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Westfield’s Two Faces: Community Consequences of Tax Avoidance

Westfield’s Two Faces: Community Consequences of Tax Avoidance

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Westfield two faces Westfield two faces Document Transcript

  • Westfield’s Two Faces: Community Consequences of Tax Avoidance by United Voice
  • United Voice one of Australia’s largest unionsis a union of workers organising to win better jobs, stronger communities, a fairer society and a sustainable future. United Voice has issued this report after a broad and ongoing examination of Westfield’s global corporate social responsibility track record. United Voice believes that multi-national companies should have a positive impact in all of the communities in which they operate. Global trade unions, civil society groups and governments are increasingly focused on the issue of tax avoidance by multi-national companies. Given that Australia will chair the G20 in 2014 and that corporate tax avoidance is on the agenda, United Voice believes that it is crucial that Australian companies operating globally show leadership in paying their fair share of taxes. United Voice previously prepared a report on Westfield’s property tax avoidance in California and has commissioned a report on Westfield’s tax avoidance in the UK. United Voice is pleased to work with community and union partners in the US to encourage Westfield to genuinely support the communities in which it operates. Westfield must do better and pay its fair share. Published December 2013
  • Westfield’s Two Faces: Community Consequences of Tax Avoidance Contents Executive Summary...................................................................................................................................................4 US Property Taxes in Context.................................................................................................................................10 Is Aggressive Tax Avoidance Short-Changing US Communities?...........................................................................12 Westfield Appeals to Minimize its Property Tax Obligations.................................................................................16 . Westfield’s Impact on Los Angeles Schools............................................................................................................20 Sidebar: Westfield’s Give Back to School Campaign..............................................................................................21 The Impact of School Budget Cuts in Montgomery County..................................................................................22 Challenging Commercial Property Tax Abuse........................................................................................................24 Washington State....................................................................................................................................................26 Snapshot: Westfield in Washington....................................................................................................................26 Westfield Appeals to Increase its Profit Margins................................................................................................27 Connecticut.............................................................................................................................................................28 Snapshot: Westfield in Connecticut. ..................................................................................................................29 . Maryland.................................................................................................................................................................29 Snapshot: Westfield in Maryland........................................................................................................................30 Florida.....................................................................................................................................................................31 Snapshot: Westfield in Florida............................................................................................................................33 Reassessments in Florida....................................................................................................................................33 Illinois......................................................................................................................................................................34 Snapshot: Westfield in Illinois.............................................................................................................................34 Reassessments in Illinois.....................................................................................................................................35 Ohio........................................................................................................................................................................36 . Snapshot: Westfield in Ohio...............................................................................................................................37 California.................................................................................................................................................................38 Short-Changing Los Angeles..............................................................................................................................38 Short-Changing San Diego.................................................................................................................................38 Short-Changing San Jose...................................................................................................................................38 Snapshot: Westfield in California. ......................................................................................................................39 . Other States............................................................................................................................................................40 New Jersey.........................................................................................................................................................40 Indiana................................................................................................................................................................40 North Carolina....................................................................................................................................................40 Conclusion. .............................................................................................................................................................41 . Appendix: National Summary of Westfield’s Property Taxes. ................................................................................42 . Endnotes.................................................................................................................................................................46 3
  • Executive Summary This report examines how one multinational company, the Westfield Group, lowers its contribution to local communities in the United States by aggressively avoiding property taxes. The Westfield Group, a shopping mall company, provides a clear example of a broader problem of large corporations not paying their fair share of taxes. Local communities rely on property taxes to help fund local schools, public safety, parks, libraries and many other essential local services. However, some large corporations avoid paying their fair share, with dramatic consequences for local communities. The Westfield Group, based in Australia with properties in four countries, is one of the largest shopping mall owners and operators in the US. It is among the largest property taxpayers in many of the communities in which it operates. Nevertheless, an examination of 45 properties owned by Westfield indicates that the company has aggressively sought to lower the assessed values of its properties in order to pay less tax, while reporting much higher values to its shareholders. On average, Westfield pays tax on just 60% of the reported shareholder value of its US properties. While the appraised value – assigned by local taxing authorities – of all 45 properties is $10.5 billion, the shareholder-reported value of the portfolio is $17.4 billion. The total amount of property tax that Westfield annually avoids paying by these methods is $116.4 million.1 To truly understand the impact of this lost tax revenue, we have estimated that this unpaid tax could directly fund an additional 1,536 teachers across 41 school districts nationally – and many other local public services.2 Number of teachers that could be funded by the tax lost on Westfield properties State % of Tax Designated to Schools3 Starting Teacher Salary4 Number of Potential Teachers Washington $8.9 50% $36,474 122 Florida $12.3 45% $35,236 145 Ohio $14.2 50% $33,035 215 Illinois $11.6 67% $36,636 213 Maryland $5.6 51% $43,003 67 California $41.2 50% $41,131 501 Connecticut $1.2 50% $42,450 14 New Jersey $17.1 59% $48,101 209 Other $4.3 44% $32,177 50 NATIONAL TOTAL 4 Tax Loss ($m) $116.4 51% $38,694 1,536
  • In most states, appraised values are supposed to reflect current market values. In the states where that is not the case, adjustments have been made and the methodology is explained in more detail throughout the Report and in the endnotes. While it appears that Westfield’s aggressive appeals on appraised property values are the key driver in reducing tax revenue for local communities, there are other factors as well. A more comprehensive review of appeals filed by Westfield would likely show an even greater gap in values it claims than the gaps discussed in this report between appraised values and shareholder values. Additionally, some of Westfield’s tax bills may be reduced by property tax abatements and other properties may be subsidized by the diversion of property tax through tax increment financing (TIF) districts; both are economic development subsidies commonly given to large retail properties in the US. In some instances, local taxing authorities may not have done recent reassessments. While the national figures are startling, some individual examples demonstrate just how much localities are being short-changed. Westfield Belden Village in Canton, Ohio is currently assessed by the local county at $20.2 million, or just 10% of the 2012 reported shareholder value of $210.9 million. The difference between these two figures means that schools and other public services lose approximately $4.5 million annually.5 Westfield Hawthorn in Vernon Hills, Illinois is currently assessed at $59 million, or 32% of the 2012 reported shareholder value of $183 million. Public services lose an estimated $3.7 million in annual tax dollars.6 5
  • The largest amount of lost tax revenue, however, occurs in Paramus, New Jersey, where the Garden State Plaza is assessed at $670.8 million, or 40% of the 2012 reported shareholder value of $1,683 million. The estimated tax loss on this property is $17.1 million.7 The recent sale of seven Westfield properties to Starwood Capital Group in September 2013 indicates that Westfield’s shareholder-reported values are far more accurate in representing true market value than county-assessed values. Seven malls were sold for $1.64 billion, which was 93% of Westfield’s reported shareholder value. Since Westfield retained a 10% interest in all of these properties, the sale price was therefore slightly higher than the reported shareholder value.8 Property taxes are particularly important for the funding of local school districts; they are still the largest single source of revenue for local school budgets. Shortfalls in budgets are often felt through layoffs of teachers, hiring freezes, increased class sizes, and reductions in art, music and sports. Moreover, the capacity for schools to provide for the neediest students – those with intellectual or learning disabilities and those who require language support – can be severely affected.9 Traditionally companies have justified tax avoidance by citing an obligation to maximize shareholder returns. Increasingly, however, these arguments are falling short of investor expectations as tax avoidance is recognized as a serious reputational risk to companies like Westfield.10 Challenging property tax avoidance in the US is not merely the responsibility of shareholders or joint venture partners. Across the country, school boards and other local authorities are coming up with innovative ways to challenge property assessments. Recently, school districts in Pennsylvania have sought legal representation to help defend against large appeals by corporate property taxpayers.11 In Ohio, the Washington Local School District was successful in preventing the lowering of the assessment of Westfield’s Franklin Park Mall down from $256 million to $109 million.12 Reforms of the property tax system are also being proposed in states across the country to tackle abuse and fraud in the assessment of commercial properties.13 As school budgets are increasingly tightened and the gap between appraised and shareholder values widens, the imperative for local counties and school boards to take these actions grows. This report provides local communities with a summary of how Westfield has successfully avoided paying its fair share of property tax in twenty-seven counties across ten states. The information contained herein can be considered by school boards and other local authorities when responding to future budget shortfalls. Local communities deserve more. Westfield has two stories for all properties, but only one is true. 6
  • There are just so many domino effects that I think sometimes people are not aware of when budgets are not funded to their full capacity. So, I am asking my legislators to really consider and work very hard and on our behalf to restore the health of the fiscal budget and to maintain the effort that we’re supposed to have to educate our kids year by year. Eboni Walker Kindergarten Teacher Montgomery County, Maryland.14 7
  • National Summary State Number of Malls Shareholder Value ($m) Appraised Value ($m) % Taxed Tax Loss ($m) Washington $1,082.3 $462.0 43% $8.9 Florida 6 $1,234.1 $613.2 50% $12.3 Ohio 3 $673.5 $361.3 54% $14.2 Illinois 3 $932.6 $569.9 61% $11.6 Maryland 3 $1,469.1 $949.1 65% $5.6 California 21 $9,348.7 $6,146.0 66% $41.2 Connecticut 3 $689.3 $618.6 90% $1.2 New Jersey 1 $1,683.6 $670.8 Other 2 $320.3 $155.1 48% $4.3 NATIONAL TOTAL 8 3 45 $17,433.5 $10,546.0 60% $116.4 $17.1
  • Westfield’s US Portfolio The Westfield Group, with 21,856 retailers in 9.6 million square meters of retail space, owns and operates 99 malls in Australia, New Zealand, the United States and the United Kingdom, making it one of the world’s largest shopping center portfolios.15 Westfield (WDC) is headquartered in Sydney and is one of the largest companies listed on the Australian Securities Exchange. In 2012, Westfield malls had more than 1.1 billion customer visits which generated $39 billion in retail sales. Westfield valued its global property portfolio to shareholders at $63 billion.16 In 2012, Westfield made a net profit of $1.67 billion and was managing an $11.7 billion development pipeline of new projects.17 By most measures, the United States is the company’s largest and most important market. Fortyseven of the company’s malls are in the US (compared to 38 in Australia, the next largest market) and 54% of total gross leasable space is in the US.18 In the first half of 2013, the US market accounted for 42.4% of total net property income,19 and 46.5% of the value of the company’s development and construction projects in progress.20 Washington California Connecticut Illinois Indiana Ohio New Jersey Maryland North Carolina Florida 9
