Westfield two faces

Westfield’s Two Faces:
Community Consequences
of Tax Avoidance

by United Voice

United Voice one of Australia’s
largest unionsis a union of
workers organising
to win better
jobs, stronger
communities, a
fairer society and a
sustainable future.

United Voice has issued this report after a broad and
ongoing examination of Westfield’s global corporate
social responsibility track record. United Voice
believes that multi-national companies should have a
positive impact in all of the communities in which they
operate. Global trade unions, civil society groups and
governments are increasingly focused on the issue of tax
avoidance by multi-national companies.
Given that Australia will chair the G20 in 2014 and that
corporate tax avoidance is on the agenda, United Voice
believes that it is crucial that Australian companies
operating globally show leadership in paying their fair
share of taxes. United Voice previously prepared a report
on Westfield’s property tax avoidance in California and
has commissioned a report on Westfield’s tax avoidance
in the UK.
United Voice is pleased to work with community and
union partners in the US to encourage Westfield to
genuinely support the communities in which it operates.
Westfield must do better and pay its fair share.

Published December 2013

Westfield’s Two Faces: Community
Consequences of Tax Avoidance
Contents

Executive Summary...................................................................................................................................................4
US Property Taxes in Context.................................................................................................................................10
Is Aggressive Tax Avoidance Short-Changing US Communities?...........................................................................12
Westfield Appeals to Minimize its Property Tax Obligations.................................................................................16
.
Westfield’s Impact on Los Angeles Schools............................................................................................................20
Sidebar: Westfield’s Give Back to School Campaign..............................................................................................21
The Impact of School Budget Cuts in Montgomery County..................................................................................22
Challenging Commercial Property Tax Abuse........................................................................................................24
Washington State....................................................................................................................................................26
Snapshot: Westfield in Washington....................................................................................................................26
Westfield Appeals to Increase its Profit Margins................................................................................................27
Connecticut.............................................................................................................................................................28
Snapshot: Westfield in Connecticut. ..................................................................................................................29
.
Maryland.................................................................................................................................................................29
Snapshot: Westfield in Maryland........................................................................................................................30
Florida.....................................................................................................................................................................31
Snapshot: Westfield in Florida............................................................................................................................33
Reassessments in Florida....................................................................................................................................33
Illinois......................................................................................................................................................................34
Snapshot: Westfield in Illinois.............................................................................................................................34
Reassessments in Illinois.....................................................................................................................................35
Ohio........................................................................................................................................................................36
.
Snapshot: Westfield in Ohio...............................................................................................................................37
California.................................................................................................................................................................38
Short-Changing Los Angeles..............................................................................................................................38
Short-Changing San Diego.................................................................................................................................38
Short-Changing San Jose...................................................................................................................................38
Snapshot: Westfield in California. ......................................................................................................................39
.
Other States............................................................................................................................................................40
New Jersey.........................................................................................................................................................40
Indiana................................................................................................................................................................40
North Carolina....................................................................................................................................................40
Conclusion. .............................................................................................................................................................41
.
Appendix: National Summary of Westfield’s Property Taxes. ................................................................................42
.
Endnotes.................................................................................................................................................................46

3

Executive Summary
This report examines how one multinational company, the Westfield Group, lowers its contribution to
local communities in the United States by aggressively avoiding property taxes. The Westfield Group, a
shopping mall company, provides a clear example of a broader problem of large corporations not paying
their fair share of taxes. Local communities rely on property taxes to help fund local schools, public safety,
parks, libraries and many other essential local services. However, some large corporations avoid paying
their fair share, with dramatic consequences for local communities.
The Westfield Group, based in Australia with properties in four countries, is one of the largest shopping
mall owners and operators in the US. It is among the largest property taxpayers in many of the
communities in which it operates. Nevertheless, an examination of 45 properties owned by Westfield
indicates that the company has aggressively sought to lower the assessed values of its properties in order
to pay less tax, while reporting much higher values to its shareholders.
On average, Westfield pays tax on just 60% of the reported shareholder value of its US properties.
While the appraised value – assigned by local taxing authorities – of all 45 properties is $10.5 billion,
the shareholder-reported value of the portfolio is $17.4 billion. The total amount of property tax that
Westfield annually avoids paying by these methods is $116.4 million.1 To truly understand the impact
of this lost tax revenue, we have estimated that this unpaid tax could directly fund an additional 1,536
teachers across 41 school districts nationally – and many other local public services.2

Number of teachers that could be funded
by the tax lost on Westfield properties
State

% of Tax
Designated to
Schools3

Starting Teacher
Salary4

Number of
Potential Teachers

Washington

$8.9

50%

$36,474

122

Florida

$12.3

45%

$35,236

145

Ohio

$14.2

50%

$33,035

215

Illinois

$11.6

67%

$36,636

213

Maryland

$5.6

51%

$43,003

67

California

$41.2

50%

$41,131

501

Connecticut

$1.2

50%

$42,450

14

New Jersey

$17.1

59%

$48,101

209

Other

$4.3

44%

$32,177

50

NATIONAL TOTAL

4

Tax Loss ($m)

