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Marion County to ask Indiana Tax Court to take mall cases

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Marion County is granting Simon Property Group Inc. a $2.4 million refund, after a tax review board cut the value of two ailing malls roughly in half.

Simon prevailed before the Indiana Board of Tax Review in each of two cases, which covered Lafayette Square Mall and Washington Square Mall for multiple years.

“We were surprised it went completely their way,” Marion County Assessor Joseph O’Connor said. In each case, the review board chose Simon’s values over the county’s, rather than arriving at an in-between value, which is also an option.

O’Connor plans to appeal both decisions to the Indiana Tax Court, but said Simon will get its refund in the meantime because he doesn’t want to risk racking up interest charges while cases are pending.

The two malls’ declines are well-documented, but the county and Simon were nowhere close to agreement in their appraisals.

Marion County had valued Lafayette Square at $35 million in 2006, for example, while Simon argued it was worth $15 million.

Likewise, the county’s appraiser valued Washington Square at $22 million for 2006, while Simon’s appraiser pegged it at $12 million.

The lowest value that Indianapolis-based Simon presented for Washington Square was $9.5 million for 2010.

Located in older Marion County suburbs, the malls have about four decades behind them. Lafayette Square opened in 1968 at Lafayette Road and West 38th Street, and Washington Square opened in 1974 on East Washington Street.

Simon didn’t build either mall, but acquired them in 1996 through its $1.6 billion purchase of Ohio-based DeBartolo Realty.

Household spending power in both areas has declined, especially around Lafayette Square. Simon took its name off the mall in 2005 and sold it in 2007 to New York-based Ashkenazy Acquisition Corp. for $18 million.

Simon still owns Washington Square. Though Simon’s appraiser made a strong case that it will continue to decline, spokesman Les Morris said the company hasn’t turned its back on the property.

“We’re very actively leasing it and managing it,” he said. “It’s a solid area.”

The three-member tax review board handed down its decision on Washington Square, which covered 2006 through 2010, in September. The ruling on Lafayette Square, for 2006 and 2007, came out Oct. 3.

Simon’s arguments don’t appear to have swayed the county’s current assessments – $22.9 million for Lafayette Square and $24.9 million on Washington Square.

As long as an assessor calculates new values each year, the taxpayer has to start the appeals process from scratch, said Larry Stroble, a partner at Barnes & Thornburg who was not involved in the Simon appeals.

The depressed state of commercial real estate could give the mall owners a strong incentive to pursue more appeals.

“All major owners of commercial real estate are monitoring their expense levels as closely as they can,” said James Sullivan, managing director and senior analyst covering real estate companies for Cowen Group in New York. “It’s certainly been, over the last couple of years, a pretty active part of many of these companies’ strategies.”

The $2.4 million, which doesn’t include interest, is a relatively small figure for Simon, which is the world’s largest real estate company and has revenue topping $4.5 billion. While Marion County is strapped for cash, it will have no problem writing the check, said Richard Hunter, director of settlements for the Marion County auditor.

Marion County has refunded $20 million to $40 million in property taxes a year since the state-mandated reassessment of 2007, Hunter said. The county has made multimillion-dollar refunds to other prominent companies, including Eli Lilly and Co.

Sometimes it pays to let a property go back to the bank, Sullivan said. If a property is worth less than the mortgage, writing off that liability increases a company’s book value, he said.

“Just about all owners of retail real estate will have this circumstance occur,” he said.

O’Connor will be making his appeal on a shoestring budget. One reason it’s even feasible, he said, is that one of his analysts, John Slatten, is also an attorney and CPA who can dedicate his time to the cases.

Marion County has defended appeals before the tax court, but O’Connor said he can’t remember the last time the county carried the burden of proof as petitioner.

“I feel lucky to have such great people,” O’Connor said. “I’ll put a so-called government worker up against private industry people any day.”•

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  1. I have been on this program while on parole from 2011-2013. No person should be forced mentally to share private details of their personal life with total strangers. Also giving permission for a mental therapist to report to your parole agent that your not participating in group therapy because you don't have the financial mean to be in the group therapy. I was personally singled out and sent back three times for not having money and also sent back within the six month when you aren't to be sent according to state law. I will work to het this INSOMM's removed from this state. I also had twelve or thirteen parole agents with a fifteen month period. Thanks for your time.

