LANESBOROUGH — With the loss of two anchor stores within a six-month span, the value of the Berkshire Mall has declined by more than $5 million, according to the latest assessment by town officials.
The mall's owners, however, say the closure of Best Buy in October and Macy's, which was expected to close its doors this weekend, took a much greater toll — and they plan to push for a steeper reduction in the assessment.
An arm of Strategic Asset Services LLC, a subsidiary of the Texas-based holding company that purchased the mall in 2014, has filed claims with the Massachusetts Appellate Tax Board arguing Lanesborough assessors overvalued the property in 2015 and 2016.
"They haven't put a number on it, but they're saying the mall is worth substantially less than we assessed it at in [2015 and 2016]," Town Administrator Paul Sieloff said. "It's a real challenge."
Attorneys representing the parties as well as the appeals board will meet Monday to begin negotiations, which could last for months, on the matter. The owners did not return calls seeking comment on the action.
The Berkshire Mall's loss in value has been precipitous in recent years, and that decline shifts more of the town's overall tax burden to homeowners. Already Lanesborough's residential tax rate ranks on the high end of the county, at $19.36 per $1,000 of assessed valuation.
"As recently as five or six years ago, [the mall was assessed at] $60 million," Sieloff said. "So you can see how fast it's dropped."
If the mall prevails in its claim, Lanesborough could lose hundreds of thousands in future tax revenue on the property in addition to having to pay a one-time reimbursement of a portion of the mall's 2015 tax bill.
For every million dollars the mall loses in valuation, it costs Lanesborough about $20,000 per year in tax revenue, Sieloff said.
Town assessors had planned to use a value of $31.5 million to calculate the mall's 2016 tax bill before the abatement claim was filed. In 2015, the mall paid taxes on an assessment of $36.8 million.
Sieloff said is not aware of a specific figure the mall ownership has in mind, but he anticipates the request to be for another "$4 million to $5 million" off the 2016 assessment.
He said he has set aside $150,000 in an overlay account in his preliminary budget to cover the potential costs resulting from the negotiations.
While Lanesborough officials acknowledged the potential losses in revenue would inevitably strain the small town's already tight budget, they hoped to maintain good relations, as the mall by far remains the town's top taxpayer.
Sieloff and other town officials seemed to think some financial concessions to the mall would inevitably result from the negotiations.
"They're keeping tight-lipped about what they're looking for," Lanesborough Select Board Chairman John Goerlach said. "Every time they come to us looking for a cut, we have to keep finding ways to make it up and spread around [the costs]. If they could work with us to make the mall more viable, then we'd be open to pursuing any ways we can help them."
The mall includes 715,146 square feet, including 396,353 square feet of anchor tenant space, which houses Sears, and JCPenney. Target also occupies a sizable retail space, which it owns.
The ownership group last fall said it viewed Best Buy's closing as an "opportunity" to add new retail clients to the shopping space, which remains vacant. And they said they had no plans to sell the mall.
The owners also installed a new roof in 2015.
Sieloff also said he still believes the mall isn't going anywhere soon.
Although the cultural shift away from shopping malls toward purchasing online has continued and accelerated in recent years, he said other malls have responded by finding new entities to put inside, like departments of motor vehicles, child care programs and more.
"Roughly 20 percent of the stores are vacant now," he said. "I think they're going to have to be creative to keep filling the stores, but I don't think the mall is going away."
Contact Phil Demers at 413-496-6214.