$116.4

51%

$38,694

1,536

In most states, appraised values are
supposed to reflect current market
values. In the states where that is not
the case, adjustments have been made
and the methodology is explained in
more detail throughout the Report
and in the endnotes. While it appears
that Westfield’s aggressive appeals on
appraised property values are the key
driver in reducing tax revenue for local
communities, there are other factors
as well.
A more comprehensive review of
appeals filed by Westfield would likely
show an even greater gap in values it
claims than the gaps discussed in this
report between appraised values and
shareholder values. Additionally, some
of Westfield’s tax bills may be reduced
by property tax abatements and other
properties may be subsidized by the
diversion of property tax through tax
increment financing (TIF) districts;
both are economic development
subsidies commonly given to large
retail properties in the US. In some
instances, local taxing authorities may
not have done recent reassessments.
While the national figures are
startling, some individual examples
demonstrate just how much localities
are being short-changed. Westfield
Belden Village in Canton, Ohio is
currently assessed by the local county
at $20.2 million, or just 10% of the
2012 reported shareholder value
of $210.9 million. The difference
between these two figures means that
schools and other public services lose
approximately $4.5 million annually.5
Westfield Hawthorn in Vernon Hills,
Illinois is currently assessed at $59
million, or 32% of the 2012 reported
shareholder value of $183 million.
Public services lose an estimated $3.7
million in annual tax dollars.6

5

The largest amount of lost tax revenue, however, occurs in Paramus, New Jersey,
where the Garden State Plaza is assessed at $670.8 million, or 40% of the 2012
reported shareholder value of $1,683 million. The estimated tax loss on this
property is $17.1 million.7
The recent sale of seven Westfield properties to Starwood Capital Group in
September 2013 indicates that Westfield’s shareholder-reported values are
far more accurate in representing true market value than county-assessed
values. Seven malls were sold for $1.64 billion, which was 93% of Westfield’s
reported shareholder value. Since Westfield retained a 10% interest in all of
these properties, the sale price was therefore slightly higher than the reported
shareholder value.8
Property taxes are particularly important for the funding of local school districts;
they are still the largest single source of revenue for local school budgets.
Shortfalls in budgets are often felt through layoffs of teachers, hiring freezes,
increased class sizes, and reductions in art, music and sports. Moreover, the
capacity for schools to provide for the neediest students – those with intellectual
or learning disabilities and those who require language support – can be severely
affected.9
Traditionally companies have justified tax avoidance by citing an obligation
to maximize shareholder returns. Increasingly, however, these arguments are
falling short of investor expectations as tax avoidance is recognized as a serious
reputational risk to companies like Westfield.10 Challenging property tax avoidance
in the US is not merely the responsibility of shareholders or joint venture partners.
Across the country, school boards and other local authorities are coming up with
innovative ways to challenge property assessments. Recently, school districts
in Pennsylvania have sought legal representation to help defend against large
appeals by corporate property taxpayers.11 In Ohio, the Washington Local School
District was successful in preventing the lowering of the assessment of Westfield’s
Franklin Park Mall down from $256 million to $109 million.12 Reforms of the
property tax system are also being proposed in states across the country to tackle
abuse and fraud in the assessment of commercial properties.13
As school budgets are increasingly tightened and the gap between appraised and
shareholder values widens, the imperative for local counties and school boards to
take these actions grows. This report provides local communities with a summary
of how Westfield has successfully avoided paying its fair share of property tax in
twenty-seven counties across ten states. The information contained herein can be
considered by school boards and other local authorities when responding to future
budget shortfalls.

Local communities deserve more.
Westfield has two stories for all properties,
but only one is true.

6

There are just so many
domino effects that I
think sometimes people are
not aware of when budgets
are not funded to their full
capacity. So, I am asking my
legislators to really consider
and work very hard and on our
behalf to restore the health
of the fiscal budget and to
maintain the effort that we’re
supposed to have to educate
our kids year by year.

Eboni Walker

Kindergarten Teacher
Montgomery County, Maryland.14

7

National Summary
State

Number of
Malls

Shareholder
Value ($m)

Appraised
Value ($m)

% Taxed

Tax Loss
($m)

Washington

$1,082.3

$462.0

43%

$8.9

Florida

6

$1,234.1

$613.2

50%

$12.3

Ohio

3

$673.5

$361.3

54%

$14.2

Illinois

3

$932.6

$569.9

61%

$11.6

Maryland

3

$1,469.1

$949.1

65%

$5.6

California

21

$9,348.7

$6,146.0

66%

$41.2

Connecticut

3

$689.3

$618.6

90%

$1.2

New Jersey

1

$1,683.6

$670.8

Other

2

$320.3

$155.1

48%

$4.3

NATIONAL TOTAL

8

3

45

$17,433.5

$10,546.0

60%

$116.4

$17.1

Westfield’s US Portfolio
The Westfield Group, with 21,856 retailers in 9.6 million square meters of retail space, owns and
operates 99 malls in Australia, New Zealand, the United States and the United Kingdom, making it
one of the world’s largest shopping center portfolios.15 Westfield (WDC) is headquartered in Sydney
and is one of the largest companies listed on the Australian Securities Exchange. In 2012, Westfield
malls had more than 1.1 billion customer visits which generated $39 billion in retail sales. Westfield
valued its global property portfolio to shareholders at $63 billion.16 In 2012, Westfield made a net
profit of $1.67 billion and was managing an $11.7 billion development pipeline of new projects.17
By most measures, the United States is the company’s largest and most important market. Fortyseven of the company’s malls are in the US (compared to 38 in Australia, the next largest market)
and 54% of total gross leasable space is in the US.18 In the first half of 2013, the US market
accounted for 42.4% of total net property income,19 and 46.5% of the value of the company’s
development and construction projects in progress.20

