Concord reaches $1.6 million settlement on Steeplegate Mall tax bills
The city will refund Steeplegate Mall $1.6 million on four years of disputed property tax bills, resolving a long-standing legal dispute over the value of the mall property.
In 2012, the city assessed the property to be worth $65 million. In a real estate filing with the state early that same year, the mall’s owner claimed its market value was $37 million.
That’s a difference of nearly $30 million. But last month, the two parties settled the mall’s challenges to its assessed property value from 2009 to 2012, City Solicitor Jim Kennedy said, and they set that value at $52 million for 2013.
“It’s a settlement,” Kennedy said. “It’s not necessarily what either party wanted, but it is a settlement.”
The city’s assessment of the mall’s value had dropped every year since 2008. That year, the mall had an assessed value of more than $83 million.
“The mall apparently experienced a greater economic downtown than the majority of income-producing entities in the city,” Kennedy said. “We fully expect the mall to redefine itself and become a strong income-producing mall like other malls in the state.”
Rouse Properties, owner of Steeplegate Mall, declined to comment.
The mall’s value has been too high because the city hasn’t had access to updated details on the money it makes every year, Kennedy said. The settlement requires the mall to send that information – which includes an income statement, rent rolls and details of property sales – to the city as the board of assessors calculates its value.
Those details will make the mall’s property assessment more accurate in the future, Kennedy said.
This settlement is not the first between the city and the mall. In 2012, the city signed a similar agreement to pay back $231,000 on the mall’s 2005, 2006 and 2007 tax bills.
In 2009, the state Supreme Court sided with the city in the mall’s challenge to its 2004 tax bill.
In this most recent case, the city was required to pay the mall $1 million almost immediately. The remaining money is due by the end of June.
“We wrote them a $1 million check,” Kennedy said. “We’ll give them $600,000 by the end of the fiscal year.”
City Manager Tom Aspell said this money would come out of an overlay fund that the city maintains to prepare for tax abatements, outside legal fees and other unexpected expenses.
Since 2009, Aspell said the city has added more than $2.7 million to the balance of that account. With the first $1 million paid on the settlement, the fund balance was $164,000 as of yesterday.
On Monday, the city council will vote on whether to add budget surplus money to that account and bring its balance up to more than $1.1 million. Aspell said the remaining $600,000 owed to the mall would be paid out of that replenished fund.
The board of assessors, whose full list of abatements is at concordnh.gov under Boards and Commissions, has approved other abatements for 2012 – but none as large as this one. For example, the city paid $119,213 to St. Paul’s School, one of the largest returns so far on a 2012 property tax bill.
This large settlement is an “unusual” payback for the city, Kennedy said.
“Usually, it’s not for this many tax years,” he said.
But Kennedy said other Concord businesses have not experienced such a dramatic drop in value as in this case. The mall seems to be “an anomaly,” he said.
“I think our taxpayers can be confident this is an unexpected case,” Kennedy said.
(Megan Doyle can be reached at 369-3321 or email@example.com or on Twitter @megan_e_doyle.)