  • US Property Taxes in Context While there are significant variations from state to state on how property taxes are collected, it is generally the single most important source of revenue for local governments. Schools are usually the largest single expense for local governments, but local property taxes frequently pay for other social services, including police, fire, parks and libraries.21 In general, state law establishes the method of determining property tax assessments and rates. Tax rates are set by state and/or local authorities. County officials are responsible for actual assessments, collections and distribution of the pre-determined share of property taxes to other local government entities with taxing authority, including school districts.22 A county assessor or appraisal board determines the assessed value of all parcels of land, including any buildings or other improvements. An annual property tax bill is distributed to all property owners with the appropriate tax rates for the location of the property applied to the current assessed values. Typically, the assessed value should be the same as market value, and, in most states, property sale prices are used to set new assessed values. In most, if not all, jurisdictions, there is a process to contest assessed values. While the objective may be to ensure fairness, the outcome is often the opposite. In most places, average homeowners agree to pay their assessed rates and have neither the money nor time to effectively challenge assessments. On the other hand, many commercial property owners and wealthy homeowners systematically appeal assessed property values in order to lower their property tax payments.23 Additionally, some companies have been successful in securing economic development subsidies which diverts tax revenue to finance their operations.24 These tactics result in short-changing schools and other essential local government services and unfairly increasing the tax burden for average homeowners. Assessed values on commercial properties can be lowered by withholding critical information, providing false information, threatening legal action or providing ‘expert’ information from hired ‘tax agents’ that is difficult for a county assessor with a limited budget and a large case-load to challenge. This process is frequently subject to widespread abuse. Westfield appears to have a highly successful record of lowering the assessed values of its properties in the US with no apparent regard to the impact on funding for local schools and other public services. In the analysis below, an effort has been made to account for differences in methodologies for determining assessment of commercial property values in different localities and those different methodologies are explained in the text or endnotes. 10
  • Companies like Westfield often justify tax avoidance on the basis of their obligation to maximize returns to shareholders and investors by minimizing their tax burden. Nevertheless, a changing global investment environment is raising a serious challenge to this attitude, suggesting that corporate behemoths like Westfield could stand to lose shareholder support unless it meets its social obligations. A global poll conducted in April 2013 indicates that 85% of global citizens support the introduction of measures to prevent corporate tax avoidance by multinational corporations. The result was highest amongst citizens of the UK, 96% of whom supported taking action against multinational tax evasion.25 In August 2013, the world’s biggest investor, Norway’s Soverign Wealth Fund described tax evasion as one of their greatest concerns. The fund indicated that tackling tax evasion would become a focus area for them and form part of their investment choices in the future.26 Meanwhile, in September of this year, a top British law firm issued legal advice to leading British companies that they can no longer claim the right to avoid tax on the grounds of increasing shareholder returns.27 It is normal that there would be some difference in the fair value of investment properties as reported to shareholders and the assessed value determined by local tax assessors. However, in the case of Westfield the scale of that difference is stunning. Westfield states the following as its methodology to determine fair value: ‘Investment properties are carried at the Directors’ determination of fair value which take into account latest independent valuations, with updates at each balance date of independent valuations that were prepared previously. The carrying amount of investment properties comprises the original acquisition cost, subsequent capital expenditure, tenant allowances, deferred costs, ground leases, straight-line rent and revaluation increments and decrements. Independent valuations are conducted in accordance with … [the] Uniform Standards of Professional Appraisal Practice for the United States properties. The independent valuation uses capitalization of net income method and the discounting of future net cash flows to their present value method.’28 If Westfield denies the vast discrepancies between the fair value and the current assessed value of its US investment properties, then it should be willing to share the independent valuations, with any updates provided to local property tax assessors. 11
  • Is Aggressive Tax Avoidance Short-Changing US Communities? This report provides an in depth comparison between the taxed value of Westfield’s US properties and the value that it reports to shareholders. The comparison demonstrates that in the majority of cases, Westfield is avoiding paying its fair share in property tax. Property values are appraised at the local county or city level in order to calculate how much tax property owners are required to pay. Appraised values are meant to reflect the fair market value – or the price at which a property would be sold if it was put on the market today – and therefore we should expect to see relatively little difference between the value assessed by the local county assessor and the value Westfield reports to its shareholders. However, the appraisal process is also subject to appeals, and this report demonstrates that Westfield has been extremely successfully in negotiating property appraisals well below the fair market value of its properties according to its shareholder reports. The net result of this is that local communities miss out on much needed tax revenue. We have compared the assessed value to the reported shareholder value of 45 properties in Westfield’s US 2012 property portfolio.29 Our analysis shows that on average Westfield is only paying tax on 60% of the reported shareholder value. While the appraised value – determined by local taxing authorities – of the total US portfolio is $10.5 billion, the shareholder value of the portfolio is $17.4 billion. The total amount of property tax that Westfield avoids paying annually is $116.4 million. State Number of Malls Shareholder Value ($m) Appraised Value ($m) % Taxed Tax Loss ($m) Washington $1,082.3 $462.0 43% $8.9 Florida 6 $1,234.1 $613.2 50% $12.3 Ohio 3 $673.5 $361.3 54% $14.2 Illinois 3 $932.6 $569.9 61% $11.6 Maryland 3 $1,469.1 $949.1 65% $5.6 California 21 $9,348.7 $6,146.0 66% $41.2 Connecticut 3 $689.3 $618.6 90% $1.2 New Jersey 1 $1,683.6 $670.8 Other 2 $320.3 $155.1 48% $4.3 NATIONAL TOTAL 12 3 45 $17,433.5 $10,546.0 60% $116.4 $17.1
  • In the majority of cases examined, Westfield already ranks amongst the top ten taxpayers within each local taxing jurisdiction. This means that Westfield’s alleged tax avoidance has a major impact on the funding of schools and local communities. This report demonstrates that if Westfield paid tax according to the fair values reported within its shareholder reports, it would rank as the largest taxpayer in 9 local taxing jurisdictions and in the top three in 16 jurisdictions. Additionally, paying tax on its fair value would elevate some Westfield properties that aren’t even recorded amongst the top taxpayers in a particular county – notably in Illinois – to being the second largest taxpayer in those jurisdictions. Although Westfield’s actions may be legal, its evasion of its local responsibility to the communities in which it operates places a heavier burden on homeowners and small business to cover the costs of schools and local government services through higher tax rates. The problem has been particularly acute in recent years with declines in home values and significant funding shortfalls for schools and local governments due to the economic downturn. The tax revenue lost on all of Westfield’s properties would directly fund 1,536 teachers nationwide and still leave nearly $60 million for other essential local government services.30 The tax revenue lost The tax revenue lost on all of Westfield’s on all of Westfield’s properties would US properties would directly fund directly fund 1,536 teachers nationwide and and still leave still leave nearly nearly $60 million for other essential local government services 13
  • Number of teachers that could be funded by the tax lost on Westfield properties State % of Tax Designated to Schools31 Starting Teacher Salary32 Number of Potential Teachers Washington $8.9 50% $36,474 122 Florida $12.3 45% $35,236 145 Ohio $14.2 50% $33,035 215 Illinois $11.6 67% $36,636 213 Maryland $5.6 51% $43,003 67 California $41.2 50% $41,131 501 Connecticut $1.2 50% $42,450 14 New Jersey $17.1 59% $48,101 209 Other $4.3 44% $32,177 50 NATIONAL TOTAL 14 Tax Loss ($m) $116.4 51% $38,694 1,536
  • Extreme examples of differences between assessed and fair value: •• Westfield Belden Village in Canton, Ohio – assessed at $20.2 million, or 10% of the 2012 reported shareholder value of $210.9 million. •• Westfield Hawthorn in Vernon Hills, Illinois – assessed at $59 million, or 32% of the 2012 reported shareholder value of $183 million. •• Westfield Brandon in Brandon, Florida – assessed at $130.6 million, or 34% of the 2012 reported shareholder value of $388 million. •• Westfield Southcenter in Tukwila, Washington – assessed at $295 million, or 39% of the 2012 reported shareholder value of $754 million. •• Garden State Plaza in Paramus, New Jersey – assessed at $670.8 million, or 40% of the 2012 reported shareholder value of $1,683 million. The estimated tax loss on this property is $17.1 million. •• Westfield Franklin Park Mall, Lucas County, Ohio – the county’s second largest property taxpayer with an appraised value of $247.7 million33 which represents 78% of the $318.1 million fair value reported to shareholders.34 Despite this, the tax bills reveal that on three of the largest parcels in this property, the only tax Westfield paid was a contribution towards the Toledo Area Sanitary District Mosquito Control scheme. We can see from this that even though the county appraisal is relatively close to the fair value, Westfield is still shirking its tax responsibilities by nearly $6 million annually. Westfield’s three Connecticut-based properties provide an exception to this rule. Each of these properties is appraised at between 80% and 99% of their reported shareholder value, meaning that the property tax Westfield pays in Connecticut approximates its fair share. At the same time, all of these properties are registered as being the largest taxpayers in their respective jurisdictions, reflecting how much Westfield can contribute to communities when it pays its fair share. Westfield has also benefitted from Tax Increment Financing agreements and sales tax rebates, amongst other public subsidies. For instance, in June 2013, the Los Angeles City Council voted to allow Westfield to keep up to $59 million in tax over the next 25 years as an incentive to help them fund renovations and the construction of a new hotel at their Westfield Topanga site.35 Westfield proudly boasts that this mall will provide the City of Los Angeles with $9.7 million in tax revenue each year.36 However, this figure is already $3.5 million short of the fair share the company should be paying, excluding the tax break the city voted on earlier this year and not taking into account the increased value of the property as a result of the company’s renovations. Also in June 2013, Westfield received a tax rebate of up to $13 million from the City of Vernon Hills to ‘defray the costs’ of a $50 million renovation of its Westfield Hawthorn Mall.37 The company is also known to have brokered similar deals in Ohio and Missouri.38 15
  • Westfield Appeals to Minimize its Property Tax Obligations The appraised value of commercial properties is often the result of a negotiated appeals process. Data collected for this report indicates that Westfield has been very successful in appealing its property appraisals at the local level. This has taken place at the same time that the overall fair value of its US portfolio has increased, meaning that the gap between the fair value and the taxed value grows every year, resulting in increasing lost revenue for local counties. The Global Financial Crisis (GFC) impacted significantly on property prices across the US and could have provided both local counties and commercial property owners with a realistic reason to lower the assessed values of local properties. While the full history of Westfield’s appeals to the assessed values of its properties is as yet unknown, we can assume that the impact of the GFC on local markets would have been part of its arguments when appealing for a lowering of its property values. When we examine the impact of the GFC on Westfield’s US portfolio according to Westfield’s annual reports, we see that the overall value of the portfolio did fall by 5% between 2008 and 2009. Despite this, over the ensuing years, the value of the portfolio not only recovered very quickly but currently outstrips 2008 values by 12%. As such, it appears that the GFC had a minimal impact on Westfield’s property values. US Portfolio Total Value ($m) 2008-2012 $14,000.0 US Portfolio Growth 2009-2012 10% $13,500.0 6% 6% $13,000.0 4% $12,500.0 0% $11,500.0 -2% 2% 2% $12,000.0 2009 -4% $11,000.0 2008 2009 2010 2011 2012 16 8% 8% -6% -5% 2010 2011 2012
  • Despite this picture of Westfield’s robust recovery in the midst of a global recession, historical data collected from seven US properties39 indicates that while Westfield’s reported shareholder values continued to rise, overall appraised values continued to fall: Combined Fair Value ($m) of Combined Properties 2009-2012 Seven WestfieldFair Value ($m) of Seven Westfield Properties 2009-2012 2400 Combined Appraised Value ($m) of Seven Westfield Properties 2009-2012 1170 1160 2400 2300 1150 2300 2200 1140 2200 2100 1130 1120 2100 2000 1110 2000 1900 1900 2009 2010 2011 2009 2010 2011 2012 2009 1100 2010 2011 2012 2012 Moreover, when we compare the difference between reported shareholder values and appraised values over time for these seven properties we find that the overall difference between the two has increased over the same period. For the sample as a whole, appraised values were 62% of fair value in 2009, compared to 53% in 2012. Difference between Shareholder and Appraised Values ($m) 2009-2012 1300 64% 1200 1100 62% 1000 60% 900 58% 800 Difference between appraised value and fair value ($m) Appraised value as a percentage of fair value 56% 700 54% 600 52% 500 2009 2010 2011 2012 17
  • Some individual case studies help to demonstrate exactly how Westfield has managed to achieve these results: Between 2010 and 2012, Westfield was successful in negotiating a decreased assessment on its Franklin Park Mall in Lucas County, Ohio in the order of $2.8 million.40 The Washington Local School District revealed that this had been a negotiated settlement after Westfield had appealed over and over again between 2007 and 2009 to have the property reassessed down from $256 million to just $109 million – a reduction of more than half the county’s assessed value.41 Westfield had previously been granted the right to a tax exemption for the years 2006 and 2007 while the Franklin Park Mall underwent major expansion. It is clear from Washington Local School District budgeting documents that the behavior of Westfield in appealing and balking at paying its fair share of property taxes has a significant impact on the school district’s budget. As the school district argued in May 2010, ‘If [Westfield] are successful in their request to reduce their property values … this would have a significant negative impact on our annual revenue and cash balances.’42 18 In relation to the Westfield Wheaton Mall in Wheaton, Maryland, Al Carr, an elected state delegate for the area, has confirmed that ‘Westfield has been very aggressive about appealing the assessed value of its property as a way to lower its property tax burden. On the six properties that comprise the [Wheaton] mall, Westfield filed appeals 20 times out of 30 annual appeal opportunities over the last five years.’43 Westfield’s strategy has served them well. Historical data collected from county tax records indicates that Westfield successfully managed to have the value of its property reassessed down by $10 million in 2009.44 The same tactics worked for Westfield with its Montgomery Mall, located in Bethesda, just outside of Washington, DC. In 2011, Westfield successfully appealed to have its assessment reduced by $67.3 million, bringing its total assessment down to $296.2 million.45 Historical data collected on two of Westfield’s properties in Washington State indicates that the company has aggressively appealed the appraised values of its properties while at the same time increasing its reported fair value.46 This means that the gap between the appraised and fair value of each property has climbed dramatically over the past four years. The outcome of this is that every year public schools and local governments lose more and more tax revenue, while Westfield continues to increase its profitability.
