Staff Writer 

Filing for bankruptcy may grant Maine Mall owner General Growth Properties, Inc., more time to pay off its debts, but South Portland Assessor Elizabeth Sawyer said the corporate entity is still expected to pay more than $3.3 million in property taxes this year.

“The next payment is due in May,” Sawyer said, estimating the remaining balance to be more than $930,000. “Filing for bankruptcy has no effect on the taxes that are owed.”

What would affect the city’s tax rate is a reassessment of the property’s overall value, something Sawyer said could happen given the financial climate of the entire city.

“All sectors of the market have really suffered,” she said. “It is entirely possible to make a generalized reduction [in property tax valuation] but we haven’t made that determination yet.”

Taking another look at South Portland’s property values is something City Councilor Jim Soule said he has supported for more than a year. Lowering the city’s total estimated property value could make the South Portland school system eligible for more state and federal aid, he said.

“Things have changed regionally as well as nationally with real estate assessment,” Soule said. “I don’t think it would be a stretch to say [property values have] fallen 10 percent of what the city has them at.”

Although Chicago-based General Growth Properties is expected to pay its tax bill this year, Sawyer said the company is still disputing the city’s 2006 assessment of the Maine Mall property. She said the company believes the $260 million valuation was $60 million too much. 

 “If they were over-assessed the city would have to pay the taxes back just for that tax year,” she said. “There is between $900,000 and $1 million in taxes at stake.” 

Two years ago, the South Portland Board of Assessment Review ruled in favor of the city, determining the Maine Mall property was not over-valued. An appeal to the 2007 decision was scheduled earlier this month, but was canceled since a member of the Maine Board of Property Tax Review was ill, Sawyer said.

“We had experts coming in from all over the country, and I’m sure they did too,” she said. “Now I hear we’re looking at September.”

According to court documents, General Growth Properties filed under Chapter 11 of the U.S. Bankruptcy Code with the U.S. Bankruptcy Court of Southern District of New York on April 16. The company’s attorney, Marcia Goldstein, did not return phone calls by the Sentry deadline, however, according to documents, “the filing of the bankruptcy case automatically stays certain collection and other actions against the debtor and debtor’s property” in most cases.

“Under certain circumstances, the stay may be limited to 30 days or not exist at all,” U.S. Bankruptcy Court Clerk Vito Genna wrote.

General Growth Properties may be seeking financial relief, but South Portland Planning and Development Director Tex Hauser said its five-acre site at 415 Maine Mall Road – the currently vacant space that formerly housed a Pizza Hut and a movie theater – is poised for development after being taken off the planning board’s agenda twice in November. He said plans for two restaurants and four retail tenants were approved in December. 

“We intend to move forward subject to planning,” General Growth Properties Senior Director of Public Affairs Jim Graham said in November. “Obviously the timing is subject to market conditions. We are hearing some retailers saying it’s not time, but we would love to see that process move forward.”

Exactly how much debt General Growth Properties has is still being determined; creditors include AT&T, Central Maine Power Company and Wachovia Bank. Steven Cope, the attorney representing Central Maine Power, said the amount owed to each creditor will not be known for several weeks.

“It’s significant, I would expect,” he said. “[General Growth Properties has] a lot of things going on, we’re just one of them.”

Staff Writer Nate Jones may be contacted at 282-4337 ext. 233.