Washington
California

Connecticut
Illinois
Indiana
Ohio

New Jersey

Maryland
North
Carolina
Florida

9

US Property Taxes
in Context
While there are significant variations from state to state on how property taxes
are collected, it is generally the single most important source of revenue for
local governments. Schools are usually the largest single expense for local
governments, but local property taxes frequently pay for other social services,
including police, fire, parks and libraries.21 In general, state law establishes
the method of determining property tax assessments and rates. Tax rates
are set by state and/or local authorities. County officials are responsible for
actual assessments, collections and distribution of the pre-determined share
of property taxes to other local government entities with taxing authority,
including school districts.22 A county assessor or appraisal board determines
the assessed value of all parcels of land, including any buildings or other
improvements. An annual property tax bill is distributed to all property owners
with the appropriate tax rates for the location of the property applied to the
current assessed values. Typically, the assessed value should be the same as
market value, and, in most states, property sale prices are used to set new
assessed values.
In most, if not all, jurisdictions, there is a process to contest assessed
values. While the objective may be to ensure fairness, the outcome is often
the opposite. In most places, average homeowners agree to pay their
assessed rates and have neither the money nor time to effectively challenge
assessments. On the other hand, many commercial property owners and
wealthy homeowners systematically appeal assessed property values in order
to lower their property tax payments.23 Additionally, some companies have
been successful in securing economic development subsidies which diverts tax
revenue to finance their operations.24 These tactics result in short-changing
schools and other essential local government services and unfairly increasing
the tax burden for average homeowners. Assessed values on commercial
properties can be lowered by withholding critical information, providing false
information, threatening legal action or providing ‘expert’ information from
hired ‘tax agents’ that is difficult for a county assessor with a limited budget
and a large case-load to challenge. This process is frequently subject to
widespread abuse.
Westfield appears to have a highly successful record of lowering the assessed
values of its properties in the US with no apparent regard to the impact on
funding for local schools and other public services. In the analysis below,
an effort has been made to account for differences in methodologies for
determining assessment of commercial property values in different localities
and those different methodologies are explained in the text or endnotes.

10

Companies like Westfield often justify tax avoidance on the basis of
their obligation to maximize returns to shareholders and investors by
minimizing their tax burden. Nevertheless, a changing global investment
environment is raising a serious challenge to this attitude, suggesting
that corporate behemoths like Westfield could stand to lose shareholder
support unless it meets its social obligations. A global poll conducted
in April 2013 indicates that 85% of global citizens support the
introduction of measures to prevent corporate tax avoidance by
multinational corporations. The result was highest amongst citizens of
the UK, 96% of whom supported taking action against multinational
tax evasion.25 In August 2013, the world’s biggest investor, Norway’s
Soverign Wealth Fund described tax evasion as one of their greatest
concerns. The fund indicated that tackling tax evasion would become
a focus area for them and form part of their investment choices in the
future.26 Meanwhile, in September of this year, a top British law firm issued
legal advice to leading British companies that they can no longer claim
the right to avoid tax on the grounds of increasing shareholder returns.27
It is normal that there would be some difference in the fair value of
investment properties as reported to shareholders and the assessed value
determined by local tax assessors. However, in the case of Westfield the
scale of that difference is stunning.
Westfield states the following as its methodology to determine fair value:
‘Investment properties are carried at the Directors’ determination of
fair value which take into account latest independent valuations, with
updates at each balance date of independent valuations that were
prepared previously. The carrying amount of investment properties
comprises the original acquisition cost, subsequent capital expenditure,
tenant allowances, deferred costs, ground leases, straight-line rent and
revaluation increments and decrements. Independent valuations are
conducted in accordance with … [the] Uniform Standards of Professional
Appraisal Practice for the United States properties. The independent
valuation uses capitalization of net income method and the discounting of
future net cash flows to their present value method.’28
If Westfield denies the vast discrepancies between the fair value and the
current assessed value of its US investment properties, then it should be
willing to share the independent valuations, with any updates provided to
local property tax assessors.

11

Is Aggressive Tax
Avoidance Short-Changing
US Communities?
This report provides an in depth comparison between the taxed value of Westfield’s US properties and the
value that it reports to shareholders. The comparison demonstrates that in the majority of cases, Westfield
is avoiding paying its fair share in property tax. Property values are appraised at the local county or city
level in order to calculate how much tax property owners are required to pay. Appraised values are meant
to reflect the fair market value – or the price at which a property would be sold if it was put on the market
today – and therefore we should expect to see relatively little difference between the value assessed by the
local county assessor and the value Westfield reports to its shareholders. However, the appraisal process
is also subject to appeals, and this report demonstrates that Westfield has been extremely successfully
in negotiating property appraisals well below the fair market value of its properties according to its
shareholder reports. The net result of this is that local communities miss out on much needed tax revenue.
We have compared the assessed value to the reported shareholder value of 45 properties in Westfield’s
US 2012 property portfolio.29 Our analysis shows that on average Westfield is only paying tax on 60% of
the reported shareholder value. While the appraised value – determined by local taxing authorities – of the
total US portfolio is $10.5 billion, the shareholder value of the portfolio is $17.4 billion. The total amount of
property tax that Westfield avoids paying annually is $116.4 million.