  • Difference between Appraised Value (AV) and Fair Market Value (FV) in Washington State, 2009-2012 2009 2012 Difference ($m) 334.7 398.9 446.5 459.1 49% 43% 40% 39% Difference ($m) 38.8 53.6 62 92.1 AV as % of FV Capital 2011 AV as % of FV Southcenter 2010 76% 67% 61% 51% In some instances where Westfield has not been successful in appealing the appraised value of its properties, the shareholder value has nonetheless continued to grow at a faster rate, outstripping the growth in the appraised value. Historical data collected for Westfield Fox Valley and Westfield Old Orchard reveals that, in spite of a $19.1 million decrease in the value of Westfield Old Orchard between 2009 and 2010, on the whole property assessments in Illinois have been rising. Yet, despite this, the difference between the fair value and the assessed value has grown over the last three to four years. In 2009, the assessed value of Fox Valley was 58% of the fair value, while in 2012 the assessed value is now just 47% of the fair value. In the same period, the assessed value rose by $31.2 million.47 For Old Orchard, the assessed value decreased from 39% of fair value in 2010 to 32% of fair value in 2012, even though the valuation of the property increased by $57.7 million in the same period.48 Similar data collected for Westfield Countryside in Clearwater, Florida shows that the valuation of this property has increased considerably from $48.1 million in 2009 to $97.5 million in 2012. Yet, despite this, the difference between the fair value and the assessed value has grown over the same period. In 2009, the assessed value was 72% of the fair value, while in 2012 the assessed value is now just 52% of the fair value.49 This means that Westfield has continued to increase the amount reported to shareholders at a much higher rate than the rate assessed by the county. The net effect of this is that local counties miss out on an ever greater share of tax. 19
  • Westfield’s Impact on Los Angeles Schools The Los Angeles Unified School District (LA USD), with over 664,000 K-12 students,50 is by far the largest school district in the Los Angeles area. Furthermore, the LA USD is the largest school district in California and the second largest in the nation.51 A recent national survey ranked California 47th of the 50 states in adjusted per pupil funding.52 Adjusted per pupil expenditures were $8,667, compared to a national average of $11,665.53 However, conditions in the LA USD are even more troubling than statewide. The district faces additional challenges as 25% of students are learning English as a second language and 76% of students qualify for special funding under federal poverty guidelines.54 The LA USD has faced budget cuts every year for the last 5 years.55 This past school year (201213), all LA USD employees agreed to take 10 furlough days.56 However, nearly 5,000 district employees still lost their jobs.57 This is on the back of 8,000 jobs lost in the prior 4 years.58 California has the worst student/teacher ratio of any state.59 The state average in 2010 was 23.6 students per teacher in public K-12 schools.60 The US average was 15.6 students per teacher.61 The LA USD Board approved staffing ratios for ‘normal’ schools in the current school year are 29.5 students per teacher for Kindergarten, 32 for grades 1-3 and 39 students per teacher for grades 4-6.62 Westfield has four shopping malls whose property taxes help fund the district’s operations.63 The total annual estimated tax loss on the four properties is $10.2 million.64 This does not include the value of the 30 acre site that Westfield controls and is developing to connect the Topanga and Promenade Malls. School funding in California is both complex and problematic; however, it is safe to assume that at least 50% of local property tax revenues are used to support public schools.65 If Westfield paid taxes on the full reported value of these 4 properties, the LA USD would have an estimated $5.1 million that could pay the salary of 123 desperately needed new teachers or prevent layoffs.66 If $20.6 million – 50% of the estimated lost property tax revenue from all of Westfield’s California properties – went to hire new teachers, it could pay the salaries of 501 teachers.67 20
  • Westfield’s Give Back to School Campaign While Westfield in 2012 has successfully avoided paying more than $60 million in property taxes that directly fund schools, it is proud to highlight its ‘Give Back to School’ National Campaign in the US as a social and community case study in its 2012 Sustainability Report. In 2011, the program ran in 23 malls in eight states. ‘Local shoppers participated in the program by donating clothes and school supplies through their local shopping centre – and Westfield donated US$2,500 to one school in each of the participating markets for a total of US$57,500.’ 68 69 70 Westfield’s ‘Give Back to School’ National campaign expenditure Westfield’s unpaid taxes for schools $57,500 $60,000,000 21
  • The Impact of School Budget Cuts in Montgomery County Funding cuts have been a major issue for schools across Maryland for some years now. Over the past decade, the amount of county revenue allocated to Montgomery County public schools fell by 10% from 52.5% in 2002 to 42.5% in 2012.71 This has meant that county funding for public schools in Montgomery County fell below the legally required minimum by 8.5% in 2012.72 Declining expenditure by local counties in Maryland has follow-on consequences. Under state law, if counties do not meet their required minimum, school districts also lose out on additional state funding. In recent years, the implications of this have been felt across schools in Maryland through increased layoffs, hiring freezes, increased class sizes, and reductions in budgets for teacher professional development, school programs and school supplies.73 In Montgomery County, teachers have spoken openly about how these funding cuts have impacted them. The decline in the number of teachers and instructional assistants available per student has the greatest impacts on students with special needs, including those with learning disabilities, those who come from low socio-economic backgrounds, and those in need of additional language support. 22 The cuts with teachers and the cuts with para-educators mean that students who really need very specific and intensive learning … they receive less of it. It has to be spread across the day [with] more students, less hands. Tricia Skelly Pre-school & Special education – Stephen Knolls School74 If we are not going to give assistance to those who need it most, then who are we giving assistance to? Where is the money going? And how are we supposed to be able to look at ourselves in the mirror as a society, collectively, if the amount of money that we are giving to the neediest people in our society is not being adequately maintained? Joshua Ruben Einstein High School75
  • One Montgomery County teacher highlighted the safety implications of job cuts. At her school, two teachers were required to maintain control of up to 130 kindergarten students during recess.76 Another teacher noted that a loss of financial support for vocational training programs meant that many high school aged kids were unable to attend programs that would train them for a career after high school because they could not afford to provide their own tools and equipment.77 In Montgomery County alone, Westfield avoids paying $3.3 million in property taxes. This money could easily fund an additional 38 new teachers across the county. Such an injection of finances would thus help to ameliorate some of the effects of declining budgets, by helping the county to meet its financial obligations to local schools. There are just so many domino effects that I think sometimes people are not aware of when budgets are not funded to their full capacity. So, I am asking my legislators to really consider and work very hard and on our behalf to restore the health of the fiscal budget and to maintain the effort that we’re supposed to have to educate our kids year by year. Eboni Walker Kindergarten – Sargent Shriver Elementary School 78 23
  • Challenging Commercial Property Tax Abuse Westfield is not the only commercial property owner abusing the property tax appeal process at the expense of schools and communities. The problem is widespread. A recent investigation by the New York County District Attorney found evidence of common fraud in the way that property owners in New York City were reporting their property value to the county assessor. As a result of this investigation, one property owner in particular was forced to pay ‘$240,000 in back taxes as part of an agreement settling the matter.’79 As a result of this investigation, a Grand Jury ‘issued a report examining the filing of false documents and information with New York City in connection with the computation of real property tax liability, and calling for legislative, executive, and administrative reforms to protect the integrity of the tax system and maximize tax receipts lawfully due to the City.’80 The report found that ‘current laws, regulations, and systems are not adequate to prevent and deter costly false filings, which occur with unacceptable frequency.’ 81 Although the issue of property tax evasion is widespread, Westfield appears to have been highly effective in influencing local assessment decisions. Due to the large scale and high value of its properties the local impacts are substantial. As already noted, the tax revenue lost from Westfield properties could easily fund an additional 1,536 teachers across forty-one school districts. In addition to this, however, a further $57 million would be made available for much needed public services such as fire stations, hospitals, local libraries and parks. Communities thus have a great incentive to ensure that companies like Westfield pay their fair share. We note here a number of precedents from elsewhere in the country which may prove useful for communities in considering how to do this. When companies disclose property values to 24 shareholders or investors, that information should be used by local authorities to determine the assessed property values. A recent case involving a major US competitor of Westfield provides an interesting precedent which could help communities shift the assessment levels of major commercial properties. In 2011, General Growth Properties sued Johnson County in Iowa in an attempt to prevent the county from raising the assessed value of the shopping mall from $81.9 million to $125 million.82 Importantly, the county’s increased assessment was based on two factors, a 2011 annual report to shareholders that valued the property at $154.9 million, and the mall owner’s purchase of ‘the Sears space in the mall, paying $15 million for a property assessed at $5.7 million.’83 The outcome of the case is not yet known. The county assessor claimed that the new assessment was fair and said, ‘if anything it’s conservative, especially if you look at what they valued it at.’84 In communities throughout the US, local authorities – especially school boards – recognize the problems with commercial property tax assessments and are directly challenging property assessment appeals and winning. Reforms of the property tax system are being proposed in states across the country to tackle abuse and fraud in the assessment of commercial properties. In response to the aforementioned investigation in New York City, the NYC Department of Finance Commissioner David M. Frankel commented that his office would, ‘work with the State and City legislatures to ensure appropriate reforms are enacted and that property owners face real penalties for filing fraudulent documents with the City. The vast majority of New Yorkers do the right thing, but the fraudulent conduct cited in the Grand Jury report results in higher taxes and less services for the rest of us. This is not acceptable.’85
  • Additionally, in a number of states, school boards are directly challenging assessed values on large commercial properties to restore funding for schools. In Ohio, the Washington Local School District ‘vehemently’ contested Westfield’s appeals to lower the assessment of its Franklin Park Mall down from $256 million to $109 million, which seriously threatened the revenue of local schools. The intervention by the Washington Local School District resulted in a negotiated settlement, which still saw a decline in the value of the mall but by a much smaller amount than Westfield was proposing.86 Also in Ohio, after successful challenges by school boards, many commercial property owners are negotiating deals directly with school districts to make payments in lieu of taxes.87 Columbus schools provide one such example. ‘In just the past year [2011], 10 of the 14 cases settled by the Columbus schools involved the district’s receiving a direct payment in lieu of taxes, mostly from businesses fighting for a lower tax appraisal. The 10 payments totaled $837,000. In essence, the district was able to extract the money because it had strong evidence - usually a recent sale price - that the property owner was paying too little. The property owner, on the other hand, settled the case by paying the district what it was owed and pocketing what would have been paid to the other taxing bodies.’88 For the most part, the official appeals process offered by local assessors is only open to appeals originating from the owner of the property. A recent series of cases from Pennsylvania offers one serious challenge to this rule. School districts in Pennsylvania have been contracting realty firms to help defend against the appeals of large corporate property tax payers within their communities. In July 2012, the Bethlehem Area School Board ‘voted 8-1 ... to file “reverse appeals” against 50 properties in Northampton County the district believes are under-valued.’89 The effort is ‘an attempt to increase tax income $1.5 million to $2 million.’ 90 The school superintendent said that the ‘goal here is simple – that the citizens of the district feel confident that all property owners pay their fair share.’91 The Bethlehem Area School Board relied on advice provided to them from a realty firm which did the research and filed the reverse appeals on their behalf, in exchange for a percentage of the recovered revenues. The school district’s attorney reportedly said that the ‘courts have given school districts and other government entities the same rights as property owners to file annual assessment appeals when they think a property is over- or undervalued.’92 At least nine other Pennsylvania school districts have contracts with the same realty firm to pursue local properties that are grossly undervalued.93 Many others school districts are taking similar approaches by targeting under-assessed commercial properties with reverse appeals. There is a real imperative behind the actions of these school districts in Pennsylvania. The city of Philadelphia has announced a $218 million budget shortfall which will significantly impact local schools. Large rallies of teachers, students, parents, unions and community leaders took place in the city in March 2013 to protest major cuts to school budgets which will result in teacher pay cuts and large class sizes. One of the main avenues for the city and its community to make up this shortfall is through raising commercial property assessments.94 The right for Pennsylvania school districts to participate in the assessment process was upheld by the Pennsylvania Commonwealth Court in March 2013. The ruling confirmed that ‘that the School District’s participation in a process to systematically evaluate different classes of property on an annual basis did not offend uniformity or equal protection precepts.’ Furthermore, ‘the property owner’s under-assessment, which was not contested and through which it pays comparatively less of the cost of local government, does not enjoy constitutional protection from a school district’s appeal.’95 This ruling provides an excellent precedent. The activities of school boards in Pennsylvania provide a model of action for other states to follow. More importantly, however, they also demonstrate that the situation of corporations aggressively lowering property taxes is a common problem. While Westfield’s actions have a significant impact on the communities in which it operates, Westfield is an example of a wider problem. Nonetheless, organized community responses to Westfield’s tax avoidance strategies could provide a model for communities across the country and set an example for other commercial property owners. 25
  • Washington State Westfield’s three malls in Washington State demonstrate the company’s aggressive methods of lowering its assessed values with harmful impacts on funding for schools and local governments. In Washington State, state law requires that county assessors appraise a property at 100% of its true and fair market value, according to the highest and best use of the property. Sales, in combination with the income and cost approaches, are used by county assessors to value commercial property.96 The 2012 financial reports for the City of Olympia and the County of Thurston reveal that Westfield Capital Mall (“Westfield/Capital Mall”) is the largest property taxpayer in the city and the fourth largest in the county. Westfield’s property comprised 1.9% of the total assessed value of all properties in Olympia in 2012.97 At the end of 2012, the fair value on this property reported to Westfield shareholders was $187.3 million.98 By comparison, the assessed value was just $95.2 million, or 51% of the fair value reported to shareholders.99 If this property was assessed at its fair value, Westfield would become the third largest taxpayer and the largest non-utility taxpayer in the entire County of Thurston. The estimated annual loss in tax revenue is $1.2 million.100 26 The Westfield Vancouver Mall – near Portland, Oregon – has a 2012 appraised value of $71.8 million.101 Westfield is the City of Vancouver’s third largest property taxpayer and ranks ninth amongst property taxpayers within Clark County.102 The appraised value is 51% of the 2012 fair value of $141 million, as reported to shareholders.103 That suggests that Westfield may be paying taxes on barely half the market value of this property, resulting in an estimated annual tax revenue loss of $1.2 million.104 If Westfield paid its fair share, the company would become the fourth largest property taxpayer in the county. Lastly, the Westfield Southcenter Mall (“WEA Southcenter LLC”) in the city of Tukwila – near Seattle – is Tukwila’s second largest property taxpayer with an assessed value of $295 million and accounts for 6.4% of the city’s total assessed value. In July 2008, Westfield completed a $240 million expansion and renovation of the property.105 The current appraised value is just 39% of the 2012 reported shareholder value of $754 million.106 The estimated annual loss in tax revenue is a staggering $6.5 million.107
  • Snapshot: Westfield in Washington Westfield Capital Mall Westfield Vancouver Mall Westfield Southcenter Mall Appraised Value ($m) 95.2 71.8 295.0 Reported Value ($m) 187.3 141.0 754.0 Taxed Percent 51% 51% 39% Difference ($m) 92.1 69.2 459.0 Tax Loss ($m) 1.2 1.2 6.5 Westfield Appeals to Increase its Profit Margins Historical data collected on two of Westfield’s properties in Washington State indicates that the company has aggressively appealed the appraised values of its properties while at the same time increasing its reported fair value.108 This means that the gap between the appraised and fair value of each property has climbed dramatically over the past four years. The outcome of this is that every year public schools and local governments lose more and more tax revenue, while Westfield continues to increase its profitability. Difference Between Appraised Value and Fair Value 2009-2012 2009 2012 $m 334.7 398.9 446.5 459.1 49% 43% 40% 39% $m 38.8 53.6 62 92.1 % Capital 2011 % Southcenter 2010 76% 67% 61% 51% Number of additional teachers in Washington that could be funded if Westfield paid its fair share: 122 $4.5 million for additional services 27
