The Amherst town assessor is firing back at Boulevard Mall developer Douglas Jemal’s bid for a lower assessment on the Boulevard Mall, complaining that the case has “little or no merit” and will get bogged down in court for years instead of working cooperatively with the town.
Jemal, through attorney Peter Allen Weinmann, is challenging the valuation of the region’s second-largest shopping mall, which has been closed since March under the governor’s “pause” executive orders.
The mall is currently listed with a fair market value of $32.97 million, and an assessed value for taxes of $30 million. But in documents filed with the town, Weinmann says the fair market value of the mall should be reduced by 77%, to $7.63 million.
He cited Jemal’s purchase of the property a year ago, the loss of business because of the coronavirus pandemic, and the uncertainty surrounding the reopening and consumers’ willingness to shop at a mall.
But Assessor David C. Marrano said that the town disagreed with Weinmann’s arguments, and would fight the claims.
Marrano said he is disappointed in Jemal’s Douglas Development Corp. assessment challenge after the town worked closely with the developer in June 2019 to reduce the value of the mall, which Jemal bought for $24.05 million.
The town then “left the door open” for continued informal discussions in March and April 2020, Marrano said, but “they made no attempt to speak with us.”
“We’re going to go to court. We’ll take it from there,” Marrano said. “None of us want to go to litigation, but in this case, we have decided that we are going to vigorously defend our position.”
The result, he said, will be “a long protracted legal battle.”
“The Town is very committed to the redevelopment of this property, and I do not understand why they went in this direction,” Marrano said. “The overburdened court system does not have the time, nor do the already cash-strapped municipalities have the financial resources to pay the litigation and appraisal costs associated with this process.”
Marrano said that Jemal’s purchase of the mall was not a true “arms-length” transaction – which would represent market value – because it was a foreclosure auction, not a directly negotiated agreement between independent parties. And the seller was LNR Partners, the Miami Beach-based special loan servicer that had foreclosed on the property for investors after mall’s longtime owner, Forest City Properties of Cleveland, had defaulted on its mortgage.
Marrano compared LNR to a bank foreclosing on a property, and unloading it to recover as much of its losses as possible.
“The objective of the seller is to get rid of the asset, not sell it for market value,” Marrano said.
Marrano also said Weinmann was being inconsistent with such claims, after the attorney previously argued with the town several years ago that a similar sale involving the University Plaza in Amherst was not arms-length – when that sale would have increased the taxable value for his client.
Jemal had even agreed with the town, during the earlier discussions a year ago, that the sale was not arms-length, Marrano said.
Even so, Marrano said he and the town’s Board of Assessment Review negotiated with Jemal because they “realized the market value had dropped on the property.”
The mall had been valued at over $50 million four years ago, and even some of the appraisals performed as part of the sale to Jemal showed estimates as high as $40 million, said Marrano, who saw those appraisals. But Amherst officials agreed to lower the assessment by almost $20 million to the current level in recognition of the problems the mall was having with major store closings.
“We’re aware of what’s happened over there,” Marrano said.
Marrano noted that the 2020 tax covers the 12-month period that ended March 1, 2020, and is based on property valuations as of July 1, 2019. That means it predated the closures of the mall, and the full impact of the Covid-19 pandemic on business activity and consumer shopping.
“To come in and use the Covid to lower the assessment has no merit,” Marrano said. “That’s something that’s going to very much in play next year, but not this year.”
Posted by The Buffalo News