By Nate Jones

Staff Writer 

Maine Mall owners General Growth Properties, or GGP, – a Chicago-based company that owns shopping plazas across the U.S. – denies it needs to pay $9,500 in interest charges to the city of South Portland. The company has already paid more than $3.3 million in taxes this year, South Portland Assessor Elizabeth Sawyer said.

“The payment of our property tax bill was delayed because of our bankruptcy filing,” GGP spokesperson Jim Graham wrote in an email. “Because of the circumstances under which the payment was delayed, we have been advised that we need not pay interest.”

According to court documents, GGP 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. Creditors include AT&T, Central Maine Power Co. and Wachovia Bank, but the amount that GGP owes its creditors is still unknown. Calls to Alan Halperin, the New York attorney representing the Official Committee of Unsecured Creditors of General Growth Properties, Inc., were not returned by the Sentry deadline.

South Portland Finance Director Greg L’Heureux said it is not uncommon for businesses that file for bankruptcy to be exempt from interest charges accrued by late property tax payments, but GGP did not receive the exemption. He said GGP has until the end of next month to provide the $9,500 payment. 

“They’ve paid everything except the interest that has accumulated,” L’Heureux said of GGP’s property tax bill. “They have requested that the interest has not accrued because of their filing [chapter 11] but that’s not what the court documents indicate.”

The city is being more flexible when it comes to next year’s tax bill. Sawyer said the tax valuation of GGP-owned properties – including the Maine Mall – have been decreased by 1 percent as part of a citywide reassessment triggered by declining property values. Sawyer estimated the Maine Mall’s property valuation decrease to be approximately $10 million, resulting in a $38,000 decrease in GGP’s property tax bill next year.

“Property values are down, it’s no surprise,” Graham said of the decrease in valuation.

Graham said the reassessment will not affect the status of a pending appeal to the Maine Board of Property Tax Review regarding the Maine Mall’s 2006 tax assessment. General Growth Properties believes the Maine Mall’s $260 million valuation was $60 million too much, a difference of $1 million in taxes already paid to the city.  Sawyer said the funds would be repaid to GGP if a court rules in its favor.

Two years ago, the South Portland Board of Assessment Review ruled in favor of the city and determined the Maine Mall property was not overvalued. An appeal for the 2007 decision was scheduled in April, but was canceled because a member of the Maine Board of Property Tax Review was ill. Sawyer said she received a letter from the Maine Board of Property Tax Review last month indicating the case could be scheduled for September.

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