  • Connecticut Westfield owns three malls in the state of Connecticut. By comparison to other states, these three properties are appraised closer to their fair value. In Connecticut, property tax is paid on 70% of the appraised value, which is equivalent to the ‘fair value’ or ‘market value’ of the property. The tax portion is known as the ‘assessed value’.109 Of the three Westfield properties in Connecticut, the appraised value is equal to between 80% and 99% of the fair value Westfield reports to shareholders as follows:110 Difference Between City Appraised Value and Shareholder Fair Value ($m) 2009-2012 City Appraised Value Shareholder Fair Value % Difference Connecticut Post $190.4 $236.8 80% Meriden $115.9 $135.7 85% Trumbull $312.3 $316.8 99% Westfield is currently ranked as the largest taxpayer in all three Connecticut cities of Meriden, Milford and Trumbull. If its property was assessed at fair value, the City of Milford would raise an additional $900,000 annually,111 and the City of Meriden would raise an additional $200,000 annually.112 With the Trumbull property currently assessed at 99% of the reported shareholder value, it is no surprise that Westfield ranks first in the list of taxpayers for the City of Trumbull. In this city it contributed 4.89% of the City’s Net Taxable Grand List, which demonstrates exactly how much the company can contribute to a city when it is paying its fair share.113 28
  • Snapshot: Westfield in Connecticut Connecticut Post Westfield Meriden Westfield Trumbull Appraised Value ($m) 190.4 115.9 312.3 Reported Value ($m) 236.8 135.7 316.8 Taxed Percent 80% 85% 99% Difference ($m) 46.4 19.8 4.5 Tax Loss ($m) 0.9 0.2 0.1 Number of additional teachers in Number of additional teachers in Connecticut that could be funded Connecticut that could be funded if Westfield paid its fair share: if Westfield paid its fair share: 14 $600,000.00 $600,000 $600,000.00 for additional services for additional services 29
  • Maryland Westfield has interests in three malls in the state of Maryland and has invested millions of dollars in renovations. In relation to Westfield Wheaton, Al Carr, an elected state delegate for the area, has confirmed that ‘Westfield has been very aggressive about appealing the assessed value of their property as a way to lower their property tax burden. On the six properties that comprise the [Wheaton] mall, Westfield filed appeals 20 times out of 30 annual appeal opportunities over the last five years.’114 Westfield’s strategy has served them well. Historical data collected from county tax records indicates that Westfield successfully managed to have the value of its property reassessed down by $10 million in 2009.115 The 2012 appraised value for Westfield Wheaton is $174.1 million, while Westfield reports the value of this property to its shareholders as $271.5 million. Westfield is thus only paying tax on 64% of the fair value of its property. The estimated annual tax revenue loss is $1.1 million.116 The same tactics worked for Westfield with its Montgomery Mall, located in Bethesda, just outside of Washington, DC. In 2011, Westfield successfully appealed to have its assessment reduced by $67.3 million, bringing the total assessment down to $296.2 million.117 By comparison, the value reported to Westfield shareholders in 2012 was $497.4 million, making the mall’s appraised value just 60% of the reported fair value.118 The difference in reported shareholder value and assessed value represents an estimated annual tax revenue loss of $2.2 million.119 In January 2011, a 50% interest in this mall was sold for $232.5 million, which would place the real value much closer to the shareholder value than to the county appraised value.120 Westfield’s combined properties in Montgomery County currently rank the company as the third largest taxpayer in the county, after two utility companies. If these two malls were assessed at their fair value, Westfield would be the largest taxpayer in the county, ahead of both utility companies. The potential tax revenue for the county is an additional $3.3 million annually.121 30
  • In Anne Arundel County, Westfield Annapolis Mall is currently registered as the third largest contributing taxpayer in the county.122 A review of land records for the mall shows a 2012 assessed value of $477.8 million,123 while the most recent value of the property reported to shareholders is $700.2 million.124 Taking these numbers at face value, the assessed value is only 68% of the fair value as reported to shareholders. This suggests that Westfield is not paying an estimated $2.3 million in annual property taxes.125 If Annapolis Mall was assessed at fair value, Westfield would be the largest taxpayer in the county, ahead of even the utility companies.126 Snapshot: Westfield in Maryland Westfield Wheaton Westfield Montgomery Westfield Annapolis Appraised Value ($m) 175.1 296.2 477.8 Reported Value ($m) $271.5 $497.4 700.2 Taxed Percent 60% 64% 68% Difference ($m) 96.4 201.2 222.4 Tax Loss ($m) 1.1 2.2 2.3 Number of additional teachers in Maryland that could be funded if Westfield paid its fair share: 67 $2.7 MILLION million for additional services 31
  • Florida Westfield currently owns six properties in Florida. All of these properties are assessed well below the fair value reported by Westfield to its shareholders. The biggest difference between the assessed value and the reported shareholder value is at Westfield Brandon, where the assessed value according to the county is just $130.6 million.127 This is barely 34% of the $388 million that Westfield reports as the property’s fair value.128 Located in the same county, the appraised value of Westfield Citrus Park is $112 million, or just 51% of the fair value of $221 million.129 The consequence of the undervaluing of these two properties is that Hillsborough County annually loses an estimated $7.5 million in tax revenue.130 Westfield currently ranks as the sixth largest tax-payer in Hillsborough County. If these two properties were assessed at their fair value, it would become the top non-utility taxpayer and the third largest overall in the county.131 Summary for Hillsborough County Appraised Value ($m) Fair Value ($m) Tax Paid ($m) Tax Loss ($m) Brandon $130.6 $388.0 $2.7 $5.2 Citrus Park $112.0 $221.0 $2.3 $2.2 COUNTY TOTAL $242.6 $609.0 $5.0 $7.4 This picture is repeated elsewhere in the state of Florida. Westfield owns two malls in the county of Sarasota, where Westfield is also currently ranked as the third largest contributing tax-payer and the top non-utility taxpayer. Westfield Southgate has an assessed value of $53.8 million, worth just 49% of the property’s reported fair value of $109 million.132 Westfield Sarasota has an assessed value of $84.2 million, which is 67% of the reported fair value of $125 million.133 If these two properties were assessed at their fair value, Westfield would be the county’s second highest overall taxpayer and the top non-utility taxpayer.134 The total potential tax revenue for the county is $1.5m.135 Summary for Sarasota County Appraised Value ($m) Fair Value ($m) Tax Paid ($m) Tax Loss ($m) Sarasota $84.2 $125.0 $1.1 $0.6 Southgate $53.8 $109.0 $0.9 $0.9 $138.4 $234.0 $2.0 $1.5 COUNTY TOTAL 32
  • Broward Mall LLC and Westfield Countryside are assessed at 62% and 58% of the reported shareholder values respectively. Broward Mall is currently assessed at $98.4 million compared to the shareholder value of $159.4 million.136 Westfield Countryside is currently assessed at $134.2 million compared to the shareholder value of $231.7 million.137 Countryside Mall is currently assessed as the fifth largest taxpayer in Pinellas County. If this property was assessed at its fair value, Westfield would be the third highest overall and top non-utility taxpayer in the county.138 The potential tax revenue for Pinellas County is $2.1 million.139 Broward Mall LLC currently does not figure in the list of principal taxpayers for Broward County. However, if the property was assessed at its fair value, it would rank sixth of all taxpayers in the county.140 The potential tax revenue for the Broward County is $1.3 million.141 Snapshot: Westfield in Florida Westfield Brandon Westfield Citrus Park Westfield Sarasota Westfield Southgate Westfield Countryside Westfield Broward Appraised Value ($m) 130.6 112.0 84.2 53.8 134.2 98.4 Reported Value ($m) 388.0 221.0 125.0 109.0 231.7 159.4 Taxed Percent 34% 51% 67% 49% 58% 62% Difference ($m) 109.0 40.8 55.2 97.5 61.0 2.2 0.6 0.9 2.1 1.3 257.4 Tax Loss ($m) 5.2 Reassessments in Florida Historical data collected on Westfield Sarasota indicates that the company has been successful in appealing the assessment of this property downwards in recent years. Between 2011 and 2012, the assessed value of this property fell by $6 million.142 By comparison, historical data from Westfield Countryside shows that the valuation of this property has increased considerably from $48.1 million in 2009 to $97.5 million in 2012. Yet, despite this, the difference between the fair value and the assessed value has grown over the same period. In 2009, the assessed value was 72% of the fair value, while in 2012 the assessed value is now just 52% of the fair value.143 This means that Westfield has continued to increase the amount reported to shareholders at a much higher rate than the rate assessed by the county. The net effect of this is that the county of Pinellas is still missing out on its fair share of tax revenue from Westfield. Number of additional teachers in Florida that could be funded if Westfield paid its fair share: 145 $6.8 million for additional services 33
  • Illinois Westfield owns three properties in Illinois, one each in Lake County, Du Page County and Cook County. According to Illinois state regulations, all properties are assessed at 33.3% of their market value, except in Cook County when they are assessed at 38% of market value. For the purpose of this report, property assessments have been re-calculated to 100% of market value in order to find the difference between the assessed value and the reported shareholder value, however the tax rate has been applied to the relevant percentage of the shareholder value to find the difference in tax revenue. Westfield Hawthorn has an appraised market value of $59 million, which is just 32% of the fair value reported to Westfield shareholders of $183 million.144 Westfield currently doesn’t appear on the list of top taxpayers in Lake County, Illinois. If its property were assessed at its fair value, it would be the second largest taxpayer in the county.145 The potential tax revenue for the county is an additional $3.7 million annually.146 Westfield Fox Valley has an appraised market value of $98 million, which is 47% of the fair value reported to Westfield shareholders of $208.5 million.147 Westfield currently doesn’t appear on the list of top taxpayers in Du Page County, Illinois. If its property were assessed at its fair value, it would be the fifth largest taxpayer in the county.148 The potential tax revenue for the county is an additional $3.5 million annually.149 Westfield Old Orchard has an appraised market value of $412.9 million, which is 76% of the fair value reported to Westfield shareholders of $541.1 million.150 Westfield currently doesn’t appear on the list of top taxpayers in Cook County, Illinois. If its property were assessed at its fair value, it would be the fifth largest taxpayer in the county.151 The potential tax revenue for the county is an additional $4.4 million annually.152 34
  • Snapshot: Westfield in Illinois Westfield Fox Valley Westfield Hawthorn Westfield Old Orchard Appraised Value ($m) 98.0 59.0 412.9 Reported Value ($m) 208.5 183.0 541.1 Taxed Percent 47% 32% 76% Difference ($m) 110.5 124.0 128.2 Tax Loss ($m) 3.5 3.7 4.4 Reassessments in Illinois Historical data collected for Westfield Fox Valley and Westfield Old Orchard reveals that, in spite of a $19.1 million decrease in the value of Westfield Old Orchard between 2009 and 2010, on the whole property assessments in Illinois have been rising. Yet, despite this, the difference between the fair value and the assessed value has grown over the last three to four years. In 2009, the assessed value of Fox Valley was 58% of the fair value, while in 2012 the assessed value is now just 47% of the fair value. In the same period, the assessed value rose by $31.2 million.153 For Old Orchard, the assessed value decreased from 39% of fair value in 2010 to 32% of fair value in 2012, even though the valuation of the property increased by $57.7 million in the same period.154 These figures indicate that Westfield has continued to increase the values reported to shareholders at a much higher rate than increases in county assessments. Number of additional teachers in Illinois that could be funded if Westfield paid its fair share: 213 $3.8 million for additional services 35
  • Ohio In 2012, Westfield maintained a 100% interest in three malls in the state of Ohio. According to Ohio state regulations, property tax is paid on 35% of total appraised value. For the purpose of this report, the tax rate has been applied to 35% of the reported shareholder value to find the difference in tax revenue. The Westfield Belden Mall in Stark County presents an interesting case study. The current county valuation on this property appears to be just 10% of the reported shareholder value. The county assesses the property as being worth just $20.2 million.155 By contrast, Westfield reports the value of this property as being $210.9 million.156 The difference between these two figures is so stark that it is almost unbelievable; however the figures are corroborated by county bond records.157 The estimated amount of tax that the county is losing on this property every year is a staggering $4.5 million.158 Additionally, county records indicate that Westfield successfully appealed the valuation of this property down from $24.6 million in 2010 to the current value of $20.2 million. In the same period, the reported shareholder value of this property grew by $34.4 million. The Westfield Great Northern Mall, located in Cuyahoga County, has an appraised market value of $93.4 million,159 which represents 65% of the fair value reported to shareholders, which was $144.5 million in 2012.160 The difference in reported fair value and assessed value represents an estimated annual tax revenue loss of $1.7 million.161 Currently, the Great Northern Partnership, a Westfield subsidiary, which owns this mall, is ranked fifteenth in the list of largest property taxpayers in the Cuyahoga County. If Westfield paid tax on the fair value of this property, it would be ranked as the seventh largest taxpayer in the county.162 In Lucas County, the Westfield Franklin Park Mall is the county’s second largest property taxpayer. The mall has an appraised value of $247.7 million,163 which represents 78% of the $318.1 million reported to shareholders in 2012.164 Despite this, the tax bills reveal that on three of the largest parcels in this property, the only tax Westfield paid was a contribution towards the Toledo Area Sanitary District Mosquito Control scheme. We can see from this that even though the county appraisal is relatively close to the fair value, Westfield is still shirking its tax responsibilities on these three parcels by nearly $6 million annually as follows165: Westfield Franklin Park Mall Parcels Parcel Total Value Tax owed on Total Value Tax Paid Difference 2374254 $99,585,500.00 $2,987,067.07 $9,236.56 $2,977,830.51 2374256 $88,857,600.00 $2,665,283.71 $8,241.56 $2,657,042.15 2265158 $6,632,000.00 $198,926.84 $615.12 $198,311.72 TOTAL UNPAID TAX 36 $5,833,184.38
  • Taking into account this loss of tax revenue combined with the difference between the assessed value and the appraised value, the county is currently suffering an estimated annual loss in tax revenue of $8.0 million.166 In addition to this, Westfield successfully negotiated a downward assessment on its Franklin Park Mall in the order of $2.8 million between 2010 and 2012.167 The Washington Local School District revealed that this had been a negotiated settlement after Westfield had appealed over and over again between 2007 and 2009 to have the property reassessed down from $256 million to just $109 million – a reduction of more than half the county’s assessed value.168 Westfield had previously been granted the right to tax exemption for the years 2006 and 2007 while the Franklin Park Mall underwent major expansion. It is clear from the Washington Local School District budgeting documents that the behavior of Westfield in appealing and balking at paying its fair share of property taxes has a significant impact on the school district’s budgets. As the school district argued in May 2010, ‘If [Westfield] are successful in their request to reduce their property values … this would have a significant negative impact on our annual revenue and cash balances.’169 Snapshot: Westfield in Ohio Westfield Franklin Park Westfield Great Northern Westfield Belden Taxed Value ($m) 247.7 93.4 20.2 Reported Value ($m) 318.1 144.5 210.9 Taxed Percent 78% 65% 10% Difference ($m) 70.4 51.1 Tax Loss ($m) 8.0 1.7 190.7 4.5 Number of additional teachers in Ohio that could be funded if Westfield paid its fair share: 215 $7.1 million for additional services 37
  • California As California’s largest retail landlord and one of the top property taxpayers in the communities in which it operates, Westfield’s tax avoidance has an over-sized impact. Westfield reports one set of property values to shareholders and aggressively seeks to lower the assessed property values for tax purposes. Proposition 13 has kept some assessed values of commercial property artificially low, but Westfield uses other means to avoid paying its fair share of property tax. On the 21 Westfield shopping malls in California, Westfield may be underpaying local property taxes by more than $41 million. While statewide commercial property tax reforms are needed, Californians must demand that Westfield - and other corporations - pay a fair share of property taxes. This report will summarize the findings for Westfield’s 21 California properties at the county level. For more details on individual properties within each county, please refer to the report ‘Malled by Westfield: The Consequences of Corporate Property Tax Avoidance.’170 It is worth noting that since this report was released in August 2013, Westfield’s most recent report to shareholders no longer reports property values by property as they had done in the past.171 This does raise questions about why Westfield has apparently changed its reporting practices to be become less transparent. Short-Changing Los Angeles The Los Angeles market has the highest concentration of Westfield malls anywhere in the world. Westfield ‘has spent $1.2 billion during the past five years overhauling, expanding and redoing L.A. properties.’172 There are ten Westfield properties in the Los Angeles area, four within the city of Los Angeles, four in other cities in Los Angeles County, and two malls in neighboring counties. Together the 8 malls in Los Angeles County represent a combined estimated annual tax revenue loss of $18.7 million. 38 If the current appraised values of Westfield’s eight Los Angeles County properties are combined, Westfield’s $2.3 billion in assessed value would rank it as the second largest property taxpayer (excluding energy companies).173 If the properties were assessed at their shareholder value of $3.6 billion, Westfield would be the largest property taxpayer in the county. Short-Changing San Diego Westfield owns seven landmark shopping malls in San Diego County. The combined assessed value of these properties is an estimated $1.5 billion and Westfield’s property tax bill was $17.5 million. This would make Westfield the largest (non-utility) property taxpayer in the County.174 However, the assessed values of Westfield’s properties are significantly lower than reported shareholder values despite recent massive property redevelopments. The combined shareholder value of these properties is $2.3 billion. If Westfield paid taxes on the full value of its San Diego County shopping malls it would generate an additional $8.1 million in annual tax revenues. Short-Changing San Jose Westfield owns two large shopping malls in Santa Clara County and is one of the largest taxpayers in the county.175 Westfield values these properties at $1.6 billion, but the assessed value is only $805 million. It appears that Westfield is only paying taxes on half the real value of its shopping malls. If Westfield paid taxes on the full value of its Santa Clara shopping malls it would generate an additional $9.8 million in tax revenue. This would make Westfield the largest property taxpayer in Santa Clara County after the utility company Pacific Gas & Electric.
