The Future of Connecticut Malls: The Economic Impact
WATERBURY, CT (WFSB) - The I-Team continues to look into the future of Connecticut’s malls. Whether or not you shop at a mall, if you live or work near one, that mall’s health impacts your wallet. That’s because as the value of malls decline, the tax burden shifts to homeowners. The I-Team looked into how this is playing out in Waterbury.
The Brass Mill Center is right off I-84 and welcomes people into the Brass City. Not everyone sees it as a warm welcome.
“It’s not like it used to be. There’s nothing to look forward to. Not even the food is good,” said Anamaria Irias.
Anamaria Irias and her husband recently took over the former Fatso’s Pizza and Grill. They are turning it into a place for Hispanic food that will be called La Cebollita.
“There’s not a lot of Hispanic food here. A lot of Central American food, so we wanted to expand more of our culture, nature,” said Irias.
The restaurant is on Main Street which is just outside of Brass Mill Center. They feel the effects of the mall’s success, or lack thereof.
“If the mall sucks, everything goes down with it too,” said Irias.
“The mall is suffering the same fate lots of malls have suffered. Retail is down everywhere,” said Waterbury mayor Paul Pernerewski.
It can be difficult to measure exactly how much malls across the state have changed. However, one way is to look at how much the towns value them, otherwise known as their tax assessment. Every 5 years towns re-calculate how much a property is worth.
In 2017, the main portion of the Brass Mill Center was valued at $68,516,370. In 2022, the value dropped almost 65% to $24,104,010. Waterbury’s tax assessor attributes the drop to changing market conditions.
That matters because that means the mall’s tax bill also dropped.
The owners went from paying $4,125,370.64 a year to the city to now paying $1,306,196.39 a year.
The I-Team asked Pernerewski what impact that has on the city of Waterbury.
“Because of an influx of folks from New York during Covid that has continued on, who are willing to pay what I think are extraordinarily high prices for our residences, we’ve had a shift from commercial property to residential property,” said Pernerewski. “Homeowners are unfortunately paying more in taxes while for some businesses the tax rates have come down at this point because of that shift. It’s not like there’s a hole of 3 million dollars because of all the shifting that’s going on there.”
Waterbury is just one example. The tax bills have been cut significantly at many malls all across the state.
In Meriden, the mall’s tax bill dropped more than 80% from $2,124,430 in 2018 to $363.511.52 in 2021.
In Waterford, the tax bill went down more than 50% from $851,803.76 in 2017 to $423,050.46 in 2022.
Mohammad Elahee is a professor of international business at Quinnipiac University.
“Those property taxes play a very important role in keeping the local governments running. I am afraid that if the malls do not re-invent themselves, then local governments will suffer more,” said Elahee. “In 2020, when we got hit by COVID, that resulted in receiving a lot of federal money, but that money is no longer there. The local governments have to find a way to raise more tax revenue, and where will that revenue come from?”
Elahee explains how malls impact the economy in other ways too.
“When people go and buy from malls, that generates lots of sales tax. Plus when a mall is established, lots of smaller stores spring up around the malls, more people go and buy, they spend money,” said Elahee.
Waterbury mayor Paul Pernerewski says there is only so much the city can do about the Brass Mill Center because the city doesn’t own it. The mall is owned by Kohan Retail Investment Group.
“Eventually, I think you’re going to see some of the malls getting re-purposed, but as of right now that doesn’t seem to be on the current owner’s radar. We don’t own it, so we’ll work with them on what they want to do,” said Pernerewski.
For now, Pernerewski is focusing on what the city can control: growing other parts of the city.
“We’re pushing very heavily to redevelop the downtown area. We’re going to continue to attract developers down there who are willing to come in and refurbish,” said Pernerewski.
Back on Main Street, Irias is also focusing on what she can control: cooking up good food. However, she can’t help but wonder what business would look like if the mall was full again.
“If that mall changes, you guys bring in more stores and everything, I think it’s going to make a big difference,” said Irias.
The I-Team reached out to Kohan Investment Group to ask about its plans for the Brass Mill Center, but we have not heard back.
This story is the second installment of a 5-part series looking into the future of Connecticut malls.
Part 5: The keys to success at Westfarms
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