Baker Hill Road District Takes Mall to Court Over Back Taxes
LANESBOROUGH, Mass. — The Baker Hill Road District has taken a new tactic to secure back taxes from the Berkshire Mall.
On Dec. 7, the district filed a lawsuit in Berkshire Superior Court against Berkshire Mall Realty Holdings seeking $276,859 plus interest from the property. The request is for taxes owed to the district for the first two quarters of the fiscal year.
By filing a suit for breach of contract instead of the typically used tax lien, Baker Hill Road District's attorney Mark Siegars is hoping to receive a quicker judgment.
"You don't see a lot of towns do it," Siegars said of the action.
Siegars said the Baker Hill Road District and the town of Lanesborough had gone through the property lien process in the past to get the Berkshire Mall to pay back taxes on multiple occasions since the Kohan Retail Investment Group purchased the property in 2016.
That process, however, took a long time and the district wouldn't receive payment until close to the end of the fiscal year.
"It is very disruptive to the district's finances," Siegars said of the delay in payment. "[The district] doesn't want to have to keep waiting. We're hoping this is a faster way to get the money."
Siegars said the mall is the biggest taxpayer for the Baker Hill Road District, an entity that was created years ago to maintain the Connector Road as a public way. With the mall running behind schedule with payments, cash flow becomes tight, he said. He said the district has routinely had to handle multiple phone calls with the state Department of Revenue every year to explain the lack of revenue.
On Dec. 19, Judge Daniel Ford also approved Baker Hill's motion to place a writ of attachment against the property to essentially secure Baker Hill's money until the case is resolved. That was granted after the mall did not file a response nor attend a hearing scheduled for that day.
The suit lists two counts of breach of contract. On the first count, Baker Hill said the town's tax collector bills for the seven parcels that make up the mall for a total of $138,429.50 that was due by Aug. 1. The district said the Berkshire Mall failed to pay that bill. The district is now seeking the court to order payment plus interest.
The second count alleges that a bill for the same amount of was issued due on Nov. 1 and that, too, has gone unpaid. The lawsuit reads that "historically, since 2016, when BMRHC acquired the mall, it has regularly been delinquent paying taxes owed to the district timely."
The writ of attachment to secure payment approved by Ford the $274,000 of the principal owed, slightly less than the district had asked. That motion was approved after the Berkshire Mall did not file a response or attend the hearing scheduled for that day.
"If the property is sold or changes hands, somebody has to satisfy your interest," Siegars said of the attachment.
Siegars said the bills were for the first two quarters of this fiscal year. He said the third quarter bills are being mailed by the end of the month. Siegars said the next court date hasn't been established yet.
The move is very much like what private entities have done. In back-to-back years, those contracted to plow the Berkshire Mall's parking lot ultimately took Berkshire Mall Realty Holding to court and both sought attachments and then later executions of judgment.
Kohan has a reputation, both locally and nationally, for falling behind on taxes and then paying at the last minute. Earlier this month Kohan paid delinquent taxes just before a deadline for a mall in Iowa, preventing the property from going to auction.
Tags: Berkshire Mall, delinquent taxes, lawsuit, superior court,
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