  • Snapshot: Westfield in California Mall Taxed Value ($m) Reported Value ($m) Taxed Percent ($m) Difference ($m) Tax Loss ($m) LOS ANGELES COUNTY Century City 576.5 921.0 63% $344.5 $4.4 Culver City 199.0 330.0 60% 131.0 1.9 Fashion Square 150.3 317.6 47% 167.3 2.1 Promenade 39.1 49.3 79% 10.2 0.1 Santa Anita 358.7 548.1 65% 189.4 2.6 Topanga 481.6 755.3 64% 273.7 3.5 Valencia Town Center 349.1 391.2 89% 42.1 0.7 West Covina 187.3 328.4 57% 141.1 3.3 Horton Plaza 254.0 315.8 80% 61.8 0.7 Mission Valley 204.8 328.3 62% 123.5 1.4 North County 200.2 272.2 74% 72.0 0.8 Parkway 261.9 294.0 89% 32.1 0.5 Plaza Bonita 242.6 366.9 66% 124.3 1.4 Plaza Camino Real 116.0 151.0 77% 35.0 0.4 UTC 261.7 524.4 50% 262.7 2.9 Oakridge 234.4 426.0 55% 191.6 2.6 Valley Fair 570.8 1,170.0 49% 599.2 7.3 Mainplace 204.0 275.0 74% 71.0 0.8 Galleria at Roseville 318.0 608.0 52% 290.0 3.3 Palm Desert 141.9 150.0 95% 8.1 0.1 San Francisco 794.1 826.3 96% 32.2 0.4 6146.0 9348.7 66% 3202.7 41.2 SAN DIEGO COUNTY SANTA CLARA COUNTY OTHER COUNTIES TOTAL CALIFORNIA Number of additional teachers in California that could be funded if Westfield paid its fair share: 501 $20.6 million for additional services 39
  • Number of additional teachers in New Jersey that could be funded Number of additional Number of additional if Westfield teachers in New Jersey teachers in paid its of New Jersey Number fair 209 thatthat could additional could be funded teachers be funded share: in New Jersey New if Westfield Other States if Westfield that could be funded Number of additional paid Westfield paid its fair 209 teachers New Jersey if its fairin 209 share: could be funded that share: paid its fair 209 if Westfield share: Jersey Westfield owns one property in New Jersey – Garden State Plaza in the borough of Paramus – which according to its annual report is worth $1,683.6 million, making it the most valuable property that the Group owns in the United States.176 Despite this, the borough assesses the property as being worth just $670.8 million, or 40% of the reported shareholder value.177 Westland GSP L.P., a Westfield subsidiary, is already the largest taxpayer in the Borough of Paramus, accounting for 8.22% of the borough’s total assessed valuation.178 If this property was reassessed at its shareholder value, the county would stand to gain an estimated additional $17.1 million.179 209 $7 million paid its fair share: $7 million $7 million million $7 for additional services for forNumber services According to the tax bills for this property, Garden State Plaza additional of additional additional services $7 million not the past four years for additional services hasmore.been reassessed at any time in undergoing major or This property is also currently teachers services renovations worth $150 million. for Numberin Indiana that additional additional Number of additional of could be funded Number of additional teachers in Indiana that teachers in Indiana that Number of additional teachers inbe if Westfield could be funded could Indiana that Indiana funded teachers in Indiana that could ifpaid its fair be funded Westfield owns one property in Indiana – Westfield Southlake if Westfield couldif Westfield – which according to its annual report is worth $279.5 beWestfield funded paid itsshare: paid its fairfair million. Despite this, the assessed value of the property if Westfield 47 47 47 47 47 paid its fair 180 $2.5 million paidshare: its share: fair share: share: 181 according the Lake County is just $132.7 million, or 47% of the shareholder value.182 Westfield Southlake is already the second largest taxpayer in Lake County; however, if this property was reassessed at its fair value Westfield would become the largest taxpayer, outstripping even the local gas and electricity company.183 The county would also gain an estimated additional $4.1 million.184 $2.5 million $2.5 million for$2.5 million additional services $2.5 million for additionalservices services forfor additionalservices additional services for additional Number of additional of additional Numberof additional Number Number of ofin New JerseyNorth Carolina Number additional Number additional teachers inadditional teachersin New Jersey New teachers teachers in North Jersey teachers New Jersey teachers in in New Jersey Carolina that could be could that could be funded Westfield owns-one property in Gaston, Northshareholders as Carolinabe be funded that could funded Eastridge Mall which Westfield reports to its thatthatcould be fundedbe could that funded funded if being valued at $40.8 million. However, the assessed value if Westfield if Westfield if Westfield if Westfield if Westfield of the property according to Gaston County is $22.5 million, Westfield paid its fair or 55% of the reported shareholder value. Eastridge Mall is paid its fair paidits fair 3 its paid fairfair paid its its paid currently ranked as the twentieth largest taxpayer in Gaston share: 3 share: County; however if this property was assessed at its fair value, share: share: fair share: share: 3 33 $100,000.00 185 186 Westfield would become the eighth largest shareholder.187 The estimated tax gain for the county is an additional $200,000.188 $100,000.00 $100,000.00 for additional services $100,000.00 $100,000.00 for additional services for additional services for additional services for additional services 40
  • Conclusion This report has demonstrated an extraordinary disparity between the reported shareholder value and the taxed appraised value of the majority of Westfield properties in the US. The consequences of this for local communities are significant. The total amount of lost tax revenue from Westfield properties is $116.4 million annually. There may be an immediate possibility to raise property tax revenues moving forward and in some communities there could be the possibility of collecting back-taxes as well. We know from recent Westfield property sales that it is not shareholder values that are over-inflated, but county assessments that are undervalued. Furthermore, an assessment of available historical data indicates that the difference between shareholder values and the taxed value of Westfield properties has increased over time. This means that, if left unchecked, the lost tax revenue for local communities will only continue to grow. Without a change in Westfield’s behavior, children and communities will continue to suffer the consequences of under-funded schools and services. While Westfield may be more aggressive than others in lowering its property assessments, its practices represent a wider trend amongst commercial property owners. These practices are stripping local communities of much-needed funds for schools and other public services and must be addressed. The amount of tax dollars lost due to low property assessments amongst Westfield’s portfolio alone is enough to directly fund an additional 1,536 teachers and $60 million for police, fire fighters and other local government services. Particularly in the wake of the global financial crisis, citizens, school boards and local governments must demand more from companies that have continued to increase their profits while local communities have faced the brunt of austerity and budget cuts. Some communities are beginning to fight back as they realize the extent of their losses. People are getting organized in places like Pennsylvania, where local school boards are directly challenging the assessed values of large commercial properties. Their activities provide a useful model for other communities around the nation. As the discrepancy between real property values and taxed values increases over time and budgets tighten everywhere, communities need to adopt strategies that require companies like Westfield to pay its fair share. Westfield has an opportunity to be pro-active and change its tax avoidance policies now - setting an example for other corporations - or be held responsible by the communities in which it operates for shortchanging schools and essential services. Westfield’s current practices are unsustainable and will continue to shift the tax burden onto individuals and small businesses who are already struggling to make ends meet. 41
  • Appendix: National Summary of Westfield’s Property Taxes State Mall City County California Century City Los Angeles Los Angeles Culver City Culver City Los Angeles Fashion Square Sherman Oaks Los Angeles Promenade Woodland Hills Los Angeles Santa Anita Arcadia Los Angeles Topanga Canoga Park Los Angeles Valencia Town Center Valencia Los Angeles West Covina West Covina Los Angeles Horton Plaza San Diego San Diego Mission Valley San Diego San Diego North County Escondido San Diego Parkway El Cajon San Diego Plaza Bonita National City San Diego Plaza Camino Real Carlsbad San Diego UTC San Diego San Diego Oakridge San Jose Santa Clara Valley Fair Santa Clara Santa Clara Mainplace Santa Ana Orange Galleria at Roseville Roseville Placer Palm Desert Palm Desert Riverside San Francisco San Francisco San Francisco Brandon Brandon Hillsborough Broward Plantation Broward Citrus Park Citrus Park Hillsborough Countryside Clearwater Pinellas Sarasota Sarasota Sarasota Southgate Sarasota Sarasota TOTAL CALIFORNIA Florida TOTAL FLORIDA
  • School District Appraised Value ($m) Shareholder % Taxed Value ($m) Difference ($m) Tax Loss ($m) Teachers Lost Los Angeles Unified SD 576.5 921.0 63% 344.5 4.4 53 Culver City Unified SD 199.0 330.0 60% 131.0 1.9 23 Los Angeles Unified SD 150.3 317.6 47% 167.3 2.1 26 Los Angeles Unified SD 39.1 49.3 79% 10.2 0.1 1 Arcadia Unified SD 358.7 548.1 65% 189.4 2.6 32 Los Angeles Unified SD 481.6 755.3 64% 273.7 3.5 43 349.1 391.2 89% 42.1 0.7 9 West Covina Unified SD 187.3 328.4 57% 141.1 3.3 40 San Diego Unified SD 254.0 315.8 80% 61.8 0.7 9 San Diego Unified SD 204.8 328.3 62% 123.5 1.4 17 Escondido Union SD 200.2 272.2 74% 72.0 0.8 10 261.9 294.0 89% 32.1 0.5 6 242.6 366.9 66% 124.3 1.4 17 Carlsbad Unified SD 116.0 151.0 77% 35.0 0.4 5 San Diego Unified SD 261.7 524.4 50% 262.7 2.9 35 San Jose Unified SD 234.4 426.0 55% 191.6 2.6 32 Campbell Union SD 570.8 1,170.0 49% 599.2 7.3 89 204.0 275.0 74% 71.0 0.8 10 318.0 608.0 52% 290.0 3.3 40 Desert Sands Unified SD 141.9 150.0 95% 8.1 0.1 1 San Francisco Unified SD 794.1 826.3 96% 32.2 0.4 5 6146.0 9348.7 66% 3202.7 41.2 501 Hillsborough County SD 130.6 388.0 34% 257.4 $5.2 58 Broward County PS 98.4 159.4 62% 61.0 $1.3 18 Hillsborough County SD 112.0 221.0 51% 109.0 $2.2 24 Pinellas County SB 134.2 231.7 58% 97.5 $2.1 23 Sarasota County SB 84.2 125.0 67% 40.8 $0.6 10 Sarasota County SB 53.8 109.0 49% 55.2 $0.9 12 613.2 1234.1 50% 620.9 $12.3 145 Saugus Union elementary SD William S. Hart Union High SD Cajon Valley Union elementary SD Grossmont Union High SD Chula Vista elementary SD National elementary SD Sweetwater Union High SD Orange Unified SD Santa Ana Unified SD Roseville City Elementary SD Roseville City Unified High SD
  • Appendix: National Summary of Westfield’s Property Taxes State Mall City County Washington Capital Olympia Thurston Southcenter Tukwila King Vancouver Vancouver Clark Annapolis Annapolis Anne Arundel Montgomery Bethesda Montgomery Wheaton Wheaton Montgomery Fox Valley Aurora Du Page Hawthorn Vernon Hills Lake Old Orchard Skokie Cook Belden Village Canton Stark Franklin Park Toledo Lucas Great Northern North Olmsted Cuyahoga Connecticut Post Milford New Haven Meriden Meriden New Haven Trumbull Trumbull Fairfield Garden State Plaza (New Jersey) Paramus Bergen Southlake (Indiana) Merrillville Lake Eastridge (North Carolina) Gastonia Gaston TOTAL WASHINGTON Maryland TOTAL MARYLAND Illinois TOTAL ILLINOIS Ohio TOTAL OHIO Connecticut TOTAL CONNECTICUT OTHER TOTAL OTHER NATIONAL TOTAL
  • School District Shareholder % Taxed Value ($m) 187.3 51% Difference ($m) Tax Loss ($m) Teachers Lost OLYMPIA S.D. #111 Appraised Value ($m) 95.2 92.1 $1.2 19 Tukwila SD #406 295.0 754.0 39% 459.0 $6.5 89 Vancouver Public Schools 71.8 141.0 51% 69.2 $1.2 14 462.0 1,082.3 43% 620.3 $8.9 122 Anne Arundel Co. SB 477.8 700.2 68% 222.4 $2.3 28 Montgomery Co. SB 296.2 60% 201.2 $2.2 26 Montgomery Co. SB 175.1 271.5 64% 96.4 $1.1 13 949.1 1469.1 65% 520.0 5.7 67 Indian Prarie SD 204 98.0 208.5 47% 110.5 $3.5 59 Hawthorn SD #73 (elem) 59.0 183.0 32% 124.0 $3.7 71 412.9 541.1 76% 128.2 $4.4 83 569.9 932.6 61% 362.7 11.5 213 Jackson Local SD 20.2 210.9 10% 190.7 $4.5 68 Washington Local SD 247.7 318.1 78% 70.4 $8.0 121 North Olmsted City SD 93.4 144.5 65% 51.1 $1.7 26 361.3 673.5 54% 312.2 14.3 215 Milford Public Schools 190.4 236.8 80% 46.4 $0.9 11 Meriden Public Schools 115.9 135.7 85% 19.8 $0.2 2 Trumbull Public Schools 312.3 316.8 99% 4.5 $0.1 1 618.6 689.3 90% 70.7 1.2 14 Paramus Public Schools 670.8 1,683.6 40% 1,012.8 $17.1 209 Merrillville Community SD 132.6 279.5 47% 146.9 $4.1 47 Gaston County Schools 22.5 40.8 55% 18.3 $0.2 3 825.9 2003.9 41% 1178.0 21.5 259 $10,546.00 $17,433.47 60% $6,887.47 $116.45 1536 497.4 CHSD 128 (high) Skokie SD #68 (elem) Niles Township CHSD 219
