Acadiana Mall’s new owners get Macy’s property tax bill slashed

Photo by LeeAnn Stephan
The Macy's building's new owners didn't get the drastic reduction they were seeking from the tax assessor, but their successful appeal cut the $11 million assessment in half.
This story has been updated to reflect that assessor Conrad Comeaux actually lowered the value of the mall's land in August. He contacted The Current Thursday to correct his earlier statement that the mall's assessment had not changed this year. The story has also been updated to reflect that Ambassador Town Center is paying its estimated property taxes to retire infrastructure debt.


The gist: Acadiana Mall’s new owners appealed the assessment of the Macy’s building and got a big reduction from the tax assessor, but New York-based Namdar Realty did not appeal the value placed on the mall itself — one that has remained exceptionally low over the past decade.  

Get caught up, quickly: Namdar Realty, operating as Acadiana Mall LLC, purchased Acadiana Mall in January for $39 million, a figure that represented a loss of nearly $85 million for the trust that held the loan against the shopping center. Tax assessor records show that at the same time it purchased the mall, the Namdar group separately bought the Macy’s space from CBL & Associates Properties, the mall’s former owner, for $2.5 million. The shopping complex is approximately 1.6 million square feet, but Dillard’s owns its building, the vacant Sears location is held by a subsidiary of Seritage Growth Properties and JCPenney recently sold its space to a subsidiary of a Miami-based real estate firm

Lafayette Parish Tax Assessor Conrad Comeaux agreed to lower the Macy’s assessment to $5.3 million, which means its $138,000 tax bill will be more than cut in half. Comeaux has pegged the market value for the Macy’s location (which includes the land and parking lot) at almost $11 million since 2016. Namdar Realty was asking that it be reduced to $2.5 million, essentially what it paid separately for the Macy’s building when it bought the mall earlier this year. 

“We said, ‘No, I don’t think so,’” Comeaux says. “The land is worth more than that. Give me a break.” (Worth noting: A few months ago the new owners shut off the upstairs of the Macy’s store and are converting it to a distribution center for online orders, an employee at the store told me on a recent visit.) Namdar’s Ohio-based attorney, Ryan Gibbs, did not return a call seeking comment. A message left with Namdar’s leasing office also was not returned. 

Namdar didn’t appeal the assessment of the mall itself. Frankly, it didn’t need to — it’s already under-assessed (and was actually lowered by $1.2 million this year). Acadiana Mall, which appraised for $46 million in July of 2018, is assessed at a mere $22 million — which Comeaux says includes 400,000 square feet of space, parking lots and a couple of streets — a figure the tax assessor’s office has held steady for at least a decade. 

The mall appraised for $188 million after a 2007 renovation, according to Commercial Real Estate Direct, a news and information service covering real estate capital markets. It was built in 1979 and underwent two other renovations in 2004 and 2013. 

In 2007, then-owner CBL & Associates Properties took out a $150 million commercial mortgage backed securities (CMBS) loan against the mall. Still, the tax assessor determined its market value to be only $20 million in a 2008 reassessment (reassessments are conducted every four years, with the next set for 2020, but values can be adjusted after a sale). That means the mall, at the time the biggest retail engine in the city, paid only $264,000 in city and parish property taxes back then; in 2018 it paid about $308,000. And while appraised values and assessed values often vary for any number of reasons — among them tax laws, frequency of reassessments and which part of the country you live in — this particular discrepancy is troubling.

Tax assessments for Acadiana Mall:

2008 – $20M (up from $16M in 2007)
City taxes paid: $46,000
Parish taxes paid: $218,000

2012 – $22M
City taxes paid: $52,500
Parish taxes paid: $246,500

2016 – $23M
City taxes paid: $53,800
Parish taxes paid: $254,000
*Values remained the same between reassessments

Comeaux says his office is just getting around to addressing these types of problems in big box values. He’s served as assessor since 2001 and is currently up for re-election. 

“This is what we’re working on correcting,” Comeaux says. He explains that his office has been using a “cost approach” (i.e., cost of land and construction less depreciation) to determine taxable market value. But a couple of years ago he began the process of valuing strip centers and big box retail spaces on income produced. Comeaux says he’s been assessing apartment complexes based on the income they generate for about two decades, and other large commercial structures have slowly entered the system. It’s taken this long to get to major retail, he says.

The sale of the mall actually led to a $1.2 million decrease in this year’s assessment. Comeaux says he lowered the value of the land in August, in part because a zero sales price was shown in public records for the purchase of the mall. (The zero value reflects that no sum was paid to CBL & Associates, the mall’s previous owner, because the property was seized after CBL defaulted on the loan.) The Current provided Comeaux with proof of the $39 million purchase price and also informed him that Namdar had recently lined up a $33 million loan against the property. We asked if he would be adjusting the assessment in light of the new information. 

“I will be able to correct the value next year,” Comeaux said in an emailed response, “but can’t make a change this year due to the passing of the appeal period.”

Despite its struggles, Acadiana Mall still has a bigger impact on the local economy than Ambassador Town Center, which opened in 2016. If the Lafayette Economic Development Authority’s analyses are accurate, Acadiana Mall had a total economic impact of $230 million in 2018, versus the Costco-anchored center’s $182 million impact. Estimated property taxes that would have been generated by Ambassador Town Center, a shopping complex developed using a payment in lieu of taxes incentive program, are being used to pay down debt on its millions in infrastructure over an 11-year period. Developers of the 430,000-square-foot center (roughly the size of the mall) estimated their the annual property taxes to be $800,000 a year.

Why this matters: The inexplicable delay in assessing big boxes like the mall based on the income they produce, versus a cost approach, has left millions of dollars in property tax monies on the table. And now, with Lafayette’s struggling economy and the mall and other major retailers facing an uncertain future, there’s no possible way to play catch up. 

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About the Author

A founding editor of both The Independent and ABiz and senior editor at The Times of Acadiana in the 1990s, Leslie Turk has worked in the newspaper business in Lafayette for almost three decades. Her work has also appeared in The New York Times and The Acadiana Advocate. Email her at leslie@thecurrentla.com.

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