State

Number of
Malls

Shareholder
Value ($m)

Appraised
Value ($m)

% Taxed

Tax Loss
($m)

Washington

$1,082.3

$462.0

43%

$8.9

Florida

6

$1,234.1

$613.2

50%

$12.3

Ohio

3

$673.5

$361.3

54%

$14.2

Illinois

3

$932.6

$569.9

61%

$11.6

Maryland

3

$1,469.1

$949.1

65%

$5.6

California

21

$9,348.7

$6,146.0

66%

$41.2

Connecticut

3

$689.3

$618.6

90%

$1.2

New Jersey

1

$1,683.6

$670.8

Other

2

$320.3

$155.1

48%

$4.3

NATIONAL TOTAL

12

3

45

$17,433.5

$10,546.0

60%

$116.4

$17.1

In the majority of cases examined,
Westfield already ranks amongst the
top ten taxpayers within each local
taxing jurisdiction. This means that
Westfield’s alleged tax avoidance has a
major impact on the funding of schools
and local communities. This report
demonstrates that if Westfield paid tax
according to the fair values reported
within its shareholder reports, it would
rank as the largest taxpayer in 9 local
taxing jurisdictions and in the top three
in 16 jurisdictions. Additionally, paying
tax on its fair value would elevate some
Westfield properties that aren’t even
recorded amongst the top taxpayers in
a particular county – notably in Illinois –
to being the second largest taxpayer in
those jurisdictions.
Although Westfield’s actions may
be legal, its evasion of its local
responsibility to the communities in
which it operates places a heavier
burden on homeowners and small
business to cover the costs of schools
and local government services through
higher tax rates. The problem has been
particularly acute in recent years with
declines in home values and significant
funding shortfalls for schools and local
governments due to the economic
downturn. The tax revenue lost on all
of Westfield’s properties would directly
fund 1,536 teachers nationwide and
still leave nearly $60 million for other
essential local government services.30

The tax revenue lost
The tax revenue lost
on all of Westfield’s
on all of Westfield’s
properties would
US properties would
directly fund
directly fund

1,536
teachers nationwide

and
and
still leave
still leave
nearly
nearly

$60 million

for other essential

local government services

13

Number of teachers that could be funded
by the tax lost on Westfield properties
State

% of Tax
Designated to
Schools31

Starting
Teacher Salary32

Number of
Potential Teachers

Washington

$8.9

50%

$36,474

122

Florida

$12.3

45%

$35,236

145

Ohio

$14.2

50%

$33,035

215

Illinois

$11.6

67%

$36,636

213

Maryland

$5.6

51%

$43,003

67

California

$41.2

50%

$41,131

501

Connecticut

$1.2

50%

$42,450

14

New Jersey

$17.1

59%

$48,101

209

Other

$4.3

44%

$32,177

50

NATIONAL TOTAL

14

Tax Loss ($m)

$116.4

51%

$38,694

1,536

Extreme examples of
differences between
assessed and fair value:
•• Westfield Belden Village in Canton, Ohio
– assessed at $20.2 million, or 10% of
the 2012 reported shareholder value of
$210.9 million.
•• Westfield Hawthorn in Vernon Hills,
Illinois – assessed at $59 million, or 32%
of the 2012 reported shareholder value of
$183 million.
•• Westfield Brandon in Brandon, Florida –
assessed at $130.6 million, or 34% of the
2012 reported shareholder value of $388
million.
•• Westfield Southcenter in Tukwila,
Washington – assessed at $295 million,
or 39% of the 2012 reported shareholder
value of $754 million.
•• Garden State Plaza in Paramus, New
Jersey – assessed at $670.8 million, or
40% of the 2012 reported shareholder
value of $1,683 million. The estimated tax
loss on this property is $17.1 million.
•• Westfield Franklin Park Mall, Lucas
County, Ohio – the county’s second largest
property taxpayer with an appraised value
of $247.7 million33 which represents 78%
of the $318.1 million fair value reported to
shareholders.34 Despite this, the tax bills
reveal that on three of the largest parcels
in this property, the only tax Westfield paid
was a contribution towards the Toledo Area
Sanitary District Mosquito Control scheme.
We can see from this that even though the
county appraisal is relatively close to the
fair value, Westfield is still shirking its tax
responsibilities by nearly $6 million annually.

Westfield’s three Connecticut-based
properties provide an exception to
this rule. Each of these properties is
appraised at between 80% and 99%
of their reported shareholder value,
meaning that the property tax Westfield
pays in Connecticut approximates its
fair share. At the same time, all of these
properties are registered as being the
largest taxpayers in their respective
jurisdictions, reflecting how much
Westfield can contribute to communities
when it pays its fair share.
Westfield has also benefitted from Tax
Increment Financing agreements and
sales tax rebates, amongst other public
subsidies. For instance, in June 2013,
the Los Angeles City Council voted
to allow Westfield to keep up to $59
million in tax over the next 25 years as an
incentive to help them fund renovations
and the construction of a new hotel at
their Westfield Topanga site.35 Westfield
proudly boasts that this mall will provide
the City of Los Angeles with $9.7 million
in tax revenue each year.36 However,
this figure is already $3.5 million short
of the fair share the company should be
paying, excluding the tax break the city
voted on earlier this year and not taking
into account the increased value of the
property as a result of the company’s
renovations. Also in June 2013, Westfield
received a tax rebate of up to $13 million
from the City of Vernon Hills to ‘defray
the costs’ of a $50 million renovation
of its Westfield Hawthorn Mall.37 The
company is also known to have brokered
similar deals in Ohio and Missouri.38

