By Kevin Haas
Rock River Current
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CHERRY VALLEY — Owners of the CherryVale Mall argue its property is worth millions less than assessors say and cite the impact of the coronavirus pandemic and other economic forces.
The fair market value of the mall should be about $36.3 million, CBL Properties, the real estate company that owns the mall, states in a challenge to its property assessment. That’s about $10 million less than its value a year ago and $12.6 million less than the $48.9 million fair market value determined by township assessors earlier this year.
The mall’s argument, obtained through a request for the public records, is another sign of how COVID-19 accelerated changes in the retail landscape.
“The mall sector is mostly anchored by department stores and has high exposure to the apparel industry, both of which have been experiencing unprecedented sales drops during the pandemic and face more risk of retail bankruptcies and store closures,” CBRE Valuation & Advisory Services says in an appraisal filed with the Winnebago County Board of Review on behalf of CBL. “We will likely see more retailers and their landlords struggle to keep up with the changing landscape.”
CBL and the mall did not return phone calls or emails for this story.
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The mall is asking the county’s Board of Review to reduce its taxable property value from $16.3 million to just under $12.1 million. The taxable, or assessed value, is one-third of the fair market value. Reducing it would cut the amount the mall pays in property taxes. It paid nearly $1.7 million to local government agencies on five parcels last year.
There were 750 assessment challenges filed in Winnebago County this year, the lowest number since at least 2005. The complaint filed by CherryVale Mall is the largest reduction sought in the county. It’s more than three times higher than the next largest reduction requested: $1.27 million for Northpoint Clinic in Roscoe.
There were 108 property owners that sought reductions of more than $100,000 in assessed value and eight that seek to have their taxable value cut by $1 million or more.
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The effects of the pandemic aren’t the only factor the mall points to in arguing for the reduction, but it is a key distinction from other challenges. When homeowners challenge their property assessments – typically in hopes of lowering their property tax bill – they often point to sales of other similar houses. Unique properties like CherryVale make it difficult for assessors to determine their value on the open market because there aren’t many mall sales occurring for comparison, said Tom Hodges, the county’s supervisor of assessments.
The former Janesville Mall, the former Machesney Park Mall, Southridge Mall in Greendale, Wisconsin, West Towne Mall in Madison, Wisconsin, and East Towne Mall in Madison, Wisconsin, were used for comparison in CherryVale’s argument.
Appraisers used sales comparisons in arguing the CherryVale Mall was overvalued by assessors. This year was the first time businesses could cite the affect of the pandemic on income as part of their argument. That’s because assessments are made based on the value of property as of Jan. 1, and when last year’s assessments were made on Jan. 1, 2020, the pandemic hadn’t yet took hold.
The 870,600-square-foot mall was about 83% occupied at the time of the appraisal. The mall was built in 1973 and the open-air portion called The District at CherryVale was added in 2007.
“Retail, especially the mall sector, has been going downhill for a few years before COVID-19 due to the competition of e-commerce and changing consumers,” CBRE wrote in its analysis of the property’s value. “This pandemic has again brought new challenges for retailers and their landlords.”
Hearings over the value are expected to be held in early 2022.
$1 million or more
Here are the eight property owners seeking reductions in their assessed value of $1 million or more.
Name, address, reduction requested:
- CherryVale Mall, 7200 Harrison Ave., $4,208,377
- Northpoint Clinic, 5605 E. Rockton Road, Roscoe, $1,278,993
- Schnucks (Hilander Village Station LLC), 4860 Hononegah Road, Roscoe, $1,236,792
- Costco, 5000 Stadium Drive, Loves Park, $1,213,117
- Menards, 1600 W. Lane Road and 1411 W. Lane Road, Machesney Park, $1,154,717
- Burlington Coat Factory (MB Rockford State LLC), 6260 E. State St., Rockford, $1,135,514
- Courtyard by Mariott Rockford (Skyline CM Portfolio LLC), 7676 E. State St., Rockford, $1,089,920
- Quantum Design (DDP Limited), 7550 Quantum Court, Machesney Park, $1,033,160
This article is by Kevin Haas. Email him at firstname.lastname@example.org or follow him on Twitter at @KevinMHaas or Instagram @thekevinhaas.