The Town of Amherst has lowered the value of the Boulevard Mall by 59% to settle a challenge brought by property owner Douglas Jemal and to reflect the mall's weakened financial position.
Town Assessor David C. Marrano has agreed to reduce the mall's fair market value to $13.48 million, from its current value of $32.97 million, for the 2021-22 tax year, said Peter Allen Weinmann, Jemal's attorney. The mall's assessed value for tax purposes would fall from $30 million to $11.9 million.
As part of the settlement, Jemal agreed to drop its challenge of the mall's value for the 2020-21 tax year, Weinmann said. Because Jemal is not seeking a refund of property taxes previously paid, the Amherst Town Board and Sweet Home School Board do not have to approve the settlement.
"We feel that this is a reasonable compromise," Weinmann said in an interview. "It is a fair settlement for the taxpayer and the taxing authority."
Marrano did not respond to a request for comment Wednesday. Amherst Supervisor Brian J. Kulpa said he's glad the legal challenge is resolved and the town can continue to work with Jemal on reviving the former retail powerhouse.
"The downturn in the mall's value is part of an economic outlook which started a decade ago and fell off a cliff once the mall fell into receivership," Kulpa told The Buffalo News. "Its ultimate demise is what I expected and is now the very condition which allows us to start rebuilding our economic base."
Jemal has an ambitious, multiyear plan to overhaul the Boulevard Mall into a walkable, mixed-use community.
Weinmann last year filed paperwork with the town arguing the fair market value of the four parcels that make up the Boulevard Mall should be slashed by 77%, to $7.63 million.
Weinmann, in making his case for an assessment reduction, pointed to the price Jemal paid in 2019 for the mall property, the loss of business because of the pandemic and ongoing challenges to bringing consumers back to enclosed shopping centers.
The Boulevard Mall, the region's second-largest shopping mall, was closed between March and July last year under Gov. Andrew M. Cuomo's Covid-19 "pause" executive orders.
Marrano, in response, vowed to fight Weinmann's claims in court.
The town assessor previously said the assessment challenge was disappointing because his office worked closely with Jemal's Douglas Development Corp. in June 2019 to lower the value of the mall, which the developer purchased that year for $24.05 million.
Marrano told The News last year that Jemal's purchase of the mall was not a true "arm's-length" transaction – which would more accurately represent market value – because it was a foreclosure auction, not a directly negotiated agreement between independent parties.
The seller was LNR Partners, the South Florida-based special loan servicer that had foreclosed on the property for investors after the Boulevard Mall's longtime owner, Forest City Properties of Cleveland, had defaulted on its mortgage.
The mall had been valued at more than $50 million five years ago.
Jemal also owns the site of the Wegmans Food Market on Alberta Drive, across from the mall, and had sought a reduction in that property's fair-market value from $9 million to $4.1 million. Weinmann said he dropped this challenge as part of the larger agreement with Marrano and the town.
The Boulevard Mall isn't alone in confronting a decline in its financial position.
Weinmann also filed court papers last year seeking an 88% reduction in the value of the Eastern Hills Mall in Clarence, from $25.73 million to just $3 million. That case remains in litigation, Weinmann said.