15

Westfield Appeals to
Minimize its Property
Tax Obligations
The appraised value of commercial properties is often the result of a negotiated appeals process.
Data collected for this report indicates that Westfield has been very successful in appealing its
property appraisals at the local level. This has taken place at the same time that the overall fair
value of its US portfolio has increased, meaning that the gap between the fair value and the taxed
value grows every year, resulting in increasing lost revenue for local counties.
The Global Financial Crisis (GFC) impacted significantly on property prices across the US and
could have provided both local counties and commercial property owners with a realistic reason
to lower the assessed values of local properties. While the full history of Westfield’s appeals to
the assessed values of its properties is as yet unknown, we can assume that the impact of the
GFC on local markets would have been part of its arguments when appealing for a lowering of its
property values. When we examine the impact of the GFC on Westfield’s US portfolio according
to Westfield’s annual reports, we see that the overall value of the portfolio did fall by 5% between
2008 and 2009. Despite this, over the ensuing years, the value of the portfolio not only recovered
very quickly but currently outstrips 2008 values by 12%. As such, it appears that the GFC had a
minimal impact on Westfield’s property values.

US Portfolio Total
Value ($m) 2008-2012
$14,000.0

US Portfolio Growth 2009-2012
10%

$13,500.0

6%

6%

$13,000.0

4%

$12,500.0

0%

$11,500.0

-2%

2%

2%

$12,000.0

2009

-4%

$11,000.0
2008 2009 2010 2011 2012

16

8%

8%

-6%

-5%

2010

2011

2012

Despite this picture of Westfield’s robust recovery in the midst of a global recession, historical data
collected from seven US properties39 indicates that while Westfield’s reported shareholder values
continued to rise, overall appraised values continued to fall:

Combined Fair Value ($m) of
Combined Properties 2009-2012
Seven WestfieldFair Value ($m) of
Seven Westfield Properties 2009-2012
2400

Combined Appraised Value ($m) of
Seven Westfield Properties 2009-2012
1170
1160

2400
2300

1150

2300
2200

1140

2200
2100

1130
1120

2100
2000

1110

2000
1900
1900

2009

2010

2011

2009

2010

2011

2012

2009

1100

2010

2011

2012

2012

Moreover, when we compare the difference between reported shareholder values and appraised
values over time for these seven properties we find that the overall difference between the two has
increased over the same period. For the sample as a whole, appraised values were 62% of fair value
in 2009, compared to 53% in 2012.

Difference between Shareholder
and Appraised Values ($m) 2009-2012
1300
64%

1200
1100

62%

1000

60%

900

58%

800

Difference between
appraised value and fair
value ($m)
Appraised value as a
percentage of fair value

56%

700

54%

600

52%

500
2009

2010

2011

2012

17

Some individual
case studies help to
demonstrate exactly
how Westfield has
managed to achieve
these results:
Between 2010 and 2012, Westfield was
successful in negotiating a decreased
assessment on its Franklin Park Mall in Lucas
County, Ohio in the order of $2.8 million.40
The Washington Local School District
revealed that this had been a negotiated
settlement after Westfield had appealed
over and over again between 2007 and 2009
to have the property reassessed down from
$256 million to just $109 million – a reduction
of more than half the county’s assessed
value.41 Westfield had previously been
granted the right to a tax exemption for
the years 2006 and 2007 while the Franklin
Park Mall underwent major expansion. It is
clear from Washington Local School District
budgeting documents that the behavior
of Westfield in appealing and balking at
paying its fair share of property taxes has
a significant impact on the school district’s
budget. As the school district argued in May
2010, ‘If [Westfield] are successful in their
request to reduce their property values …
this would have a significant negative
impact on our annual revenue and cash
balances.’42

18

In relation to the Westfield Wheaton Mall in
Wheaton, Maryland, Al Carr, an elected state
delegate for the area, has confirmed that
‘Westfield has been very aggressive about
appealing the assessed value of its property
as a way to lower its property tax burden.
On the six properties that comprise the
[Wheaton] mall, Westfield filed appeals 20
times out of 30 annual appeal opportunities
over the last five years.’43
Westfield’s strategy has served them well.
Historical data collected from county tax
records indicates that Westfield successfully
managed to have the value of its property
reassessed down by $10 million in 2009.44
The same tactics worked for Westfield with
its Montgomery Mall, located in Bethesda,
just outside of Washington, DC. In 2011,
Westfield successfully appealed to have
its assessment reduced by $67.3 million,
bringing its total assessment down to $296.2
million.45
Historical data collected on two of
Westfield’s properties in Washington State
indicates that the company has aggressively
appealed the appraised values of its
properties while at the same time increasing
its reported fair value.46 This means that the
gap between the appraised and fair value
of each property has climbed dramatically
over the past four years. The outcome of
this is that every year public schools and
local governments lose more and more
tax revenue, while Westfield continues to
increase its profitability.