  • Endnotes 1. The authors have examined assessed values and shareholder reported values for 45 of Westfield’s 47 properties in their US portfolio for 2012. Two properties located in the state of New York have been excluded from the analysis since property tax regulations in this state are substantially different, making a comparison between these properties and the wider portfolio impractical. Westfield has additional ownership interests in other US properties that have not been included in this analysis. Sources and methodology for some of these properties are explained in detail below. This is the best estimate possible based on currently available information. It is possible that additional parcels have been included or excluded as Westfield owns its properties through many different subsidiaries and many anchor tenants own their own property. In general, for each of the 45 properties, the 2012 tax rates were applied to the difference between the 2012 values reported to shareholders and the 2012 assessed values of the parcels owned by Westfield controlled entities. Assessed values on Westfield owned parcels were obtained from various online sources and confirmed by reviewing online county assessment records in August and September 2013. In properties with joint venture partners, 100% of the property value and tax liability has been attributed to Westfield as the managing partner of these investments. 2. This estimate is calculated based on the average starting teacher salary for 2011-2012 as reported by the National Education Association. This is then divided by the amount of tax lost on Westfield properties multiplied by the average percentage of tax designated for schools. Where the exact amount of tax designated for schools was unavailable, an average of 50% has been applied. See: NEA, ‘Rankings of the States 2012 and Estimates of School Statistics 2013’, December 2012, p. 92 3. These figures are based on averages of the rate reported by individual counties. Where this rate was unavailable, an estimate of 50% was supplied. The amount of property tax distributed to schools varied between 39% and 71% for those counties where this information was available. 4. NEA, ‘2011-2012 Average Starting Teacher Salaries by State’ http:// www.nea.org/home/2011-2012-average-starting-teacher-salary.html. Accessed 23 October 2013. 5. Stark County Auditor http://ddti.starkcountyohio.gov/Search.aspx Accessed 4 September 2013. Westfield Group, Supplemental Information Report, 31 December 2012, p. 17. 6. Lake County Property Tax Search http://apps01.lakecountyil.gov/ sptreasurer/collbook/collbook2.asp Accessed 3 September 2013. Westfield Group, Supplemental Information Report, 31 December 2012, p. 17. 7. Borough of Paramus Tax Assessor http://tax1.co.monmouth.nj.us/ cgi-bin/prc6.cgi?menu=index&ms_user=paramus&passwd=modiv&mode=12&district=0246&selcount=0201 Accessed 22 August 2013. Westfield Group, Supplemental Information Report, 31 December 2012, p. 17. 8. http://corporate.westfield.com/news_announcements/westfield-group-announces-multiple-center-transaction-with-starwood-capital-group/ Accessed 2 October 2013. 9. Maryland State Education Association, Maintenance of Effort: Repairing Maryland’s School Funding Safeguard, http://www.mceanea. org/pdf/MOEWhitePaper.pdf. Accessed 23 October 2013. Montgomery County Teachers Discuss the Impact of Budget Cuts, Maryland State Education Association, 3 February 2012. https://www.youtube.com/ watch?v=eNgp2iYQSGc. Accessed 23 October 2013. 10. Gwladys Fouche and Joachim Dagenborg, ‘Norway Oil Fund Concerned about Tax Evasion,’ Reuters, 9 August 2013. http:// uk.reuters.com/article/2013/08/09/uk-norway-wealthfund-idUKBRE9780MZ20130809. Accessed 24 September 2013. Terry Macalister, ‘Tax avoidance “not a legal duty”: Director’s fiduciary duty to shareholders is not to maximise dividends through tax avoidance, says new official advice,’ The Guardian, 9 September 2013. http://www.theguardian.com/business/2013/sep/08/tax-avoidance. Accessed 24 September 2013. Similar legal requirements exist within the Australian jurisdiction 46 under the Corporations Act, while some of the case law referred to in this legal opinion is also binding authority within Australia. 11. ‘Bethlehem Area School Board to appeal assessment of 50 commercial and apartment properties,’ The Morning Call, 24 July 2012. http://articles.mcall.com/2012-07-24/news/mc-bethlehem-schools-assessment-appeals-20120723_1_assessment-appeals-lehigh-county-properties-property-owners. School District of Upper Dublin, Legislative Meeting Minutes, 11 February 2013. https://www.udsd.org/ uploaded/documents/Minutes/February_11,_2013-_Legislative_Meeting.pdf. Accessed 25 September 2013. Tony Fioriglio, ‘Palmer Sworn in to Colonial School Board,’ The Times Herald, 10 January 2013 http://www.timesherald.com/article/JR/20130110/NEWS/130119937. Freda R. Savana, ‘Upper Moreland Loos to Assessment Appeals,’ The Intelligencer, 27 July 2012 http://www.theintell.com/news/communities/willow-grove/upper-moreland-looks-to-assessment-appeals/ article_fdee0820-7391-5846-af2c-ad8b935a2e68.html. Chamberburg School Board Hires Consultant to Review Property Tax Assessments http://www.scribd.com/doc/102449330/Keystone-Terms-and-Conditions-7-30-12. Accessed 25 September 2013. Upper Merion Area School District, Minutes of meeting 3 June 2013. Shawn Klocek, ‘CV Going After Reassessment Appeals,’ Chartiers Valley Patch, 15 March 2012. http://chartiersvalley.patch.com/groups/schools/p/despite-concerns-cv-oks-solicitor-appeals. Downingtown Area School District, Finance Committee Meeting, 7 March 2012. http://dasd-sharepoint.dasd. org/SchoolBoard/Agendas/Finance%20Committee%20Agenda%20 3-7-12.pdf. North Penn School District, Informational Sheets, July 2010. http://www.npenn.org/cms/lib/PA09000087/Centricity/Domain/16/ July_15_2010/Combined%20Information%20Sheets.pdf. Minutes of the Lower Moreland Township School District Regular Meeting of 18 January 2011. http://www.lmtsd.org/cms/lib/PA01000427/Centricity/ Domain/74/minutes%201%2018%2011.pdf. 12. Washington Local School District, Five-Year Forecast, May 2010. http://www.washloc.k12.oh.us/treasurer/upload/wls_5yr_ forcast_201010.pdf. Accessed 24 September 2013. Washington Local School District, Five-Year Forecast, May 2012. http://www.washloc.k12. oh.us/treasurer/upload/5-Year-Forecast-May-2012.pdf. Accessed 24 September 2013. Auditors Real Estate Information System Lucas County http://maps.co.lucas.oh.us/areis/areis.asp. Accessed 4 September 2013. 13. ‘Manhattan Grand Jury Recommends Sweeping Reforms to NYC Property System,’ Cyrus R. Vance, Jr., New York County District Attorney, 1 August 2012. http://manhattanda.org/press-release/manhattan-grand-jury-recommends-sweeping-reforms-nyc-property-tax-system 14. Montgomery County Teachers Discuss the Impact of Budget Cuts, Maryland State Education Association, 3 February 2012. https://www. youtube.com/watch?v=eNgp2iYQSGc. Accessed 23 October 2013. 15. http://corporate.westfield.com/about/ Accessed 18 September 2013. 16. http://corporate.westfield.com/about/ Accessed 18 September 2013. All currency conversions made via http://www.xe.com using the exchange rate $1 AUD = $0.94 USD as at 2 October 2013. 17. Chairman’s Review, Westfield Group Shareholder Review, 30 April 2013. http://corporate.westfield.com/wp-content/uploads/2013/05/ Shareholder-review-lores-FINAL.pdf 18. http://corporate.westfield.com/about/ Accessed 18 September 2013. 19. Westfield Group, Appendix D, Half Year Results, 30 Jun 2013, p. 12. 20. Westfield Group, Appendix D, Half Year Results, 30 Jun 2013, p. 37. 21. In total, property tax generated $578 billion in revenues for local government services in 2011. http://www2.census.gov/govs/local/ summary_report.pdf. In 2010, property taxes generated $211 billion in funds for public schools in the US, 35% of total funding. http://nces. ed.gov/programs/digest/d12/tables/dt12_202.asp
  • 22. One general explanation of how property taxes work for homeowners is ‘Property taxes explained,’ bankrate.com http://www. bankrate.com/finance/taxes/property-taxes-explained.aspx Accessed 18 September 2013. Additional information on property taxes across the country is available from the Tax Foundation, a non-partisan tax research group. http://www.taxfoundation.org/tax-topics/property-taxes Accessed 18 September 2013. 23. William M. Doerner, Keith R. Ihlanfeldt, ‘An Empirical Critique of the Property Tax Appeals Process,’ Working Paper, http://www.artsci. wustl.edu/~cre/ihlanfeldt_paper.pdf. 24. Philip Mattera and Anna Purinton, ‘Shopping For Subsidies: How Wal-Mart Uses Taxpayer Money to Finance its Never-Ending Growth,’ Good Jobs First, May 2004. http://www.goodjobsfirst.org/sites/default/ files/docs/pdf/wmtstudy.pdf 25. The poll was commissioned by the International Trade Union Confederation and covered more than 1,000 respondents in 13 different countries. http://www.ituc-csi.org/new-global-poll-shows-overwhelming. Accessed 24 September 2013. 26. Gwladys Fouche and Joachim Dagenborg, ‘Norway Oil Fund Concerned about Tax Evasion,’ Reuters, 9 August 2013. http:// uk.reuters.com/article/2013/08/09/uk-norway-wealthfund-idUKBRE9780MZ20130809. Accessed 24 September 2013. 27. Terry Macalister, ‘Tax avoidance “not a legal duty”: Director’s fiduciary duty to shareholders is not to maximise dividends through tax avoidance, says new official advice,’ The Guardian, 9 September 2013. http://www.theguardian.com/business/2013/sep/08/tax-avoidance. Accessed 24 September 2013. Similar legal requirements exist within the Australian jurisdiction under the Corporations Act, while some of the case law referred to in this legal opinion is also binding authority within Australia. 28. Westfield Group, Annual Financial Report for the Year Ended 31 December 2012, p. 54 29. This report is based on 45 of the 47 properties Westfield owned in 2012. Since then, Westfield has sold 7 properties to Starwood Capital in September 2013: Belden Village, OH; Westfield Capital, WA; Franklin Park, OH; Great Northern, OH; Westfield Parkway, CA; Westfield Southlake, IN; Westfield West Covina, CA. See: http://corporate.westfield.com/news_announcements/westfield-group-announces-multiple-center-transaction-with-starwood-capital-group/. Accessed 2 October 2013. For the remainder of this report these properties are taken as part of the Westfield portfolio, since the sale took place after the period being researched. 30. This estimate is calculated based on the average starting teacher salary for 2011-2012 as reported by the National Education Association. This is then divided by the amount of tax lost on Westfield properties multiplied by the average percentage of tax designated for schools. Where the exact amount of tax designated for schools was unavailable, an average of 50% has been applied. See: http://www.nea. org/home/2011-2012-average-starting-teacher-salary.html. Accessed 23 October 2013. 31. These figures are based on averages of the rate reported by individual counties. Where this rate was unavailable, an estimate of 50% was supplied. The amount of property tax distributed to schools varied between 39% and 71% for those counties where this information was available. 32. NEA, ‘2011-2012 Average Starting Teacher Salaries by State’ http://www.nea.org/home/2011-2012-average-starting-teacher-salary. html. Accessed 23 October 2013. 33. Auditors Real Estate Information System Lucas County http:// maps.co.lucas.oh.us/areis/areis.asp Accessed 4 September 2013. 34. Westfield Group, Supplemental Information Report, 31 December 2012, p. 17. 35. David Zahniser, ‘L.A. City Council votes to let mall developer keep tax revenue,’ Los Angeles Times, 28 June 2013. http://articles.latimes. com/2013/jun/28/local/la-me-westfield-council-20130629. Accessed 23 October 2013. 36. The Village at Westfield Topanga Fact Sheet http://www.westfield. com/topanga/thevillage/factsheet/. Accessed 23 October 2013. 37. Katlyn Smith, ‘Vernon Hills Approves Tax Incentive for Westfield Hawthorn Mall Overhaul,’ Lake County News-Sun, 5 June 2013. http:// newssun.suntimes.com/news/20539416-781/vernon-hills-approvestax-incentive-for-westfield-hawthorn-mall-overhaul.html. Accessed 2 October 2013. 38. Josh Reinert, ‘Tax Increment Financing in Missouri: is it time for blight and but-for to go?’, Saint Louis University Law Journal, Vol. 45, No. 3 (Summer 2001), 1019-1053. Jeff Gallatin, ‘Officials believe TIF a strong business development tool in North Olmsted,’ WestLife, 20 September 2012 http://westlife.northcoastnow.com/officials-believe-tif-a-strong-business-development-tool-in-north-olmsted/. Accessed 2 October 2013. Washington Local Schools Board of Education Meeting, 15 May 2013. http://www.washloc.k12.oh.us/board/meetings/2013/upload/2013-May.pdf. Accessed 2 October 2013. 39. Westfield Southcenter, Tukwila WA; Westfield Capital, Olympia WA; Westfield Sarasota, Sarasota FL; Westfield Countryside, Clearwater FL; Westfield Fox Valley, Aurora IL; Westfield Old Orchard, Skokie IL; Franklin Park, Toledo OH. These malls were chosen as a random selection based on where historical data was available. Not all taxing jurisdictions provide historical data by which to make these comparisons. 40. Auditors Real Estate Information System Lucas County http:// maps.co.lucas.oh.us/areis/areis.asp. Accessed 4 September 2013. 41. Washington Local School District, Five-Year Forecast, May 2012. http://www.washloc.k12.oh.us/treasurer/upload/5-Year-ForecastMay-2012.pdf. Accessed 24 September 2013. 42. Washington Local School District, Five-Year Forecast, May 2010. http://www.washloc.k12.oh.us/treasurer/upload/wls_5yr_ forcast_201010.pdf. Accessed 24 September 2013. Emphasis in the original. 43. ‘Encouraging Smart Growth and Helping Wheaton Business,’ Generally Assembled Blog, 4 March 2009. http://maryland18.blogspot. com/2009/02/encouraging-smart-growth-and-helping.html Accessed 11 September 2013. 44. Montgomery County Property Tax Information https://www6. montgomerycountymd.gov/apps/tax/index.asp Accessed 11 September 2013 45. Montgomery County Property Tax Information https://www6. montgomerycountymd.gov/apps/tax/index.asp Accessed 11 September 2013 46. Thurston County Treasurer website http://tcproperty.co.thurston. wa.us/propsql/front_s.asp Accessed 20 August 2013. Clark County Property Information http://gis.clark.wa.gov/ Accessed 20 August 2013. 47. County of Du Page Property Lookup http://www.dupageco.org/ PropertyInfo/PropertyLookup.aspx Accessed 29 August 2013. 48. Cook County Assessor’s office http://www.cookcountyassessor. com/Property_Search/Property_Search.aspx Accessed 3 September 2013. Cook County Property Tax http://www.cookcountypropertyinfo. com/Pages/PIN-Search.aspx Accessed 3 September 2013. 49. Pinellas County Property Appraiser http://www.pcpao.org/ Accessed 27 August 2013. Pinellas County Tax Collector https://www. pinellas.county-taxes.com/ Accessed 27 August 2013. 50. “Fingertip Facts 2012-2013”, Los Angeles Unified School District. http://home.lausd.net/ourpages/auto/2011/12/22/46088560/Fingertip%20Facts%2012-13%20EN.pdf 51. “L.A. Unified budget would cut thousands of jobs”, Los Angeles Times, March 14, 2012. http://articles.latimes.com/2012/mar/14/local/ la-me-0314-lausd-budget-20120314 47
