Assessment appeals won't stop Pittsburgh Mills property owners from paying for their TIF
Pittsburgh Mills mall and surrounding property owners could have to come up with $5.4 million to cover debt payments and other related costs if assessment appeals are granted for some of the properties in the coming months.
Frazer Solicitor Tim Bish said the property owners are responsible for making an annual debt payment toward the $50 million Tax Increment Financing plan, known commonly as a TIF, which was used to pay for improvements to Route 28, the mall’s highway interchange and other infrastructure when the mall was built.
Properties in the TIF include the Pittsburgh Mills mall, which includes only the enclosed mall and parking lots; the strip shopping centers and freestanding big box stores collectively called The Village at Pittsburgh Mills; Sam’s Club; and Walmart.
The money for that payment comes from property tax revenue.
But if the assessment appeals are granted, tax revenue refunds will have to be given to the property owners and revenue is reduced.
That could leave a worst-case scenario hole of up to $5.4 million to be filled for the TIF payments. That number could vary depending on which appeals, if any, are granted.
Several assessment appeals will be discussed Monday during a status conference by an Allegheny County Court board of viewers. Lawyers representing Frazer, the Deer Lakes School District and the property owners will be at the status conference.
These appeals will be discussed:
- The Pittsburgh Mills mall owners are seeking to reduce the assessed value from $148 million to $17 million.
- Macy’s, which owns its own property despite being part of the enclosed mall, is seeking to reduce the assessed value from $9.2 million to $3.4 million.
- CSMC retail strip center, which includes Bob’s Sub restaurant and Sweet Frog frozen yogurt, is seeking a reduction of its $1.1 million assessment.
- Rohrich Automotive Group, which owns several vacant properties behind the mall, was granted a reduction from $4.5 million to $2 million. The township is appealing that decision.
Bish said that if the tax revenue won’t cover the required TIF payments, then the property owners will be charged with a special assessment to cover it. The special assessments are something the property owners agreed to when the TIF was taken out to ensure they would never miss a payment.
Special assessments are different for each property and are based on factors such as the property’s size and leaseable value.
Properties in the TIF paid a combined $6.4 million in taxes this year. Bish said that number would drop by a whopping 59 percent — to $2.6 million — if all of the assessment appeals would be granted.
Frazer and Allegheny County retain 25 percent of the property taxes and the school district gets 20 percent. The rest goes to paying the TIF.
Bish said he doesn’t expect a decision to be made on any of the appeals on Monday. If no decision is made by the time special assessments have to be made in January, then the numbers would likely be similar to 2018, he said.
There were about $825,000 in special assessments charged in 2018.
Bish said the 20-year TIF still has about five years of payments left. The last payment will be made in the 2023 tax year.
The payment, which varies year-to-year, is expected to be around $5.7 million in 2019.
“The township believes there’ll be a light at the end of the tunnel,” he said. “Unfortunately, we’ve got a perfect storm here with assessment appeals and other issues with just the state of retail in the nation.”
Bish said any changes likely wouldn’t be noticed by the average taxpayer in the immediate future.
The mall, which opened in 2005, has struggled to draw in shoppers and retain tenants for years.
Long Island-based Mason Asset Management purchased the struggling Frazer mall in May for about $12 million.
The sale came about a year and a half after Morgan Stanley Capital took possession of the property during a foreclosure auction.
A message left for Elliot Nassim, president of Mason Asset Management, was not returned.
Emily Balser is a Tribune-Review staff writer. You can contact Emily at 724-226-4680, email@example.com or via Twitter @emilybalser.