The Butler County Board of Revision — which is an independent board under the county auditor’s office — approved property value reductions for both, first a $14 million reduction last summer and another $15 million due to COVID-19s impact.
The reductions brought the total value down to $109 million for the impacted parcels. The mall owners appealed the BoR decision to the Ohio Board of Tax Appeals. The two sides recently settled the matter at a value of $109 million that will be in place through 2025.
Chief Assistant Prosecutor Dan Ferguson said Liberty Center was arguing they deserved a further offset because they don’t own the parking garages, the county does.
“It was, in our opinion, not a well-founded argument, because the appraisals had been, in the first place, based upon the property they do own,” Ferguson said. “So eventually they went ahead and essentially withdrew that and it settled to where the auditor thought it should settle.”
Mike Gildea, an appraiser with the Butler County Auditor’s Office said “we feel this value to be fair considering the ongoing occupancy problems Liberty Center retail has experienced since it’s opening and hope to see them maximize occupancy by our next reappraisal.”
Liberty Center officials had no comment.
The value drop has cost Liberty Mall. As part of the original complicated development deal the county negotiated a minimum value guarantee and if the total value drops below $192.5 million the owners must pay the county a service fee. County Administrator Judi Boyko said they billed $166,751 for the first half of the year and the total will be $333,502, because the value dipped below the threshold.
“It is an obligation of those properties to maintain a certain property value or compensate the TIF accordingly,” Boyko said. “Obligating those properties to a targeted value and requiring the commercial property owners maintain a minimum property valuation, demonstrate the board of commissioners’ commitment to the responsible stewardship of taxpayers’ money.”
The $350 million mega mixed-use development opened in October 2015 on 65 acres in Liberty Twp. off Interstate 75. It has a range of retail, shopping, dining, living and office space and entertainment venues.
Steiner + Associates developed the project that was touted as a one-of-a-kind destination, and it is now owned by Apollo Commercial Real Estate Finance Inc. and run by Bayer Properties. The center, like the rest of the world, was crippled by the COVID-19 pandemic.
Last year, the county commissioners and Liberty Twp. trustees worked with Apollo for months, trying to work out a deal that would bolster the finances of the center during bleak retail times. Those talks ended with no agreement.
Part of the negotiations included the county offering to pay the center $6.8 million over six years in lieu of Apollo seeking the property value reductions.
Mike Stein, tax accounting manager for the county auditor’s office, told the Journal-News previously with a new retail portion value of $109 million, Liberty Center will save about $623,502 in taxes with the reduction. Had the value dropped to $65 million the tax savings would have amounted to $931,174.
“The owners exercised their right to suggest a value and our auditor’s obviously knew the right number,” Commissioner T.C. Rogers. “It’s a reduction but in the grand scheme of things, because there’s other things going up, the county’s not hurt because we have a minimum.”
Liberty Twp. does not have a similar arrangement and like all townships property taxes are their primary revenue source. Trustee Tom Farrell said there is no way to tell how much they will lose with the value reduction, but he prefers to look at the big picture.
“I’m not interested in the short term dollars that can come in from a development, I am looking at the long-term sustainability of an entity and what it can do to the township long-term,” Farrell said.
“I am all in that Liberty Center is an asset to our township and will be. If the decrease in value helps them stay viable it’s an advantage to us and we all have to do our part.”
Liberty Center officials told the Journal-News previously the old development plan doesn’t work in the current reality.
“What’s happened in retail, the change has accelerated so quickly, so quickly and a lot of that is because of COVID,” Bayer President Libby Lassiter told the Journal-News. “Apollo is having to reinvest in the property, seven years into it, with significant dollars to make changes to what is now current, is now the next new thing, that’s highly unusual in a retail shopping center.”
Part of that strategy is bringing in more office tenants and apartments. Apollo applied to Liberty Twp. for “major modifications” to the development plan, for a four-story, 273-unit apartment building and two restaurants, that depart from the original development plan.
The trustees denied the apartment building but approved the Shake Shack — that is a casual dine-in restaurants with a drive-thru — and Torchy’s Tacos restaurants — both new to this region — as well Optima Dermatology in a nearby, two-story structure.
Farrell said the trustees have talked individually with Liberty Center representatives but no new plans have been formally presented.
The county’s big concern with the property value reduction is it could impact repayment of the $49 million in infrastructure bonds and loans floated to support the development.
The Liberty Community Authority was formed to serve as a watchdog over the taxpayer investment in the development. The LCA is responsible for maintaining garages and storm water systems at the center and paying off the debt to build those. It uses several assessments to repay the debt, including a 10-mill assessed value charge levied against the properties on the site, which will be impacted by the value reduction.
LCA Chairman Phil Morrical told the Journal-News he has not been told the value drop has impacted their ability to pay their bills.
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