Difference between Appraised
Value (AV) and Fair Market
Value (FV) in Washington
State, 2009-2012
2009

2012

Difference ($m)

334.7

398.9

446.5

459.1

49%

43%

40%

39%

Difference ($m)

38.8

53.6

62

92.1

AV as % of FV

Capital

2011

AV as % of FV

Southcenter

2010

76%

67%

61%

51%

In some instances where Westfield has not been successful in appealing the
appraised value of its properties, the shareholder value has nonetheless
continued to grow at a faster rate, outstripping the growth in the appraised
value. Historical data collected for Westfield Fox Valley and Westfield Old
Orchard reveals that, in spite of a $19.1 million decrease in the value of
Westfield Old Orchard between 2009 and 2010, on the whole property
assessments in Illinois have been rising. Yet, despite this, the difference
between the fair value and the assessed value has grown over the last
three to four years. In 2009, the assessed value of Fox Valley was 58% of
the fair value, while in 2012 the assessed value is now just 47% of the fair
value. In the same period, the assessed value rose by $31.2 million.47 For
Old Orchard, the assessed value decreased from 39% of fair value in 2010
to 32% of fair value in 2012, even though the valuation of the property
increased by $57.7 million in the same period.48 Similar data collected for
Westfield Countryside in Clearwater, Florida shows that the valuation of this
property has increased considerably from $48.1 million in 2009 to $97.5
million in 2012. Yet, despite this, the difference between the fair value
and the assessed value has grown over the same period. In 2009, the
assessed value was 72% of the fair value, while in 2012 the assessed value
is now just 52% of the fair value.49 This means that Westfield has continued
to increase the amount reported to shareholders at a much higher rate than
the rate assessed by the county. The net effect of this is that local counties
miss out on an ever greater share of tax.

19

Westfield’s Impact on
Los Angeles Schools
The Los Angeles Unified School District (LA USD), with over 664,000 K-12 students,50 is by far
the largest school district in the Los Angeles area. Furthermore, the LA USD is the largest school
district in California and the second largest in the nation.51 A recent national survey ranked
California 47th of the 50 states in adjusted per pupil funding.52 Adjusted per pupil expenditures
were $8,667, compared to a national average of $11,665.53 However, conditions in the LA USD are
even more troubling than statewide. The district faces additional challenges as 25% of students
are learning English as a second language and 76% of students qualify for special funding under
federal poverty guidelines.54
The LA USD has faced budget cuts every year for the last 5 years.55 This past school year (201213), all LA USD employees agreed to take 10 furlough days.56 However, nearly 5,000 district
employees still lost their jobs.57 This is on the back of 8,000 jobs lost in the prior 4 years.58
California has the worst student/teacher ratio of any state.59 The state average in 2010 was 23.6
students per teacher in public K-12 schools.60 The US average was 15.6 students per teacher.61
The LA USD Board approved staffing ratios for ‘normal’ schools in the current school year are 29.5
students per teacher for Kindergarten, 32 for grades 1-3 and 39 students per teacher for grades
4-6.62
Westfield has four shopping malls whose property taxes help fund the district’s operations.63 The
total annual estimated tax loss on the four properties is $10.2 million.64 This does not include the
value of the 30 acre site that Westfield controls and is developing to connect the Topanga and
Promenade Malls.
School funding in California is both complex and problematic; however, it is safe to assume that
at least 50% of local property tax revenues are used to support public schools.65 If Westfield paid
taxes on the full reported value of these 4 properties, the LA USD would have an estimated $5.1
million that could pay the salary of 123 desperately needed new teachers or prevent layoffs.66
If $20.6 million – 50% of the estimated lost property tax revenue from all of Westfield’s California
properties – went to hire new teachers, it could pay the salaries of 501 teachers.67

20

Westfield’s Give Back
to School Campaign
While Westfield in 2012 has successfully avoided
paying more than $60 million in property taxes
that directly fund schools, it is proud to highlight
its ‘Give Back to School’ National Campaign in
the US as a social and community case study in its
2012 Sustainability Report. In 2011, the program
ran in 23 malls in eight states. ‘Local shoppers
participated in the program by donating clothes and
school supplies through their local shopping centre
– and Westfield donated US$2,500 to one school
in each of the participating markets for a total of
US$57,500.’
68

69

70

Westfield’s
‘Give Back
to School’
National
campaign
expenditure
Westfield’s
unpaid
taxes for
schools

$57,500

$60,000,000

21

The Impact
of School
Budget Cuts in
Montgomery
County
Funding cuts have been a major issue for schools across
Maryland for some years now.
Over the past decade, the amount of county revenue
allocated to Montgomery County public schools fell by 10%
from 52.5% in 2002 to 42.5% in 2012.71 This has meant that
county funding for public schools in Montgomery County
fell below the legally required minimum by 8.5% in 2012.72
Declining expenditure by local counties in Maryland has
follow-on consequences. Under state law, if counties do not
meet their required minimum, school districts also lose out
on additional state funding. In recent years, the implications
of this have been felt across schools in Maryland through
increased layoffs, hiring freezes, increased class sizes,
and reductions in budgets for teacher professional
development, school programs and school supplies.73
In Montgomery County, teachers have spoken openly about
how these funding cuts have impacted them. The decline
in the number of teachers and instructional assistants
available per student has the greatest impacts on students
with special needs, including those with learning disabilities,
those who come from low socio-economic backgrounds,
and those in need of additional language support.

22

The cuts with
teachers and the
cuts with para-educators
mean that students who
really need very specific
and intensive learning …
they receive less of it. It
has to be spread across
the day [with] more
students, less hands.

