Lycoming Mall owners seek lower tax assessment

PENNSDALE — Kohan Retail Investment Group, which owns the Lycoming Mall, is appealing a Lycoming County Board of Assessment decision to deny its request for a lower tax assessment.

The mall is assessed at $44.89 million, said Gwen Pidcoe, Muncy Township office manager.

Kohan, which owns the property under the name Lycoming Mall Realty Holdings, paid about half of that amount — $26.35 million — when it purchased the site in 2016.

In the fall of 2016, a few months after it purchased the mall and prior to the closing of Macy’s and J.C. Penney, the owners filed an appeal with the Lycoming County Board of Assessment to have its assessment reduced.

A hearing was held that year, but the mall owners did not provide sufficient documentation, according to Brooke Wright, chief county assessor. They did provide a new appraisal, but the assessment board questioned it and arranged for a second one to be done.

Pidcoe said the appraisal was questioned because it was believed that the mall’s value is more in line with the current assessment and not with the purchase price, which the owners were asserting.

Due to the lack of documentation, Wright said, the appeal was denied and automatically sent to the Court of Common Pleas for determination.

Kohan did not respond to calls for comment on this story.

According to Deana Miller, general property manager for the mall, the shopping center has lost two major anchors, Macy’s and J.C. Penney. A third, Sears, will close by January.

Two other major anchors, Burlington Coat Factory and Bon-Ton, plus three junior anchors, BAM, Old Navy and Dick’s Sporting Goods, remain.

“They’ll use the loss of the anchor stores as an argument for the appeal,” said David Edkin, business administrator at Muncy School District.

Property taxes are based on the value of a property’s real estate, buildings and land, according to Pidcoe, and business owners must pay property taxes regardless of whether the business is thriving.

Taxes paid by the mall supply $87,977 in revenue for Muncy Township and $252,935 for the county.

If the tax assessment were changed, the township could lose between $35,000-$40,000, Pidcoe said.

As stores at the mall close, earned income taxes also are affected. This tax is collected by municipalities from the wages of employees. Fewer employees equals less tax collected.

Although Muncy Township — which is where the mall is located — would be affected by the closing of the businesses, a greater loss is realized by Muncy School District, which encompasses the surrounding area, according to Tom Schaech, Muncy Township supervisor.

“Anytime a business closes, it has a negative impact on the township,” Schaech said, “but we are the smallest chip. The school district comes first, then the county and then the township.”

With a tax rate of 15.5 mills in its 2017-18 budget, the school district stands to get a significant amount of tax money from the mall properties. It would take a loss of $350,000 in tax revenue if the assessment for the property is lowered by half.

The school district also could lose more in earned income taxes if employees of the closed stores do not find other jobs, according to Edkin.

Edkin said the mall’s lawyers have not reached out to the school district to possibly work out a compromise.

The former Macy’s store property is separately owned by Macy’s, Pidcoe said, and is not a part of the rest of the Lycoming Mall. The storefront is for sale.

Mall management said they were unaware of the appeal.