As vacancy rates in Pennsylvania malls pile up and mall owners face a vexing real estate problem, state lawmakers are trying to help steer the future of these properties. The Pennsylvania House passed a bill to allow local municipalities to enact a property tax abatement for 10 to 15 years if mall properties are redeveloped with multiple uses, which could include housing, commercial and industrial. Written by state Rep. Josh Siegel (D-22), the Economic Development and Mixed-Use Redevelopment of Shopping Malls Act (HB1799) has 20 sponsors, including eight from Philadelphia and its collar counties. It is now headed to the Senate. “It is in the public interest to promote redevelopment of these large parcels and return them to function in accordance with sound and approved plans for their redevelopment that will promote public safety, convenience and welfare,” the bill reads. Siegel intentionally wrote the bill with a loose definition of shopping mall, allowing redeveloped strip malls and shopping centers to also qualify for the tax abatement. The abatement would relate only to the improvements made on the property, meaning taxes would still need to be paid based on the property assessment before the improvements are made. The length and amount of the abatement could also be customized by each taxing jurisdiction. If a municipality implements a full abatement, that would mean the improvements from the redevelopment would be exempt from property taxes for 10 years. The Pennsylvania Association of Realtors supports the bill.
Source: Philadelphia Business Journal; 4/23/2024