Tricia Skelly

Pre-school & Special education
– Stephen Knolls School74

If we are not going
to give assistance to
those who need it most,
then who are we giving
assistance to? Where is
the money going? And
how are we supposed
to be able to look at
ourselves in the mirror
as a society, collectively,
if the amount of money
that we are giving to
the neediest people in
our society is not being
adequately maintained?

Joshua Ruben
Einstein High School75

One Montgomery County teacher highlighted the
safety implications of job cuts. At her school, two
teachers were required to maintain control of up to
130 kindergarten students during recess.76 Another
teacher noted that a loss of financial support for
vocational training programs meant that many high
school aged kids were unable to attend programs
that would train them for a career after high school
because they could not afford to provide their own
tools and equipment.77
In Montgomery County alone, Westfield avoids
paying $3.3 million in property taxes. This money
could easily fund an additional 38 new teachers
across the county. Such an injection of finances
would thus help to ameliorate some of the effects
of declining budgets, by helping the county to
meet its financial obligations to local schools.

There are just so many domino
effects that I think sometimes
people are not aware of when
budgets are not funded to
their full capacity. So, I am
asking my legislators to really
consider and work very hard
and on our behalf to restore
the health of the fiscal budget
and to maintain the effort that
we’re supposed to have to
educate our kids year by year.

Eboni Walker

Kindergarten – Sargent Shriver
Elementary School 78

23

Challenging Commercial
Property Tax Abuse
Westfield is not the only commercial property
owner abusing the property tax appeal process
at the expense of schools and communities. The
problem is widespread. A recent investigation
by the New York County District Attorney found
evidence of common fraud in the way that property
owners in New York City were reporting their
property value to the county assessor. As a result of
this investigation, one property owner in particular
was forced to pay ‘$240,000 in back taxes as
part of an agreement settling the matter.’79 As a
result of this investigation, a Grand Jury ‘issued
a report examining the filing of false documents
and information with New York City in connection
with the computation of real property tax
liability, and calling for legislative, executive, and
administrative reforms to protect the integrity of
the tax system and maximize tax receipts lawfully
due to the City.’80 The report found that ‘current
laws, regulations, and systems are not adequate to
prevent and deter costly false filings, which occur
with unacceptable frequency.’ 81
Although the issue of property tax evasion is
widespread, Westfield appears to have been
highly effective in influencing local assessment
decisions. Due to the large scale and high value
of its properties the local impacts are substantial.
As already noted, the tax revenue lost from
Westfield properties could easily fund an additional
1,536 teachers across forty-one school districts.
In addition to this, however, a further $57 million
would be made available for much needed public
services such as fire stations, hospitals, local
libraries and parks.
Communities thus have a great incentive to
ensure that companies like Westfield pay their
fair share. We note here a number of precedents
from elsewhere in the country which may prove
useful for communities in considering how to do
this. When companies disclose property values to

24

shareholders or investors, that information should
be used by local authorities to determine the
assessed property values.
A recent case involving a major US competitor
of Westfield provides an interesting precedent
which could help communities shift the assessment
levels of major commercial properties. In 2011,
General Growth Properties sued Johnson County
in Iowa in an attempt to prevent the county from
raising the assessed value of the shopping mall
from $81.9 million to $125 million.82 Importantly,
the county’s increased assessment was based on
two factors, a 2011 annual report to shareholders
that valued the property at $154.9 million, and the
mall owner’s purchase of ‘the Sears space in the
mall, paying $15 million for a property assessed
at $5.7 million.’83 The outcome of the case is not
yet known. The county assessor claimed that the
new assessment was fair and said, ‘if anything it’s
conservative, especially if you look at what they
valued it at.’84
In communities throughout the US, local
authorities – especially school boards – recognize
the problems with commercial property tax
assessments and are directly challenging property
assessment appeals and winning. Reforms of
the property tax system are being proposed in
states across the country to tackle abuse and
fraud in the assessment of commercial properties.
In response to the aforementioned investigation
in New York City, the NYC Department of Finance
Commissioner David M. Frankel commented
that his office would, ‘work with the State and
City legislatures to ensure appropriate reforms
are enacted and that property owners face real
penalties for filing fraudulent documents with
the City. The vast majority of New Yorkers do the
right thing, but the fraudulent conduct cited in the
Grand Jury report results in higher taxes and less
services for the rest of us. This is not acceptable.’85

Additionally, in a number of states, school boards
are directly challenging assessed values on large
commercial properties to restore funding for
schools. In Ohio, the Washington Local School
District ‘vehemently’ contested Westfield’s appeals
to lower the assessment of its Franklin Park Mall
down from $256 million to $109 million, which
seriously threatened the revenue of local schools.
The intervention by the Washington Local School
District resulted in a negotiated settlement,
which still saw a decline in the value of the mall
but by a much smaller amount than Westfield
was proposing.86 Also in Ohio, after successful
challenges by school boards, many commercial
property owners are negotiating deals directly with
school districts to make payments in lieu of taxes.87
Columbus schools provide one such example.
‘In just the past year [2011], 10 of the 14 cases
settled by the Columbus schools involved the
district’s receiving a direct payment in lieu of taxes,
mostly from businesses fighting for a lower tax
appraisal. The 10 payments totaled $837,000. In
essence, the district was able to extract the money
because it had strong evidence - usually a recent
sale price - that the property owner was paying
too little. The property owner, on the other hand,
settled the case by paying the district what it was
owed and pocketing what would have been paid
to the other taxing bodies.’88
For the most part, the official appeals process
offered by local assessors is only open to appeals
originating from the owner of the property. A
recent series of cases from Pennsylvania offers one
serious challenge to this rule. School districts in
Pennsylvania have been contracting realty firms to
help defend against the appeals of large corporate
property tax payers within their communities.
In July 2012, the Bethlehem Area School Board
‘voted 8-1 ... to file “reverse appeals” against 50
properties in Northampton County the district
believes are under-valued.’89 The effort is ‘an
attempt to increase tax income $1.5 million to $2
million.’ 90 The school superintendent said that
the ‘goal here is simple – that the citizens of the
district feel confident that all property owners
pay their fair share.’91 The Bethlehem Area School
Board relied on advice provided to them from a
realty firm which did the research and filed the
reverse appeals on their behalf, in exchange for a
percentage of the recovered revenues. The school

