South Portland since 2006,” Sawyer said.

General Growth Properties, which owns or manages about 170 shopping malls in 43 states, is the nation’s second-largest mall owner, behind Simon Property Group. It filed for Chapter 11 bankruptcy in 2009 and emerged in November 2010 with a reorganization plan.

Representatives from General Growth Properties have described the Maine Mall as one of its higher-performing assets, and have said the company has no intention of selling the mall, for which it spent $270 million in 2003.

The company does not routinely challenge local assessments of its malls.

Last year, it appealed the valuation of the Shoppes at Buckland Hills in Manchester, Conn. Local officials put the value at $150 million, while the company said it should be $129 million.

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The status of that case is unclear. Officials in Manchester, Conn., and a spokesperson for General Growth Properties did not respond to calls Thursday.

 

Staff Writer Trevor Maxwell can be contacted at 791-6451 or at [email protected]

 


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