  • Endnotes 52. “Quality Counts 2012”, Education Week, January 12, 2012. Data accessed here: http://toped.svefoundation.org/2012/01/13/ca-studentspending-near-bottom/ 53. ibid. 54. “Superintendent’s Revised Budget 2012-2013”, Los Angeles Unified School District, September 12, 2012. (pdf p.20) http://budgetrealities.lausd.net/sites/default/files/Revised%20Budget%20101112%20 -%20FINAL.pdf 161,484 students “are still learning to speak English proficiently” out of the K-12 student enrollment of 664,233; this is 24.3%. 55. “LAUSD Budget Realities Website”, Los Angeles Unified School District. http://budgetrealities.lausd.net/ 56. “Superintendent’s Revised Budget 2012-2013”, Los Angeles Unified School District, September 12, 2012. (pdf p.10) http://budgetrealities.lausd.net/sites/default/files/Revised%20Budget%20101112%20 -%20FINAL.pdf 57. “LAUSD Budget Realities Website”, Los Angeles Unified School District. http://budgetrealities.lausd.net/ 58. ibid. 59. “Rankings and Estimates: Ranking of the States 2011 and Estimates of School Statistics 2012”, National Education Association (NEA), December 2011, p.17, C-6 Students Enrolled Per Teacher in Public K-12 Schools, Fall 2010. http://www.nea.org/assets/docs/NEA_Rankings_ And_Estimates_FINAL_20120209.pdf 60. ibid. 61. ibid. 62. “BOARD APPROVED STAFFING RATIOS FOR 2012‐13 ELEMENTARY SCHOOLS” Los Angeles Unified School District, 14 March 2012, p.6. http://notebook.lausd.net/pls/ptl/docs/PAGE/CA_LAUSD/ LAUSDNET/OFFICES/CFO_HOME/SFSD_HOME/ELEMENTARY%20 COMPLETE%20-%20MARCH%2014_REVISED2.PDF Schools “Designated as Predominantly Latino, Black, Asian & Other Non‐Anglo” have approved teacher student ratios of 29.5 for K-3 and 30.5 for grades 4-6. 63. Century City, Topanga, Fashion Square & Promenade malls. 64. The estimated lost tax revenue for the Century City, Topanga and Fashion Square ($4.4, $3.5 & $2.1) are discussed above. The estimated lost tax revenue on the Promenade Mall is $100,000. The total on the 4 properties is $10.1651 million. 69. ibid. 70. ibid. 71. Montgomery County Education Association, History of Montgomery County Government Funding of MCPS. http://www.mceanea.org/ pdf/countyfundingthroughFY2012.pdf. Accessed 23 October 2013. 72. Montgomery County Education Association, Local Funding Compared to Maintenance of Effort Requirements, FY 2003 to FY 2012, http://www.mceanea.org/pdf/MOETrendDataFY03-12.pdf. Accessed 23 October 2013. 73. Maryland State Education Association, Maintenance of Effort: Repairing Maryland’s School Funding Safeguard, http://www.mceanea. org/pdf/MOEWhitePaper.pdf. Accessed 23 October 2013. 74. Montgomery County Teachers Discuss the Impact of Budget Cuts, Maryland State Education Association, 3 February 2012. https://www. youtube.com/watch?v=eNgp2iYQSGc. Accessed 23 October 2013. 75. Montgomery County Teachers Discuss the Impact of Budget Cuts, Maryland State Education Association, 3 February 2012. https://www. youtube.com/watch?v=eNgp2iYQSGc. Accessed 23 October 2013. 76. Eboni Walker, Kindergarten, Sargent Shriver Elementary School. Montgomery County Teachers Discuss the Impact of Budget Cuts, Maryland State Education Association, 3 February 2012. https://www. youtube.com/watch?v=eNgp2iYQSGc. Accessed 23 October 2013. 77. Jesse McGee, Vocational and Technical Education, Thomas Edison High School. Montgomery County Teachers Discuss the Impact of Budget Cuts, Maryland State Education Association, 3 February 2012. https://www.youtube.com/watch?v=eNgp2iYQSGc. Accessed 23 October 2013. 78. Montgomery County Teachers Discuss the Impact of Budget Cuts, Maryland State Education Association, 3 February 2012. https://www. youtube.com/watch?v=eNgp2iYQSGc. Accessed 23 October 2013. 79. ‘Property Tax Evasion in City is Widespread, Report Suggests,’ New York Times, 1 August 2012, http://www.nytimes.com/2012/08/02/ nyregion/property-tax-evasion-in-city-is-widespread-report-suggests. html 80. ‘Manhattan Grand Jury Recommends Sweeping Reforms to NYC Property System,’ Cyrus R. Vance, Jr., New York County District Attorney, 1 August 2012. http://manhattanda.org/press-release/manhattan-grand-jury-recommends-sweeping-reforms-nyc-property-tax-system 65. Property taxes are collected by the county and then redistributed by the state and supplemented with additional state aid. According to the “Fiscal Year 2011-2012 1% Property Tax Revenue Allocation Summary” from the Los Angeles County Auditor Controller, (http://auditor.lacounty.gov/wps/portal/ac/!ut/p/ c5/04_SB8K8xLLM9MSSzPy8xBz9CP0os3hXAwMDd3-3YCN3x2BnA08f5wBzS0MjQ4MAM6B8JJK8f4ifgYGnqVugn6l7iLGJuSkB3X4e-bmp-gW5EeUA4Ti5NQ!!/dl3/d3/L2dJQSEvUUt3QS9ZQnZ3LzZfRTAwMEdPRlMyR0FTQzBJTENQNzkxMjE4QzU!/?1dmy&page=dept. lac.ac.home.propertytax.summaries.detail.hidden&urile=wcm%3apath%3a/auditor-controller+content/auditor-controller+site/home/ prop+tax/reports-sum/p20-fy1112+prop+tax2) 41.03% of the general 1% tax levy goes to school districts. The specific levy for schools combined with the 41.03% of the general levy is 46% of the total tax rate. Additional tax revenue that goes to the city and county from the property tax may also be used to support the schools. 81. ‘Manhattan Grand Jury Recommends Sweeping Reforms to NYC Property System,’ Cyrus R. Vance, Jr., New York County District Attorney, 1 August 2012. http://manhattanda.org/press-release/manhattan-grand-jury-recommends-sweeping-reforms-nyc-property-tax-system 66. The average starting pay for teachers with regular credentials is $41,131 in California. NEA, ‘2011-2012 Average Starting Teacher Salaries by State’ http://www.nea.org/home/2011-2012-average-starting-teacher-salary.html. Accessed 23 October 2013. 85. ‘Manhattan Grand Jury Recommends Sweeping Reforms to NYC Property System,’ Cyrus R. Vance, Jr., New York County District Attorney, 1 August 2012. http://manhattanda.org/press-release/manhattan-grand-jury-recommends-sweeping-reforms-nyc-property-tax-system 67. This is based on the same figure as above. 86. Washington Local School District, Five-Year Forecast, May 2010. http://www.washloc.k12.oh.us/treasurer/upload/wls_5yr_ forcast_201010.pdf. Accessed 24 September 2013. Washington Local School District, Five-Year Forecast, May 2012. http://www.washloc.k12. 68. The Westfield Group Sustainability Report 2012, p.44 http://westfield2012.sustainability-report.com.au/sites/westfield2012.sustainability-report.com.au/files/downloads/westfield_sr_2012.pdf 48 82. ‘Coral Ridge Mall Sues Over Property Assessment Increase,’ KCRG News, 19 June 2012, http://www.kcrg.com/news/local/CoralRidge-Mall-Sues-Over-Property-Assessment-Increase-159633565.html http://thegazette.com/2012/06/19/coral-ridge-mall-sues-over-propertyassessment-increase/ 83. ‘Coral Ridge Mall Sues Over Property Assessment Increase,’ KCRG News, 19 June 2012, http://www.kcrg.com/news/local/Coral-RidgeMall-Sues-Over-Property-Assessment-Increase-159633565.html 84. ‘Coral Ridge Mall Sues Over Property Assessment Increase,’ The Gazette, 19 June 2012 http://thegazette.com/2012/06/19/coral-ridgemall-sues-over-property-assessment-increase/
  • oh.us/treasurer/upload/5-Year-Forecast-May-2012.pdf. Accessed 24 September 2013. Auditors Real Estate Information System Lucas County http://maps.co.lucas.oh.us/areis/areis.asp. Accessed 4 September 2013. 87. ‘Property Owners pay to “settle” schools tax value appeals,’ Columbus Dispatch, 15 July 2012. http://www.dispatch.com/content/ stories/local/2012/07/15/propert-owners-pay-to-settle-schools-tax-value-appeals.html 88. ‘Property Owners pay to “settle” schools tax value appeals,’ Columbus Dispatch, 15 July 2012. http://www.dispatch.com/content/ stories/local/2012/07/15/propert-owners-pay-to-settle-schools-tax-value-appeals.html 89. ‘Bethlehem Area School Board to appeal assessment of 50 commercial and apartment properties,’ The Morning Call, 24 July 2012. http://articles.mcall.com/2012-07-24/news/mc-bethlehem-schools-assessment-appeals-20120723_1_assessment-appeals-lehigh-county-properties-property-owners 90. ‘Bethlehem Area School Board to appeal assessment of 50 commercial and apartment properties,’ The Morning Call, 24 July 2012. http://articles.mcall.com/2012-07-24/news/mc-bethlehem-schools-assessment-appeals-20120723_1_assessment-appeals-lehigh-county-properties-property-owners 91. ‘Bethlehem Area School Board to appeal assessment of 50 commercial and apartment properties,’ The Morning Call, 24 July 2012. http://articles.mcall.com/2012-07-24/news/mc-bethlehem-schools-assessment-appeals-20120723_1_assessment-appeals-lehigh-county-properties-property-owners 92. ‘Bethlehem Area School Board to appeal assessment of 50 commercial and apartment properties,’ The Morning Call, 24 July 2012. http://articles.mcall.com/2012-07-24/news/mc-bethlehem-schools-assessment-appeals-20120723_1_assessment-appeals-lehigh-county-properties-property-owners 93. School District of Upper Dublin, Legislative Meeting Minutes, 11 February 2013. https://www.udsd.org/uploaded/documents/ Minutes/February_11,_2013-_Legislative_Meeting.pdf. Accessed 25 September 2013. Tony Fioriglio, ‘Palmer Sworn in to Colonial School Board,’ The Times Herald, 10 January 2013 http://www.timesherald. com/article/JR/20130110/NEWS/130119937. Freda R. Savana, ‘Upper Moreland Loos to Assessment Appeals,’ The Intelligencer, 27 July 2012 http://www.theintell.com/news/communities/willow-grove/ upper-moreland-looks-to-assessment-appeals/article_fdee0820-73915846-af2c-ad8b935a2e68.html. Chamberburg School Board Hires Consultant to Review Property Tax Assessments http://www.scribd.com/ doc/102449330/Keystone-Terms-and-Conditions-7-30-12. Accessed 25 September 2013. Upper Merion Area School District, Minutes of meeting 3 June 2013. Shawn Klocek, ‘CV Going After Reassessment Appeals,’ Chartiers Valley Patch, 15 March 2012. http://chartiersvalley. patch.com/groups/schools/p/despite-concerns-cv-oks-solicitor-appeals. Downingtown Area School District, Finance Committee Meeting, 7 March 2012. http://dasd-sharepoint.dasd.org/SchoolBoard/Agendas/ Finance%20Committee%20Agenda%203-7-12.pdf. North Penn School District, Informational Sheets, July 2010. http://www.npenn.org/cms/ lib/PA09000087/Centricity/Domain/16/July_15_2010/Combined%20 Information%20Sheets.pdf. Minutes of the Lower Moreland Township School District Regular Meeting of 18 January 2011. http://www.lmtsd. org/cms/lib/PA01000427/Centricity/Domain/74/minutes%201%20 18%2011.pdf. 94. Kelly Phillips Erb, ‘Philadelphia Battle Over Property Tax Assessments Raises Questions About Funding Public Schools,’ Forbes, 6 March 2013. http://www.forbes.com/sites/kellyphillipserb/2013/03/06/ philadelphia-battle-over-property-tax-assessments-raises-questions-about-funding-public-schools/. 95. Mark P. Thompson, Scot R. Withers, ‘En Banc Commonwealth Court Upholds School District Property Tax Appeals,’ Lamb McErlane PC Attorneys at Law. http://www.lambmcerlane.com/ news/2013720524-en-banc-commonwealth-court-upholds-schooldistrict-property-tax-appeals. Accessed 25 September 2013. See also: Commonwealth Court Affirms Rights of School Districts to Appeal Tax Assessments Based on Recent Sales, Maiello Brungo and Maiello, LLP http://www.mbm-law.net/newsletter-articles/commonwealth-court-affirms-right-of-school-districts-to-appeal-tax-assessments-based-on-recent-sales/1193/. Accessed 25 September 2013. 96. http://dor.wa.gov/Content/FindTaxesAndRates/PropertyTax/ prop_BusPropertyValue.aspx 97. City of Olympia Principal Property Tax Payers, City of Olympia Comprehensive Annual Financial Report 2012, p. 110. Thurston County Principal Tax Payers, Thurston County Comprehensive Annual Financial Report 2012, p. 232. 98. Westfield Group, Supplemental Information Report, 31 December 2012, p. 17. 99. Thurston County Treasurer website http://tcproperty.co.thurston. wa.us/propsql/front_s.asp Accessed 20 August 2013. 100. The difference is found by applying the average tax rate recorded on the county tax bills for Westfield’s individual parcels. 101. Clark County Property Information http://gis.clark.wa.gov/ Accessed 20 August 2013. 102. City of Vancouver Principal Property Taxpayers, City of Vancouver Comprehensive Annual Financial Report 2012, p. 172. Clark County Principal Property Taxpayers, Clark County Comprehensive Annual Financial Report 2012, p. 204. 