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The Central Dauphin School Board has tentatively agreed to freeze the real-estate assessment of the Harrisburg East Mall, a move that could lead to major renovations at Harrisburg's first indoor mall.
The board voted 7-0 last week to freeze the mall's property assessment for 10 years if a proposed buyer renovates the mall, which is about to lose a major tenant for the second time in two years.
Swatara Twp. had tentatively agreed to the freeze earlier this month.
Dauphin County, which also collects real-estate taxes on the mall, has not voted on the issue, a county spokeswoman said.
A potential buyer, Feldman Equities Inc. of Manhasset, N.Y., had proposed the freeze as an incentive to renovate the mall and attract major stores.
Feldman Equities has signed a contract to purchase the mall from Prudential Insurance Co. of America, which took possession through bankruptcy proceedings in 2000, for a price between $17 and $20 million.
The freeze also would end an appeal of the mall's real-estate assessment by Prudential, officials said.
Prudential had filed an appeal with the Dauphin County Board of Assessment Appeals, claiming the mall is worth less than its $35.6 million assessment. Prudential had sought to reduce the assessment to about $18 million, officials said.
The mall, which opened in 1969, lost J.C. Penney in 2001, and the owner of Lord & Taylor has announced it will close its store there. Employees of Lord & Taylor have been told the closing could come two months to two years from now.
The school board has tentatively agreed to the freeze to entice Feldman Equities to renovate the mall, which could bring jobs to the district, according to board President Michael Mausner. The board also wants to avoid the challenge to the mall's real-estate assessment, he said.
"We feel this could be a very good opportunity to create a lot of jobs and protect the interests of all the taxpayers to work with the developer to revitalize that area," Mausner said.
If the value of the mall reaches about $50 million during the 10-year period as a result of the renovations, the school district, township and county would be able to collect increased real-estate taxes based on its improved value, according to the tentative agreement.
No formal agreements have been signed by the school board. The vote was taken to publicly show the board's support for the concept, Mausner said.
The school board, township, county and state have been working with Feldman Equities to reach an agreement, Mausner said.
Eric Gerard, a spokesman for Feldman Equities, called the school board's vote "great news."
"Everybody has worked very diligently to make this deal happen," Gerard said.
Feldman Equities owns about 1.5 million square feet of retail and office space in Arizona and Florida. Harrisburg East Mall would be its first property in Pennsylvania.
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