A state board that reviews appeals in commercial property tax assessments has reduced the estimated taxable value of an Ellsworth shopping mall by $6 million.
The decision comes after Union River Associates Realty Holdings, which owns Maine Coast Mall on the city’s main commercial stretch, appealed its 2019 tax bill.
Larry Gardner, the city’s tax assessor, had valued the overall mall property, including several buildings that line High Street in front of the mall, at $18.2 million. But after hearing arguments in the case, the State Board of Property Tax Review has reduced the mall’s taxable value to $12 million.
The board issued a final written decision on the abatement on Feb. 28.
With the revised assessment, the mall is expected to get a refund of $113,469 on its 2019 taxes.
That decision is not expected to be the final word in the tax dispute, Gardner said Thursday. The mall’s 2020 and 2021 tax bills are being reviewed by the state board, and the mall owners have asked the city to reconsider its 2022 tax bill.
The city’s assessment for the property this year is $16.7 million, resulting in an anticipated tax bill — unless another abatement is granted — of nearly $263,000.
The state’s decision on the mall’s 2019 property taxes comes weeks after the city reached a favorable settlement with Walmart in a dispute over how much in property taxes the retail giant should pay for its local supercenter. Walmart has argued its Ellsworth store should be assessed around $10 million, rather than $20 million, but the company agreed to a $19.5 million assessment after the state property tax board ruled in favor of the City of Brewer in a similar tax dispute.
In the Maine Coast Mall tax dispute, the mall’s owners told the state board that Gardner overvalued the mall property’s taxable worth in 2019 by relying too heavily on estimates for the cost of building an equivalent structure today. They said Gardner should have accounted more for the mall’s vacancy rate, which in 2019 was roughly 30 percent; for the age of the mall building, which was originally constructed in 1967; and for its dated design, including the indoor pedestrian concourse on the front and slanted floor of a former movie theater.
The mall first appealed Gardner’s assessment to the city’s assessment review board, which granted an abatement of nearly $2.5 million. Not happy with that reduction, the mall then took its appeal to the state.
The mall property consists of the large mall building that includes Hannaford and T.J. Maxx, as well as properties in front of the mall where Aroma Joe’s, Convenient MD, Dairy Queen, Governor’s restaurant, and Taco Bell & KFC are located. The property where McDonald’s is located, which also is in front of the mall, has a different owner. Gardner has noted that since 2019, national clinic chain Convenient MD has constructed and opened an office in front of the mall, the city’s water department has moved into the mall, and Harbor Freight Tools has begun work on renovating a long-vacant part of the mall where it plans to open a store later this spring.