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Value of the mall draws a wary look
Millburn group questioning tax dispute settlement
Sunday, February 26, 2006
BY KATIE WANG
Star-Ledger Staff
The Mall at Short Hills, with its glamorous stores and air of exclusivity, has for years been a jewel in Millburn Township.
These days it's feeling more like a thorn to some taxpayers.
Until last year, the township and mall have been locked in a four-year legal showdown about the mall's tax assessment. The two sides finalized a settlement in December, agreeing on an assessment of $445 million. But months later, residents said they read in a trade publication that the mall, which is the largest taxpayer in town, was actually valued at $900 million.
A grassroots group called WeLoveMillburn.com is alarmed by the discrepancy and is demanding to know why the township agreed to settle its dispute. The township plans to address the tax questions at a meeting Tuesday.
"Why did they feel like they had to settle?" asked Mike Becker, the chairman of the group. "We want to know why they settled so we can understand the difference (in values)."
Mark Parish, a spokesman for the Taubman Co., which owns the mall, said he thinks the figure is over-inflated and that a mortgage appraisal is different from a property tax appraisal.
"The problem is that there is an apple and oranges comparison between the two numbers," said Parish.
The tax dispute dates back to 2001 when the mall's owners challenged its reassessment, which jumped from $136 million to $496 million that year. The mall eventually sued and the parties went to trial in tax court last year.
The trial ended, though, with a settlement between the two sides, agreeing to the assessment of $445 million. The township also agreed to reimburse the mall's owners $2.9 million since it had been paying taxes using the disputed $496 million assessment.
It is uncertain how the settlement will affect the rest of the township's taxpayers.
In 2005, the mall's tax bill was $10 million.
Then came the news that Taubman had applied for a $540 million mortgage and that the lender listed the mall's value at $900 million.
Millburn Mayor Dan Baer said he was not pleased when he saw that figure.
"We're doing our due diligence to find out what that means in terms of what is the true value of the mall," Baer said. "This could have a significant effect on the assessment of the whole town because the mall pays 10 percent of our whole tax bill."
Because the mall's value is now in question, Baer said town leaders decided to postpone a townwide reassessment.
But Parish said Taubman stands behind the $445 million assessment, saying property tax values do not take into account factors such as money the mall spends on holiday displays, art sculptures, security equipment and other trappings that increase its value.
"I think the $900 million is an incorrect number," Parish said. "I think that $900 million is simply a guesstimate."
Parish said Taubman is willing to meet with township leaders again to explain the discrepancy in numbers and to avoid more legal action.
"It would be our hope and expectation that we would work out an acceptable assessment that would prevent a need for further litigation," Parish said.
Katie Wang covers Millburn. She may be reached at kwang@starledger.com or (973) 392-1504.
© 2006 The Star Ledger
© 2006 NJ.com All Rights Reserved.
Value of the mall draws a wary look
Millburn group questioning tax dispute settlement
Sunday, February 26, 2006
BY KATIE WANG
Star-Ledger Staff
The Mall at Short Hills, with its glamorous stores and air of exclusivity, has for years been a jewel in Millburn Township.
These days it's feeling more like a thorn to some taxpayers.
Until last year, the township and mall have been locked in a four-year legal showdown about the mall's tax assessment. The two sides finalized a settlement in December, agreeing on an assessment of $445 million. But months later, residents said they read in a trade publication that the mall, which is the largest taxpayer in town, was actually valued at $900 million.
A grassroots group called WeLoveMillburn.com is alarmed by the discrepancy and is demanding to know why the township agreed to settle its dispute. The township plans to address the tax questions at a meeting Tuesday.
"Why did they feel like they had to settle?" asked Mike Becker, the chairman of the group. "We want to know why they settled so we can understand the difference (in values)."
Mark Parish, a spokesman for the Taubman Co., which owns the mall, said he thinks the figure is over-inflated and that a mortgage appraisal is different from a property tax appraisal.
"The problem is that there is an apple and oranges comparison between the two numbers," said Parish.
The tax dispute dates back to 2001 when the mall's owners challenged its reassessment, which jumped from $136 million to $496 million that year. The mall eventually sued and the parties went to trial in tax court last year.
The trial ended, though, with a settlement between the two sides, agreeing to the assessment of $445 million. The township also agreed to reimburse the mall's owners $2.9 million since it had been paying taxes using the disputed $496 million assessment.
It is uncertain how the settlement will affect the rest of the township's taxpayers.
In 2005, the mall's tax bill was $10 million.
Then came the news that Taubman had applied for a $540 million mortgage and that the lender listed the mall's value at $900 million.
Millburn Mayor Dan Baer said he was not pleased when he saw that figure.
"We're doing our due diligence to find out what that means in terms of what is the true value of the mall," Baer said. "This could have a significant effect on the assessment of the whole town because the mall pays 10 percent of our whole tax bill."
Because the mall's value is now in question, Baer said town leaders decided to postpone a townwide reassessment.
But Parish said Taubman stands behind the $445 million assessment, saying property tax values do not take into account factors such as money the mall spends on holiday displays, art sculptures, security equipment and other trappings that increase its value.
"I think the $900 million is an incorrect number," Parish said. "I think that $900 million is simply a guesstimate."
Parish said Taubman is willing to meet with township leaders again to explain the discrepancy in numbers and to avoid more legal action.
"It would be our hope and expectation that we would work out an acceptable assessment that would prevent a need for further litigation," Parish said.
Katie Wang covers Millburn. She may be reached at kwang@starledger.com or (973) 392-1504.
© 2006 The Star Ledger
© 2006 NJ.com All Rights Reserved.
posted by Jones Lang LaSalle NJ News Blog at 10:00 AM
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