  2. Our nation produces very few jurists of the caliber of Justice DOUGLAS and his peers these days. Here is that great civil libertarian, who recognized government as both a blessing and, when corrupted by ideological interests, a curse: "Once the investigator has only the conscience of government as a guide, the conscience can become ‘ravenous,’ as Cromwell, bent on destroying Thomas More, said in Bolt, A Man For All Seasons (1960), p. 120. The First Amendment mirrors many episodes where men, harried and harassed by government, sought refuge in their conscience, as these lines of Thomas More show: ‘MORE: And when we stand before God, and you are sent to Paradise for doing according to your conscience, *575 and I am damned for not doing according to mine, will you come with me, for fellowship? ‘CRANMER: So those of us whose names are there are damned, Sir Thomas? ‘MORE: I don't know, Your Grace. I have no window to look into another man's conscience. I condemn no one. ‘CRANMER: Then the matter is capable of question? ‘MORE: Certainly. ‘CRANMER: But that you owe obedience to your King is not capable of question. So weigh a doubt against a certainty—and sign. ‘MORE: Some men think the Earth is round, others think it flat; it is a matter capable of question. But if it is flat, will the King's command make it round? And if it is round, will the King's command flatten it? No, I will not sign.’ Id., pp. 132—133. DOUGLAS THEN WROTE: Where government is the Big Brother,11 privacy gives way to surveillance. **909 But our commitment is otherwise. *576 By the First Amendment we have staked our security on freedom to promote a multiplicity of ideas, to associate at will with kindred spirits, and to defy governmental intrusion into these precincts" Gibson v. Florida Legislative Investigation Comm., 372 U.S. 539, 574-76, 83 S. Ct. 889, 908-09, 9 L. Ed. 2d 929 (1963) Mr. Justice DOUGLAS, concurring. I write: Happy Memorial Day to all -- God please bless our fallen who lived and died to preserve constitutional governance in our wonderful series of Republics. And God open the eyes of those government officials who denounce the constitutions of these Republics by arbitrary actions arising out capricious motives.

  3. From back in the day before secularism got a stranglehold on Hoosier jurists comes this great excerpt via Indiana federal court judge Allan Sharp, dedicated to those many Indiana government attorneys (with whom I have dealt) who count the law as a mere tool, an optional tool that is not to be used when political correctness compels a more acceptable result than merely following the path that the law directs: ALLEN SHARP, District Judge. I. In a scene following a visit by Henry VIII to the home of Sir Thomas More, playwriter Robert Bolt puts the following words into the mouths of his characters: Margaret: Father, that man's bad. MORE: There is no law against that. ROPER: There is! God's law! MORE: Then God can arrest him. ROPER: Sophistication upon sophistication! MORE: No, sheer simplicity. The law, Roper, the law. I know what's legal not what's right. And I'll stick to what's legal. ROPER: Then you set man's law above God's! MORE: No, far below; but let me draw your attention to a fact I'm not God. The currents and eddies of right and wrong, which you find such plain sailing, I can't navigate. I'm no voyager. But in the thickets of law, oh, there I'm a forester. I doubt if there's a man alive who could follow me there, thank God... ALICE: (Exasperated, pointing after Rich) While you talk, he's gone! MORE: And go he should, if he was the Devil himself, until he broke the law! ROPER: So now you'd give the Devil benefit of law! MORE: Yes. What would you do? Cut a great road through the law to get after the Devil? ROPER: I'd cut down every law in England to do that! MORE: (Roused and excited) Oh? (Advances on Roper) And when the last law was down, and the Devil turned round on you where would you hide, Roper, the laws being flat? (He leaves *1257 him) This country's planted thick with laws from coast to coast man's laws, not God's and if you cut them down and you're just the man to do it d'you really think you would stand upright in the winds that would blow then? (Quietly) Yes, I'd give the Devil benefit of law, for my own safety's sake. ROPER: I have long suspected this; this is the golden calf; the law's your god. MORE: (Wearily) Oh, Roper, you're a fool, God's my god... (Rather bitterly) But I find him rather too (Very bitterly) subtle... I don't know where he is nor what he wants. ROPER: My God wants service, to the end and unremitting; nothing else! MORE: (Dryly) Are you sure that's God! He sounds like Moloch. But indeed it may be God And whoever hunts for me, Roper, God or Devil, will find me hiding in the thickets of the law! And I'll hide my daughter with me! Not hoist her up the mainmast of your seagoing principles! They put about too nimbly! (Exit More. They all look after him). Pgs. 65-67, A MAN FOR ALL SEASONS A Play in Two Acts, Robert Bolt, Random House, New York, 1960. Linley E. Pearson, Atty. Gen. of Indiana, Indianapolis, for defendants. Childs v. Duckworth, 509 F. Supp. 1254, 1256 (N.D. Ind. 1981) aff'd, 705 F.2d 915 (7th Cir. 1983)

  4. "Meanwhile small- and mid-size firms are getting squeezed and likely will not survive unless they become a boutique firm." I've been a business attorney in small, and now mid-size firm for over 30 years, and for over 30 years legal consultants have been preaching this exact same mantra of impending doom for small and mid-sized firms -- verbatim. This claim apparently helps them gin up merger opportunities from smaller firms who become convinced that they need to become larger overnight. The claim that large corporations are interested in cost-saving and efficiency has likewise been preached for decades, and is likewise bunk. If large corporations had any real interest in saving money they wouldn't use large law firms whose rates are substantially higher than those of high-quality mid-sized firms.

  5. The family is the foundation of all human government. That is the Grand Design. Modern governments throw off this Design and make bureaucratic war against the family, as does Hollywood and cultural elitists such as third wave feminists. Since WWII we have been on a ship of fools that way, with both the elite and government and their social engineering hacks relentlessly attacking the very foundation of social order. And their success? See it in the streets of Fergusson, on the food stamp doles (mostly broken families)and in the above article. Reject the Grand Design for true social function, enter the Glorious State to manage social dysfunction. Our Brave New World will be a prison camp, and we will welcome it as the only way to manage given the anarchy without it.

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