Mall’s woes sap worth of Dillard’s property
Beth Potter
LONGMONT — The value of the Dillard’s property at Twin Peaks Mall continues to decline, a trend Boulder County Assessor Jerry Roberts linked to the surrounding mall’s “economic obsolescence.”

The department store’s property at the mall in southwest Longmont was valued at $2.9 million in June 2012, according to county records, a 22 percent decrease from the previous assessment of $3.8 million made in June 2010. Roberts defined “economic obsolescence” as the department store essentially operating in a vacuum as Twin Peaks goes through a scheduled $80 million redevelopment process that includes tearing down the existing mall.

“Our estimate is based on that fact that you’ve got something that’s functioning, but with these economic obsolescence factors around it,” Roberts said. “It’s unique in that respect.”

The Dillard’s department store building was appraised at $3.03 million in November by an appraiser hired by the city of Longmont. Longmont city officials are negotiating with representatives of Dillard’s after the city council in April approved a plan that allows the city to exercise eminent domain on the store. Eminent domain is the term used to describe a government’s legal right to take private property for public use after compensating a property owner.

An appraised value is a better indication of a property’s worth than an assessed value because it can be more detailed, said Wade Arnold, principal broker associate at The Colorado Group Inc. in Boulder, a commercial real estate brokerage. While a public assessor’s office can look at more detailed information, its employees most commonly look just at comparable sales of other buildings when doing a commercial building valuation, Arnold said.

“A third-party appraisal looking at one building can dive in a lot more in-depth to what a reasonable value would be,” Arnold said.

Sam Forsyth, an advanced-appeals deputy in the Boulder County Assessor’s office, agreed with Arnold. Forsyth, who worked on the Dillard’s department store valuation, said the county’s valuation of the property only is meant to be used for tax purposes.

“The city and the developer and Dillard’s might have a different basis for how they want to evaluate this for their purposes,” Forsyth said.

A Dillard’s representative did not immediately return a call requesting comment. Company representatives in April said in a statement that Dillard’s is “disappointed” at the city council’s decision to authorize the eminent-domain process.

Mall redeveloper NewMark Merrill has negotiated unsuccessfully with Dillard’s over various strategies for its 94,000-square-foot building and surrounding property in the past year, offering a final cash price of $3.5 million at the end of March. Dillard’s holds veto power over any redevelopment of property at the site.

NewMark Merrill bought the indoor mall for $8.5 million last year. The existing mall is scheduled to be demolished, starting this summer, and a new shopping center is slated to open for the 2014 holiday shopping season.