Highlands School District considering tax appeal settlement with the Highlands Mall

The Highlands School District could reap a tax windfall of $28,000 if the board accepts an assessment appeal settlement proposal from the owners of the Highlands Mall, the 15-store shopping plaza off of Freeport Road.

The district also would earn more tax income each year going forward.

The Highlands Mall is assessed at $3 million despite a September 2022 sale of the parcel for $6.6 million.

Property owners NGI LLC were billed in 2023 and 2024 for about $76,800 in real estate taxes — a figure the district believes should be significantly higher. The school district appealed the assessment in Allegheny County Court, and Ryan Notzen, the district’s tax attorney, negotiated with NGI to reach the proposed settlement.

Taxes would climb to about $91,000 a year if the board approves the deal during its next meeting at 7 p.m. Monday.

In a memo to the district, Notzen said the mall had 15 active tenants and was 100% occupied prior to the most recent sale.

The parcel doesn’t include the adjacent Walmart or the five outbuildings near Freeport Road.

The Highlands Mall is anchored by Dunham’s Sports and includes a nail salon, liquor store and Dollar Tree, among others.

Notzen said Dunham’s comprises nearly half of the rentable space. The company renewed a five-year lease in 2022.

During negotiations, the company’s attorney provided a quote for extensive roof work that is necessary to fix ongoing leaks, Notzen said.

“The current owner knew the roof was old and would need to be replaced before it purchased the property but underestimated the significance of the repairs,” Notzen wrote in the memo.

The repairs are estimated at nearly $900,000.

NGI could not immediately be reached for comment.

Because of the extensive repairs, Notzen said, NGI attorneys proposed settling at a value below the purchase price to help offset costs and, in return, agreed to accept a fair market value at the purchase price for 2024 and all subsequent years.

It would set the fair market value at $5.6 million in 2023 and $6.6 million in 2024.

“This still reflects an increased assessment for both years,” Notzen wrote.