The largely vacant East End Centre shopping area in Wilkes-Barre Township has received a $3.4 million property assessment reduction, resulting in a $78,121 annual revenue loss for taxing bodies.
At least two other shopping centers have obtained multi-million-dollar assessment reductions since Luzerne County’s reassessment, which took effect in 2009 — the Wyoming Valley Mall in Wilkes-Barre Township and a portion of the West Side Mall complex in Edwardsville.
The owner of the Laurel Mall in Hazle Township also has a pending assessment challenge, records show.
The East End Centre’s owner, Bryn Mawr-based WP Realty Inc., will pay a combined $163,355 in school, county and municipal real estate taxes on the new assessment of $7.14 million.
The Wilkes-Barre Area School District lost $53,027 in annual revenue from the reduction based on current tax rates, while the loss is $19,628 for the county and $5,466 for the township, records show.
The county recently had to refund $80,000 in past tax payments on the East End Centre dating back to the assessment challenge’s filing in 2010, records show.
The 40-acre property houses the Red Lobster on Kidder Street, the Old Country Buffet and seven businesses in two strip centers, including Big Lots, Deb Shops and the Dollar Tree.
A dozen spaces are vacant in the two strip centers, including those once filled by Price Chopper supermarket, the Steve & Barry’s and Dots apparel stores and a Factory Card Outlet store. The former Chi-Chi’s restaurant closed a decade ago.
The assessment reduction was based on an appraisal that factors in the impact of vacancies and difficulties attracting tenants, said county Assistant Solicitor David Schwager, who handles assessment matters.
An “income approach” is typically used to value commercial properties, which considers projected rental income and overhead costs such as utilities and sewage, Schwager said.
The condition, amenities and location of a commercial property play a role in rental income. For example, Red Lobster is the only business in the East End Centre fronting a busy highway, he said.
“The bulk of the center can’t really even be seen from Kidder Street,” Schwager said.
Representatives of WP Realty Inc., which put ownership of the property under the name WP East End Associates LP, could not be reached for comment on the assessment and vacancies.
The real estate investment and management company purchased the property for $10 million in 2006.
Its website emphasizes the center’s proximity to Interstate 81, downtown Wilkes-Barre and the Mohegan Sun Arena. The property was constructed in phases in 1987 and 1996, the site says.
Reduction in 2013
WP Edwardsville Associates LLC, which uses the same address as WP Realty Inc., received a combined $2.3 million in assessment reductions last fall on two portions of the West Side Mall complex on Wyoming Avenue, including the Lowe’s store.
The reduction from $13.7 million to $11.35 million on the two properties equated to a loss of $12,490 in revenue for the county, $8,351 for Edwardsville and $33,230 for the Wyoming Valley West School District based on current tax rates.
WP Edwardsville sold these properties along with others at the complex to Edwardsville Mall LP in December.
The Wyoming Valley Mall assessment was reduced by $13 million to a new value of $76.1 million through a challenge resolved in 2012.
PR Wyoming Valley Limited Partnership pays $1.74 million in property taxes on the Wilkes-Barre Township mall, or $297,000 less than the amount that would be owed on the original assessment.
The Wyoming Valley Mall is among the 10 highest assessed commercial properties in the county.
The assessment of the Laurel Mall in Hazle Township, also is on the top 10 list at $30.6 million.
Laurel Mall Limited Partnership, which owns the 34.8-acre mall property, pays $480,560 in real estate taxes based on current rates and is contesting the tax value in a court-level challenge, records show.