When the largest shopping mall operator in the United States acquired Opry Mills in 2007, it paid $379 million in property taxes, according to Simon Property Group’s most recent annual report.
Ten years later, after the mall was flooded and rebuilt, the Davidson County Property Assessor’s office valued the property at $334 million. But Simon appealed and won a 10 percent reduction, which meant annual tax savings for the conglomerate of more than $430,000.
Opry Mills, the land and shopping center by the Cumberland River, was one of about 1,000 high-value commercial properties whose owners successfully appealed the 2017 Nashville reassessment. Those commercial properties accounted for more than 80 percent of the county’s total reduction in assessed value, according to a Tennessean analysis of assessment data.
Successful appeals last year exceeded expectations, and Metro Nashville and government is now grappling with a property tax shortfall of between $20 and $25 million.
It comes when the city is financially strained, with its school district losing millions in state funding, a government-wide hiring freeze and an underfunded safety-net hospital.
Large properties are tough to appraise
Major commercial landowners were able to win big concessions on their property, experts say, because the reassessment hit during a booming real estate market, while swaths of Nashville were redeveloping — making it difficult for county assessors to capture market values. Also, large properties are tough to appraise, since there are fewer similar comparisons.
On average, commercial properties valued at more than $1 million, that won appeals, received a 20 percent reduction in assessed value, the analysis showed. These include some of the city’s biggest apartment complexes, hospitals, parking garages and shopping centers. That’s slightly more than the average for all commercial properties, and greater than the 13 percent average for residential properties.