GUILDERLAND — It’s that time of year again — when two of Guilderland’s more prominent property owners seek to pay less in taxes. 

Macy’s Article 7 petition makes it four years and counting that the iconic retailer has sought to dramatically lower its Guilderland tax bill. While it’s the third year in a row Crossgates Mall has filed a lawsuit against the town in an attempt to halve its assessed value.

On July 7, Crossgates Mall requested that Albany County Supreme Court Justice Margaret T. Walsh reduce its assessed value from $234 million to $109 million.

Macy’s, which owns the 12 acres of mall on which it’s built, asked the same judge on July 8 to lop 82.5 percent from its assessed value, from $15.7 million to $2.7 million.

Crossgates’ $234 million figure is already a lower number than years’ past — because it was lowered this year by Guilderland’s assessor.

In July 2020, citing the impact of the pandemic and the yearslong decline of brick-and-mortar retail, Crossgates asked Walsh to disappear $139 million from its $282 million tax assessment. The following July, Crossgates, again citing similar reasoning, requested Walsh slash $162.5 million from its current assessed value of $282.5 million.

The mall’s July 2022 court filing states it “advised the Assessor that the Property’s value had declined year-over-year due to various factors including continuing pressure on its ‘bricks and mortar’ business from e-commerce, sales declines, rent declines, and record bankruptcies and store closures (particularly for department stores and fashion retailers).”

The petition goes on to argue that “the impact of these factors was compounded by the COVID-19 pandemic and its after-effects, which further caused a precipitous decline in the value of the Property in addition to, and on top of, the decline in value due to the impact of such factors.”

Based on all these factors, Crossgates says $125 million should be subtracted from its assessment. The town disagreed with the request but for the first time was amenable to a reduction, subtracting $48 million from the mall’s assessed value — the town’s equalization rate this year is 91 percent; the town placed  a full-market value of $257.4 million on Crossgates in 2022. 

In mid-June, a three-day trial was set for Nov. 14 for Crossgates’ tax certiorari case against Guilderland. If the mall were to win its suit, the amount it pays to taxing jurisdictions — the town, school district, library, and county — could be cut by about half.

In an appraisal submitted to the court, Guilderland estimated Crossgates’ tax bill for 2020 and 2021 would have been $6.98 million and $7.02 million, respectively. However, the appraisal states, “because the assessments are under appeal, the eventual actual real estate taxes are unknown.” 

In tax year 2019, the seven parcels of land that collectively make up Crossgates paid about $7 million in property taxes.

Macy’s 

Unlike Crossgates’ petitions, Macy’s July 2021 and 2022 court filing did not include specific reasoning as to why it should receive a reduced assessment. However, the retailer said those specifics were offered to the town’s assessor — some in the form of statements made under oath — when the retailer grieved its assessment. 

But recent filings in Macy’s 2020 lawsuit against the town show the toll the pandemic has taken on its sales, and the decline of brick-and-mortar retail in general.

Macy’s Crossgates’ store sales in 2020 were approximately $8.3 million compared to $18.7 million in 2019. 

The drop in sales aligns with other mall tenants.

The first year of the coronavirus pandemic saw the collective sales of Crossgates Mall retailers drop by 56 percent compared to the year prior. Mall tenants in 2020 reported total sales of $266.5 million, down from  $416.8 million in 2019.

Macy’s store at Crossgates saw 2018 sales of $19.3 million, which was a rebound from 2017 when sales were $17.8 million. In 2016, they were $19.8 million; in 2015, $21.9 million; and in 2014, Macy’s sales at Crossgates were $23.5 million. 

A win for the retailer would be a major hit to Guilderland’s tax coffers. 

In 2021, Macy’s paid nearly $282,000 in school taxes.

The retailer paid another $98,450 into eight tax buckets, chief among them: about $54,500 to Albany County; about $14,600 to the Westmere Fire Department; about $12,2oo to Guilderland’s Highway Department; and about $10,450 for water. 

In that recent filing — appraisals of the property from Guilderland and Macy’s — both the town and retailer place a value on the property somewhere in the middle of the current assessed value and Macy’s requested assessment.

Additionally, Macy’s own appraisal shows its value in 2018 and 2019 (the dates of the valuation) never got as low as the retailer claimed in earlier court filings.

Macy’s said its appraised value should be $9.9 million, at a 100-percent equalized rate — Guilderland’s equalization rate this year was 91 percent, or about $9 million. 

Guilderland’s appraisal said the property should be valued at $10.8 million; with a 91-percent equalization rate, that’s about $9.8 million. 

But an appraisal is not an assessment. 

An appraisal is performed to determine the market value of a property at a certain date, under a certain set of conditions. It is an opinion. Loan lenders often use appraisals to determine the value of a property.

An assessment, on the other hand, is performed by a municipality to determine how much a property owner should pay in taxes. Local taxing authorities take into account various factors like prior years’ data, market analyses, and in-person inspections to arrive at an assessment.