PRESQUE ISLE, Maine — The City of Presque Isle tax assessor has reduced the Aroostook Centre Mall’s valuation by more than $6 million, which will reduce the mall’s tax burden this year by $162,830.
City Assessor Lewis Cousins announced during the May 2 Presque Isle City Council meeting that officials from Torchlight Loan Services, the property management company hired in fall 2017 to improve the mall’s finances, sought last year to reduce the mall’s valuation from $15 million to $7 million.
Cousins denied that request in 2017, but agreed at the time to reassess the mall for 2018. Cousins told councilors Wednesday night that he revalued the mall at $8,649,450 for 2018 based on its income potential and current occupancy. The office will revisit the assessment annually and adjust to current occupancy as of April 1 each year.
The mall, which is Presque Isle’s second largest taxpayer, paid $384,256 in 2017 property taxes based on a $15 million assessment. For 2018, it will pay $221,425.92 on the new assessment of $8.6 million.
“They felt that the prior assessment, which was done in 2012, would have been too high now because in 2012 Sears, Staples and K-Mart were still tenants,” Cousins told councilors. “They requested an assessment of $7 million for 2018.”
Cousins said he was pleased he and Torchlight officials were able to settle on an assessment without legal involvement. The mall is now the third commercial property to see a major devaluation in Presque Isle since 2014. The assessor’s office also reduced valuations on the Presque Isle Inn and Convention Center and Key Bank Building.
The Aroostook Centre Mall has lost tenants and struggled to attract commercial retail stores in recent years, causing a reduction in yearly profits. In a article published in The County last fall Orest Mandzy, managing editor of the yearly publication Commercial Real Estate Direct, reported that the mall saw profits of $820,000 in 2016, a sharp decrease from pre-recession profits of $1.2 million in 2007. Mandzy predicted that the mall’s owners, Wells Fargo, would attempt to reduce the building’s tax liability for those reasons.
After a Halloween auction failed to produce interested bidders for the mall, Wells Fargo acquired the property for $4 million and took over the mortgage held by previous owners, Sitt Asset Management. In 2017, Sitt Asset Management failed to meet payments on a 10-year, $10.3 million loan.
The mall’s new valuation comes only a week after Bangor City Assessor Phil Drew denied the Bangor Mall a $32 million tax break for the fiscal year from July 11, 2017, through June 30, 2018. Like many malls across the country, both the Bangor Mall and Aroostook Centre Mall have faced drastic declines in traditional brick and mortar stores due to increased online shopping and continual out-migration of youth.
Earlier in the May 2 meeting, Aroostook Partnership President Bob Dorsey spoke to councilors about a new report, titled, “Caring for the Crown,” which was prepared by Maine Center for Business and Economic Research President Ryan Wallace that addresses both these issues.
The report predicts a “demographic tsunami” in which Aroostook County will lose over 6,000 people in 10 years and roughly 10,000 of the remaining population will reach retirement age. Population decline is expected to have a $20 million impact on economic development, with further decreases in retail shopping, Dorsey said.
But he cited Harbor Freight Tools — the latest retail store to come to the Aroostook Centre Mall — the growth of the area’s manufacturing industry and educational collaborations between UMPI and UMFK as signs that the region is ready to take on the challenge of attracting skilled, educated workers from other regions of Maine and the country and keeping more of Aroostook’s youth in The County.
“We have a growing job market, low crime rates, friendly people, plenty of outdoor activities, excellent school systems and peace and quiet,” Dorsey said, listing benefits that he believes can attract people to Aroostook County. “We need an army of folks touting our advantages if we want to make progress moving forward.”
Councilors did not take any action after Dorsey’s presentation, but thanked him for giving a fresh perspective on issues that municipalities all over Aroostook County will continue to face in the coming years.
“It’s refreshing to hear someone from outside of Presque Isle talk about the same things that we’ve been discussing over the past 11 months,” Councilor Kevin Freeman said. “I think there is room for collaborations in the future to reduce costs and make all these small communities in Aroostook feel like partners in these endeavors.”
The next Presque Isle City Council meeting is scheduled for 6 p.m. Wednesday, June 6, in the City Hall Council Chambers.
