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VOL. 125 | NO. 52 | Wednesday, March 17, 2010

Area Malls See Different Reappraisal Results

By Andy Meek

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Wolfchase Galleria Mall, which features Dillard’s, JC Penney, Sears and Macy’s plus 130 other stores, is at 2760 N. Germantown Parkway.  Photo: Lance Murphey

When The Avenue Carriage Crossing opened in Collierville in 2005, its open-air, lifestyle center concept was touted as a hot new retail trend that would dramatically reshape the traditional mall experience.

The results of the 2009 countywide reappraisal of property tell a different story. Collierville’s mall – the kind where shoppers can drive up to the front door of the store they want – lost almost $15 million of value from 2008 to 2009.

That’s according to figures the Shelby County Assessor of Property’s office made official within the last few days.

Meanwhile, those new figures show three of the traditional, enclosed malls remaining in Shelby County – Wolfchase Galleria, Oak Court and Southland – all either held their value or gained some after the latest reappraisal.

The contrast is particularly stark between Carriage Crossing – a 60-acre collection of mostly high-end shops – and Wolfchase. The latter was built in 1997 and sits on 45 acres at the corner of U.S. 64 and Germantown Parkway.

The owners of Wolfchase, real estate giant Simon Property Group, appealed the mall’s reappraisal value of $154 million, which was an increase over the mall’s 2008 value of about $130 million.

Greg Moody, director of appraisals for the assessor’s office, said he didn’t relish recommending increases during a recession but felt $154 million for Wolfchase was on the “lower side of correct.”

The Shelby County Board of Equalization, which hears taxpayer challenges of their new values, considered Wolfchase’s appeal Monday. The board chose to adopt a 2009 value of $150 million for the mall.

Simon can still appeal Monday’s decision.

That increase means in the midst of a brutal recession, Wolfchase gained almost as much value as its newer rival in Collierville lost.

Carriage Crossing shed about 15 percent of its value from 2008 to 2009. Monday’s vote means Wolfchase gained about 15 percent during that time.

The owners of Carriage Crossing, Southland and Oak Court all reached agreements on compromise 2009 values with the assessor’s staff within the past few days.

The valuation of those malls is significant because they’re among the county’s largest check-writers to the taxman.

Wolfchase is the county’s largest single property taxpayer. It lies in the city of Memphis, so it pays city and county property taxes.

Wolfchase’s combined city-county tax bill in 2009 was $4.46 million.

Memphis attorney Andrew Raines, representing Wolfchase in its appeal, pointed to several factors supporting a reduced value, including the recession, which has wrought havoc in the retail industry.

“In talking to Simon, the biggest concern is getting and keeping national tenants,” Raines said.

Wolfchase recently lost a few tenants that have been in place almost since the mall’s inception.

Pottery Barn and Banana Republic both closed recently. However, “coming soon” signs announce those spaces already have been re-leased.

The posted notices say Pottery Barn is being replaced with Charming Charlie, a women’s accessories store. Aerie, a brand of American Eagle, will fill the Banana Republic space.

That’s in line with one of the major arguments Moody said supports a value increase for Wolfchase – that vacancies at the mall are almost nonexistent.

The picture varied for the other malls. Carriage Crossing was valued at $77.98 million in 2008, which the assessor first appraised last year at $80 million.

But the assessor’s staff was sympathetic to the mall’s arguments and ultimately dropped 2009’s value to $66 million.

Whitehaven’s Southland Mall went from $8.25 million in 2008 to more than $15 million last year. The assessor’s staff cut its 2009 value to $13 million.

Oak Court in East Memphis also got hit with an increase in 2009, climbing to $49 million from a little more than $45 million in 2008. The assessor’s office ultimately decided to leave the 2008 value unchanged for 2009.

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