103. Westfield Group, Supplemental Information Report, 31 December 2012, p. 17. 104. This estimate is found by applying the tax rate of 1.41% as indicated on the tax bill for this property. 105. Westfield Group, ‘Westfield Southcenter Celebrates Completion of US$240 million Renovation,’ 25 July 2008. http:// corporate.westfield.com/news_announcements/westfield-southcenter-celebrates-completion-of-us-240-million-revitalization/ Accessed 11 September 2013. 106. Westfield Group, Supplemental Information Report, 31 December 2012, p. 17. 107. The difference is found by applying the average tax rate recorded on the county tax bills for Westfield’s individual parcels. 108. Thurston County Treasurer website http://tcproperty. co.thurston.wa.us/propsql/front_s.asp 109. Accessed 20 August 2013. Clark County Property Information http://gis.clark.wa.gov/ Accessed 20 August 2013. 110. http://www.ct.gov/opm/cwp/view.asp?a=2985&q=383128 Accessed 17 September 2013. 111. Westfield Group, Supplemental Information Report, 31 December 2012, p. 17. City of Milford Tax Collectors Office http://www. ci.milford.ct.us/Public_Documents/MilfordCT_Tax/index Accessed 20 August 2013. Assessors Online Database, Milford CT http://data.visionappraisal.com/MilfordCT/search.asp Accessed 20 August 2013. City of Meriden Property Search http://gis.meridenct.gov/meriden/PropertySearch.aspx Accessed 20 August 2013. Town of Meriden Tax Bill https:// www.mytaxbill.org/inet/bill/home.do?town=meriden Accessed 20 August 2013. City of Trumbull Assessors Online Database http://data. visionappraisal.com/TrumbullCT/search.asp Accessed 20 August 2013. Trumbull GIS Mapping http://ags2.cdm.com/trumbullct/ Accessed 20 August 2013. 112. City of Milford Principal Property Taxpayers, City of Milford Comprehensive Annual Financial Report 2012, p. 80. The 2012 tax rate of 2.889% has been applied according to the information provided by the Connecticut Office of Policy and Management: http://www.ct.gov/ opm/cwp/view.asp?a=2987&q=385976&opmNav_GID=1807 49
  • Endnotes 113. City of Meriden Principal Property Taxpayers, City of Meriden Comprehensive Annual Financial Report 2012, p. 95. The 2012 tax rate of 2.983% has been applied according to the information provided by the Connecticut Office of Policy and Management: http://www. ct.gov/opm/cwp/view.asp?a=2987&q=385976&opmNav_GID=1807. 114. Ten Largest Taxpayers, Town of Trumbull, Connecticut, General Obligation Bonds, Issue of 2013, p. 22 115. ‘Encouraging Smart Growth and Helping Wheaton Business,’ Generally Assembled Blog, 4 March 2009. http://maryland18. blogspot.com/2009/02/encouraging-smart-growth-and-helping.html Accessed 11 September 2013. 116. Montgomery County Property Tax Information https:// www6.montgomerycountymd.gov/apps/tax/index.asp Accessed 11 September 2013 117. This estimate is calculated by applying the stated tax rate of 1.145% as reported on the tax bill. 118. Montgomery County Property Tax Information https:// www6.montgomerycountymd.gov/apps/tax/index.asp Accessed 11 September 2013 119. Westfield Group, Supplemental Information Report, 31 December 2012, p. 17. 120. This estimate is calculated by applying the stated tax rate of 1.133% as reported on the tax bill. 121. ‘Large Single-Property Retail Transactions 2011,’ Real Estate Alert, 31 December 2011, http://www.realert.com/sales_activity. php?rid=240 Accessed 11 September 2013. 122. Montgomery County Ten Highest Commercial Property Taxpayers, Montgomery County Comprehensive Annual Financial Report 2012, p. 201 123. Anne Arundel County Principal Property Tax Payers, Anne Arundel County Comprehensive Annual Financial Report 2012, p. 158 124. Sources: Maryland Department of Assessments and Taxation http://sdat.resiusa.org/RealProperty/Pages/default.aspx Accessed 20 August 2013. Anne Arundel County Tax Portal https://aacounty. munisselfservice.com/login.aspx?ReturnUrl=%2fcitizens%2fdefault.aspx Accessed 20 August 2013. 125. Westfield Group, Supplemental Information Report, 31 December 2012, p. 17. 126. This estimate is calculated by applying the stated tax rate of 1.062% as reported on the tax bill. 127. Anne Arundel County Principal Property Tax Payers, Anne Arundel County Comprehensive Annual Financial Report 2012, p. 158 128. Hillsborough County Property Appraiser http://www.hcpafl. org Accessed 22 August 2013. 129. Westfield Group, Supplemental Information Report, 31 December 2012, p. 17. 130. Hillsborough County Property Appraiser http://www.hcpafl. org Accessed 22 August 2013. Westfield Group, Supplemental Information Report, 31 December 2012, p. 17. 131. This estimate is based on applying the aggregated tax rate for each property based on the tax bills. 132. Hillsborough County Principal Taxpayers, Hillsborough County Comprehensive Annual Financial Report 2011, p. 235 133. Sarasota County Property Appraiser http://www.sc-pa.com/ testsearch/Search/Index Accessed 22 August 2013. Westfield Group, Supplemental Information Report, 31 December 2012, p. 17. 134. Sarasota County Property Appraiser http://www.sc-pa.com/ testsearch/Search/Index Accessed 22 August 2013. Westfield Group, Supplemental Information Report, 31 December 2012, p. 17. 50 135. Sarasota County Principal Property Taxpayers, Sarasota County Comprehensive Annual Financial Report 2012, p. 232 136. This estimate is based on applying the aggregated tax rate for each property based on the tax bills. 137. Broward County Property Appraiser http://www.bcpa.net/ RecName.asp Accessed 22 August 2013. Westfield Group, Supplemental Information Report, 31 December 2012, p. 17. 138. Pinellas County Property Appraiser http://www.pcpao.org/ Accessed 27 August 2013. Pinellas County Tax Collector https://www. pinellas.county-taxes.com/ Accessed 27 August 2013. Westfield Group, Supplemental Information Report, 31 December 2012, p. 17. 139. Pinellas County Principal Property Taxpayers, Pinellas County Comprehensive Annual Financial Report 2012, p. 150 140. This estimate is based on applying the aggregated tax rate for each property based on the tax bills. 141. Broward County Principal Property Taxpayers, Broward County Comprehensive Annual Financial Report 2012, p. 111 142. This estimate is based on applying the aggregated tax rate for each property based on the tax bills. 143. Sarasota County Property Appraiser http://www.sc-pa.com/ testsearch/Search/Index Accessed 22 August 2013. 144. Pinellas County Property Appraiser http://www.pcpao.org/ Accessed 27 August 2013. Pinellas County Tax Collector https://www. pinellas.county-taxes.com/ Accessed 27 August 2013. 145. Lake County Property Tax Search http://apps01.lakecountyil.gov/sptreasurer/collbook/collbook2.asp Accessed 3 September 2013. Westfield Group, Supplemental Information Report, 31 December 2012, p. 17. 146. Lake County Principal Property Tax Payers, Lake County Comprehensive Annual Financial Report 2012, p. 129 147. This has been calculated by applying the tax rate reported on the tax bill. 148. County of Du Page Property Lookup http://www.dupageco.org/PropertyInfo/PropertyLookup.aspx Accessed 29 August 2013. Westfield Group, Supplemental Information Report, 31 December 2012, p. 17. 149. Du Page County Principal Property Tax Payers, Du Page County Comprehensive Annual Financial Report 2012, p. 308 150. This has been calculated by applying the tax rate reported on the tax bill. 151. Cook County Assessor’s office http://www.cookcountyassessor.com/Property_Search/Property_Search.aspx Accessed 3 September 2013. Cook County Property Tax http://www.cookcountypropertyinfo. com/Pages/PIN-Search.aspx Accessed 3 September 2013. Westfield Group, Supplemental Information Report, 31 December 2012, p. 17. 152. Lake County Principal Property Tax Payers, Lake County Comprehensive Annual Financial Report 2012, p. 129 153. This has been calculated by applying the tax rate reported on the tax bill. 154. County of Du Page Property Lookup http://www.dupageco. org/PropertyInfo/PropertyLookup.aspx Accessed 29 August 2013. 155. Cook County Assessor’s office http://www.cookcountyassessor.com/Property_Search/Property_Search.aspx Accessed 3 September 2013. Cook County Property Tax http://www.cookcountypropertyinfo. com/Pages/PIN-Search.aspx Accessed 3 September 2013. 156. Stark County Auditor http://ddti.starkcountyohio.gov/ Search.aspx Accessed 4 September 2013. 157. Westfield Group, Supplemental Information Report, 31 December 2012, p. 17.
  • 158. Annual Information Statement, County of Stark, Ohio, General Obligation (Limited Tax) Various Purpose Bonds, Series 2010, p. 27. 159. Fiscal Officer Cuyahoga County: http://fiscalofficer. cuyahogacounty.us/AuditorApps/real-property/REPI/default.asp Accessed 4 September 2013. 160. Westfield Group, Supplemental Information Report, 31 December 2012, p. 17. 161. The tax rate of 9.31% has been applied according to the tax bill and based on 35% of the fair value, in line with Ohio state property tax regulations. 162. Cuyahoga County Annual Information Statement in Official Statement of the County of Cuyahoga. General Obligation (Limited Tax), Capital Improvement and Refunding Bonds, Series 2012, p. 36. 163. Auditors Real Estate Information System Lucas County http://maps.co.lucas.oh.us/areis/areis.asp Accessed 4 September 2013. 176. 2012-2013Assessor’s Annual Report, Office of the County Assessor (Santa Clara County), p.5, Largest Taxpayers 2012-2013. https://www.sccassessor.org/index.php/forms-and-publications/annual-report/item/105-annual-report-2012-2013; Westfield Mall is ranked as the 7th largest taxpayer with $9.8 million in taxes paid. A review of taxes paid on the Westfield owned parcels indicates $10 million in taxes paid. 177. Westfield Group, Supplemental Information Report, 31 December 2012, p. 17. 178. Borough of Paramus Tax Assessor http://tax1.co.monmouth.nj.us/cgi-bin/prc6.cgi?menu=index&ms_user=paramus&passwd=modiv&mode=12&district=0246&selcount=0201 Accessed 22 August 2013. 179. ‘Appendix: Economic and Demographic Information Relating to the Borough of Paramus’, Borough of Paramus, County of Bergen, New Jersey Serial Bonds (Series 2013), p. A-4. 180. This estimate is calculated by applying the average tax rate determined by the tax bill. 164. Westfield Group, Supplemental Information Report, 31 December 2012, p. 17. 181. Westfield Group, Supplemental Information Report, 31 December 2012, p. 17. 165. Auditors Real Estate Information System Lucas County http://maps.co.lucas.oh.us/areis/areis.asp Accessed 4 September 2013. The tax rate of 8.57% has been applied according to the tax bill and based on 35% of the fair value, in line with Ohio state property tax regulations. 182. Lake County Real Property search http://in-lake-treasurer2.governmax.com/collectmax/collect30.asp Accessed 4 September 2013. 183. ‘Appendix: General Information,’ Lake County Public Library General Obligation Refunding Bonds of 2013, p. A-19 166. Auditors Real Estate Information System Lucas County http://maps.co.lucas.oh.us/areis/areis.asp. Accessed 4 September 2013. The tax rate of 8.57% has been applied according to the tax bill and based on 35% of the fair value, in line with Ohio state property tax regulations. 184. This estimate is based on applying the tax rate of 3.0569% as reported on the tax bill. 167. Auditors Real Estate Information System Lucas County http://maps.co.lucas.oh.us/areis/areis.asp. Accessed 4 September 2013. 168. Washington Local School District, Five-Year Forecast, May 2012. http://www.washloc.k12.oh.us/treasurer/upload/5-Year-Forecast-May-2012.pdf. Accessed 24 September 2013. 169. Washington Local School District, Five-Year Forecast, May 2010. http://www.washloc.k12.oh.us/treasurer/upload/wls_5yr_ forcast_201010.pdf. Accessed 24 September 2013. Emphasis in the original. 185. Westfield Group, Supplemental Information Report, 31 December 2012, p. 17. 186. County of Gaston, North Carolina General Obligation Refunding Bonds, Series 2013, p. 22 187. County of Gaston, North Carolina General Obligation Refunding Bonds, Series 2013, p. 22 188. This estimate is found by applying the 2012 tax rate of 1.365% reported by Gaston County, http://www.gastongov.com/docs/ tax-office/2012-tax-rates.pdf?sfvrsn=2 Accessed 18 September 2013. 170. http://www.calorganize.org/sites/default/files/ Don%27t%20Get%20Malled%20by%20Westfield%20Report.pdf 171. On August 29,2013, Westfield released The HALF YEAR RESULTS ENDED 30 JUNE 2013: Appendix 4D. 172. http://corporate.westfield.com/wp-content/uploads/2013/08/WDC-13HY_Appendix_4D-2908131.pdf Property values on all Westfield’s global properties in this report were only reported by region and not by property as in the previous half year and full year reports. 173. “It’s a Mall World”, Los Angeles Magazine, June 1, 2012. http://www.lamag.com/columns/business/story.aspx?ID=1700394 174. County of Los Angeles, California, Comprehensive Annual Financial Report, Fiscal Year Ended June 30, 2012, p.174. Principal Property Taxpayers, June 30, 2012. http://ttc.lacounty.gov/proptax/ docs/LA%20County%20CAFR%20for%20FY%20Ended%20June%20 30,%202012_Final.pdf 175. San Diego County’s list of largest taxpayers shows that after two utility companies, the Irvine Company paid $17 million, the combined tax paid by Westfield’s San Diego properties appears to be $17.5 million. http://www.sdcounty.ca.gov/auditor/trb1213/docs/ largesttaxpayers.pdf 51
  • For more information contact westfieldwatch@unitedvoice.org.au Copyright 2013