IOWA CITY – The owner of Coral Ridge Mall is suing a Johnson County board over a nearly 53 percent increase in the mall’s assessed value.
Coral Ridge Mall LLC filed a lawsuit last week in Johnson County District Court against the county’s Board of Review. In May, that board affirmed the Johnson County assessor’s decision to value the two main parcels of the property owned by the mall at a combined $125 million, up from $81.9 million. (View the lawsuit below.)
The new valuation would increase the Coralville mall’s taxes on those parcels from a little more than $3 million last year to about $5 million annually, county Assessor Bill Greazel said.
Greazel said the $125 million assessment was based on a couple of factors.
First, in a 2011 annual report filed with the U.S. Securities and Exchange Commission, the mall’s Chicago-based operator, General Growth Properties Inc., placed Coral Ridge Mall’s value at $154.9 million. (Pg. 152 on this link. It may take a minute to load.)
Also, in April General Growth bought the Sears space in the mall, paying $15 million for a property assessed at $5.7 million.
Greazel said the county’s assessment of the mall was fair, even if it was a large increase.
“If anything it’s conservative, especially if you look at what they valued it at,” he said.
The mall argues differently, saying in the lawsuit that the actual value of the property is $80 million and claiming the assessor and the Board of Review “gave inadequate consideration to what would be the fair and reasonable exchange between a willing buyer and a willing seller.”
Heather Campbell, the mall’s West Des Moines attorney, declined to comment for this story.
In its petition to the Board of Review, the mall said the assessment occurred in a year in which there normally wouldn’t be one. It also said the mall’s value had dropped because of a decline in retail market conditions and increased competition from a “new shopping center subsidized by governmental authorities.”
It’s unclear if that last point was a reference to the city of Coralville paying for Von Maur to build a department store in the city-owned Iowa River Landing area. That funding, about $14 million, is coming primarily through a tax increment financing district that includes Coral Ridge Mall.
Also, because the mall is in a TIF district, the city of Coralville collects all of taxes paid by Coral Ridge Mall until 2018.
The mall also sued over its assessment in 2005. A settlement was eventually agreed to that established the $81.9 million value that stood until this year.
Greazel said that deal included a four-year agreement to leave the assessment unchanged, which is why the county did not revalue the property until now.
Noting the $2 million difference in taxes, he isn’t surprised the mall took the matter to court.
“It’s almost mandatory you do that because if you get it knocked down just 10 percent in court, that’s $200,000,” he said.
General Growth filed for Chapter 11 bankruptcy protection in 2009 and emerged from that the following year, although Coral Ridge Mall was not included in the bankruptcy.