ELLSWORTH — After two lengthy hearings, members of the city Board of Appeals voted unanimously on Sept. 28 to lower the 2019-2020 assessed value of the largest Maine Coast Mall building by roughly $2.5 million, to $12.5 million, but rejected other tax appeals by the mall’s owners on nearby properties.
Valuing the mall building at $9.5 million, said Board of Appeals Member Stephen Salsbury, “Puts it at about $55 per square foot, which is comparable with your peers in Ellsworth.” The roughly 173,000-square-foot building had been valued by the city at $11,951,700, or roughly $71 per square foot.
The abatement was less than the owner of the property, Union River Associates Realty Holdings, LLC, had requested. Representatives from the group had argued the property’s value should be cut roughly in half, to $7.3 million — $5.3 million for the building and $2 million for the land.
Board members voted not to decrease the valuation of the land beneath the building, which will remain at $3 million. That 27.38-acre parcel includes the land underneath the mall building, Convenient MD, the U.S. Cellular site, the Taco Bell and KFC building, Aroma Joe’s, Governor’s and the parking lots. (Some of the buildings are assessed separately.)
“The emptiness of that mall is bothersome to me and caused me to wonder if the valuation the city came up with is correct,” said Chairman Jeff Toothaker, when explaining his reasoning on the decision. “It’s not how you would design anything in modern times…It’s not an empty shell, but it does have problems.”
The new valuation will lower the company’s taxes on that parcel for 2019-2020 by roughly $46,000, to $235,125.
Representatives for Union River Associates, which is managed by Dan MacIntyre and registered by attorney Curtis Kimball on behalf of Martha Reynolds and Rebecca MacQuinn, had appealed the April 1, 2019, assessment on six parcels. The board rejected the other appeals, finding that the taxpayer had not met the burden of proof to show the assessments were “manifestly wrong.”
The properties that were under appeal last Monday evening are all found on Tax Map 128: Lot 4 (the land and building of the new Dairy Queen), Lot 7 (the main, 173,000-square-foot structure housing T.J. Maxx and Hannaford), Lot 7-ON-0 (the former First National Bank, now Convenient MD), Lot 7-ON-1 (Taco Bell/KFC), Lot 7-ON-2 (Aroma Joe’s) and Lot 7-ON-3 (Governor’s Restaurant & Bakery).
Taken together, the parcels were valued at a total of $18,221,400 in 2019-2020. Mall officials asked that that valuation be lowered by $7.52 million, to $10,700,500. The abatement granted on Sept. 28 lowered the value of all six to $15.77 million.
Mall representatives argued that the main mall building is outdated: too large and deep, with a shared hallway that tenants don’t want to pay to heat and cool. Board members were sympathetic to that argument, looking at what other malls have sold for in recent years.
Toothaker pointed out that the Bangor mall, which is in a more populated area and far larger, sold last year for a fraction of what it was valued at in 2007.
“You don’t see the centers built today the way they were built back in the pre-80s,” said Bill McLaughlin, who conducted an appraisal on behalf of Union River Associates. “That’s when bigger was better. Multistory department stores were the new thing. That’s out of vogue right now and that type of space is not really leasable.”
McLaughlin told the board that investors “Don’t pay anything more than $30 per square foot” for similar properties nationwide.
Mall spokesman MacIntyre said that most tenants want, at most, 1,500 square feet. It would be very difficult to divide the space in the mall as it’s configured now, he said, because of where columns and systems (electrical and sprinkler) are situated. “You could be spending anywhere from $50,000 upwards to $100,000 to create a space,” he said.
But city staff and representatives had argued in a meeting in late August that McLaughlin was using methods to appraise the property that aren’t typically used by city assessors for tax purposes. Such methods, they said, could result in valuations that reward owners who make poor business decisions and don’t take care of their properties, lowering the value and, subsequently, the taxes.
“The thing the assessor has to do in any town is make sure there’s no bias, no special preference, towards anyone, so the same appraisal method is applied to everyone fairly,” said City Assessor Larry Gardner in August. “That’s what I have to do; that’s what I’ve done here.”
This isn’t necessarily the end of the line: both parties can appeal to the state if they don’t agree with the board’s decision, although neither indicated last week if they would do so.