Maine Mall appeal denied

SOUTH PORTLAND — In a unanimous vote of the five members who sat through all related testimony (more than 15 hours worth), the South Portland Board of Assessment Review on Friday denied an appeal filed by owners of the Maine Mall, who sought a refund of nearly $900,000 in 2009 property taxes.

Chicago-based General Growth Properties, reportedly the second-largest owner of mall property in the United States, contested property assessments on nine of 12 lots it owns on and around the Maine Mall site. 

According to City Assessor Elizabeth Sawyer, South Portland valued those lots at $242.7 million, using a method of assessment for commercial, revenue-producing property, which is based largely on gross revenue realized in each store. The company claims those properties should only be assessed at $181.7 million, a difference of $60 million.

Sawyer says the review board will meet at 7 p.m. on Wednesday, Aug. 17, to issue its final written decision. GGP will have 60 days from that point in which to file an appeal with the state Board of Property Tax Review.

In the meantime, Sawyer said, GGP already has filed an appeal on its 2010 property tax assessment, even though market conditions forced the assessed value down to $211 million.

South Portland paid more than $76,000 in attorney and expert appraiser fees to defend the appeal of 2009 taxes.

At the heart of both appeals is what the GGP’s appraiser, David C. Lenhoff of Rockville, Md., calls an “intangible business enterprise component.” In other words, Lenhoff claims some stores in the mall pay a higher rent, based on higher sales than they might otherwise enjoy, due to the GGP’s management expertise in creating the mix of retailers within the mall complex.

Based on South Portland’s 2009 tax rate ($14.70 per $1,000 of valuation), the city would have been on the hook for $896,465 if GGP had won the appeal.

GGP is reportedly South Portland’s largest taxpayer. In 2009, the company paid $3.7 million in property taxes to the city.

This is the second appeal in as many years by GGP, which emerged from bankruptcy protection in November. In December 2009, the state Board of Property Tax Review denied the company a $1.4 million appeal on 2006 taxes.

Jon Goldberg, a Portland attorney representing GGP, could not be reached for comment.