GUILDERLAND — The first year of the coronavirus pandemic saw the collective sales of Crossgates Mall retailers drop by 56 percent compared to the year prior, according to the latest court filing in the mall’s attempt to cut its Guilderland tax bill by over half in 2020 and 2021. 

Crossgates’ tenants in 2020 reported total sales of $266.5 million, down from  $416.8 million in 2019, according to the filing — dueling appraisals of the mall from the town and Crossgates. 

But the mall’s own appraisal shows Crossgates’ value in the past two years never got as low as the mall claimed in its original court filings. In its 2020 and 2021 tax lawsuits, Crossgates said its assessment should have been about $143 million, not the $282 million at which it was assessed by the town of Guilderland. 

An appraisal is not an assessment. 

An appraisal is performed to determine the market value as 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 is performed by a municipality to determine how much a property owner should pay in taxes for his or her land. Local taxing authorities take into account various factors like prior years’ data, market analyses, and in-person inspections to arrive at an assessment. 

Crossgates’ 2020 appraisal was based on data from July 2019, while its 2021 appraisal was based on July 2020 information. 

For tax year 2020-21, the mall’s appraiser put its valuation at $227 million, while the town of Guilderland countered with $390 million.

For the following tax year, 2021-22, Pyramid said Crossgates’ valuation should be $156 million. The town disagreed and said it should have been $257 million.

In July 2020, as it was delinquent on loans and seeking relief from lenders, Crossgates had its appraised value lowered from $470 million to $281 million.

The mall was determined to be in pretty good shape, if declining slightly.  

The town’s appraisal says the mall doesn’t suffer from “any significant amount of functional obsolescence,” usefulness, or desirability. Crossgates was not determined to be impacted by “external or economic obsolescence,” just what it sounds like, in 2019. But in 2020, “the COVID-19 pandemic was a serious external event,” the town’s appraisal says.

Crossgates’ appraisal said regional malls are rated on an A, B, C, D scale, which takes into account trade area, physical characteristics, tenant sales, and competition. Crossgates’ appraiser dropped its rating between July 2019 and July 2020 from B/B- to B-/C+, due to an increase in vacancies and a decrease in tenant sales. 

Where it started

The original 975,000-square-foot mall footprint opened in 1984. The same year, a near doubling of Crossgates was undertaken to its current 1.7 million square feet.

By 1998, there was an attempt to double the mall’s footprint once again, but the proposal was met with criticism from Guilderland residents and eventual rejection. 

In July 2020, citing the impact of the pandemic and the yearslong decline of brick-and-mortar retail, Crossgates Mall asked an Albany County Court judge to lop off $139 million from its $282 million tax assessment.

In a July 2021 petition, Crossgates, again citing similar reasoning, requested that Justice Margaret T. Walsh slash $162.5 million from its current assessed value of $282.5 million.

If Crossgates were successful, the length of time the new assessed value would apply to the property would depend on the court order, but the new value is usually frozen for three years. If, after the three years, there were changes or improvements to the property, Guilderland could take another look at revaluation.

Guilderland undertook a town-wide revaluation in 2019, which led dozens of landowners to sue the town to lower the value on scores of their properties.

The 2020 Crossgates petition, filed in Albany County Supreme Court by three Crossgates-affiliated limited-liability corporations, argued the mall should receive a near 50-percent drop in its assessed value because, “Prior to the issuance of the Town’s tentative assessment roll, [Crossgates] provided and offered information to the Town’s Assessor concerning the Property and its value,” the mall’s 2020 court filing stated.  

The mall also “advised the Assessor that the Property’s value had declined year-over-year due to continuing pressure on its ‘bricks-and-mortar’ business from e-commerce, sales declines, and record bankruptcies, and store closures, particularly for department stores and fashion retailers that were once the primary focus of [Crossgates’] business.”

The filing went on to claim that “fair market value of the Property ... had also been negatively affected by the devastating impact of the COVID-19 pandemic catastrophe on the condition of the Property.”

The town responded by arguing that the first appearance of coronavirus and the nature of pandemics in general were not reasons for cutting Crossgates assessment in half. The pandemic, however early it may have begun, Guilderland argued, still occurred “outside the scope” of the town’s 2020 assessment.

The town’s appraisal noted a court recently ruled the pandemic couldn’t be taken into account when determining a property’s assessed value for tax year 2020.

Generating tax funds

Crossgates as of June 2020 generated $34 million in annual sales-tax revenue, according to Assemblywoman Patricia Fahy’s office. Guilderland received $6.87 million; Albany County collected $10.3 million; and New York State kept the remaining $17.17 million.

In tax year 2019, the seven parcels of land that collectively make up Crossgates paid taxing jurisdictions within Guilderland — the town itself; Guilderland schools; and the public library — about $7 million in taxes.

If Crossgates were to win its lawsuit, the property taxes it pays to the town could be cut by about half. 

The town appraisal 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.”

Over the course of the pandemic, Crossgates had missed $10 million in principal and interest payments on its now-balance of $250.7 million in debt spread across three loans associated with the property, for which the mall has at least $1.68 million in loan repayments each month. The mall received a year’s extension to pay back the loans, which come due in 2023.

Crossgates also has millions more in construction loans on its books coming due this year.

While the mall was missing its own loan payments, it was chasing its tenants for theirs.

In 2019, Crossgates received $29,373,969 in rent from its tenants; by the following year, that number had dropped to $18,465,416 — a 37-percent decline (Total revenue in 2019 was $46,115,498 compared to $30,245,934 in 2020).

By October 2020, 10 tenants owed the mall at least a collective $1.9 million in combined derelict lease payments.

The lawsuits have been largely settled. 

The mall’s appraisal notes an uptick in rent abatements, which are “negotiated to forgive a portion of contract rent based on the tenant’s declining sales performance.” Abatements for Crossgates tenants increased from $70,000 in 2019; to $772,635 in 2020; to $3,638,367 in 2021.