district’s attorney reportedly said that the ‘courts
have given school districts and other government
entities the same rights as property owners to
file annual assessment appeals when they think a
property is over- or undervalued.’92 At least nine
other Pennsylvania school districts have contracts
with the same realty firm to pursue local properties
that are grossly undervalued.93 Many others school
districts are taking similar approaches by targeting
under-assessed commercial properties with
reverse appeals.
There is a real imperative behind the actions of
these school districts in Pennsylvania. The city
of Philadelphia has announced a $218 million
budget shortfall which will significantly impact local
schools. Large rallies of teachers, students, parents,
unions and community leaders took place in the
city in March 2013 to protest major cuts to school
budgets which will result in teacher pay cuts and
large class sizes. One of the main avenues for the
city and its community to make up this shortfall is
through raising commercial property assessments.94
The right for Pennsylvania school districts to
participate in the assessment process was upheld
by the Pennsylvania Commonwealth Court in
March 2013. The ruling confirmed that ‘that the
School District’s participation in a process to
systematically evaluate different classes of property
on an annual basis did not offend uniformity or
equal protection precepts.’ Furthermore, ‘the
property owner’s under-assessment, which was not
contested and through which it pays comparatively
less of the cost of local government, does not
enjoy constitutional protection from a school
district’s appeal.’95 This ruling provides an excellent
precedent.
The activities of school boards in Pennsylvania
provide a model of action for other states to follow.
More importantly, however, they also demonstrate
that the situation of corporations aggressively
lowering property taxes is a common problem.
While Westfield’s actions have a significant impact
on the communities in which it operates, Westfield
is an example of a wider problem. Nonetheless,
organized community responses to Westfield’s
tax avoidance strategies could provide a model
for communities across the country and set an
example for other commercial property owners.

25

Washington
State
Westfield’s three malls in Washington State
demonstrate the company’s aggressive methods of
lowering its assessed values with harmful impacts
on funding for schools and local governments. In
Washington State, state law requires that county
assessors appraise a property at 100% of its true
and fair market value, according to the highest
and best use of the property. Sales, in combination
with the income and cost approaches, are used by
county assessors to value commercial property.96
The 2012 financial reports for the City of Olympia
and the County of Thurston reveal that Westfield
Capital Mall (“Westfield/Capital Mall”) is the
largest property taxpayer in the city and the
fourth largest in the county. Westfield’s property
comprised 1.9% of the total assessed value of
all properties in Olympia in 2012.97 At the end of
2012, the fair value on this property reported to
Westfield shareholders was $187.3 million.98 By
comparison, the assessed value was just $95.2
million, or 51% of the fair value reported to
shareholders.99 If this property was assessed at
its fair value, Westfield would become the third
largest taxpayer and the largest non-utility taxpayer
in the entire County of Thurston. The estimated
annual loss in tax revenue is $1.2 million.100

26

The Westfield Vancouver Mall – near Portland,
Oregon – has a 2012 appraised value of $71.8
million.101 Westfield is the City of Vancouver’s third
largest property taxpayer and ranks ninth amongst
property taxpayers within Clark County.102 The
appraised value is 51% of the 2012 fair value of
$141 million, as reported to shareholders.103 That
suggests that Westfield may be paying taxes
on barely half the market value of this property,
resulting in an estimated annual tax revenue loss
of $1.2 million.104 If Westfield paid its fair share,
the company would become the fourth largest
property taxpayer in the county.
Lastly, the Westfield Southcenter Mall (“WEA
Southcenter LLC”) in the city of Tukwila – near
Seattle – is Tukwila’s second largest property
taxpayer with an assessed value of $295 million
and accounts for 6.4% of the city’s total assessed
value. In July 2008, Westfield completed a
$240 million expansion and renovation of the
property.105 The current appraised value is just
39% of the 2012 reported shareholder value of
$754 million.106 The estimated annual loss in tax
revenue is a staggering $6.5 million.107

Snapshot: Westfield in Washington
Westfield
Capital Mall

Westfield
Vancouver Mall

Westfield
Southcenter Mall

Appraised Value ($m)

95.2

71.8

295.0

Reported Value ($m)

187.3

141.0

754.0

Taxed Percent

51%

51%

39%

Difference ($m)

92.1

69.2

459.0

Tax Loss ($m)

1.2

1.2

6.5

Westfield Appeals to Increase its
Profit Margins
Historical data collected on two of Westfield’s properties in Washington State indicates
that the company has aggressively appealed the appraised values of its properties while
at the same time increasing its reported fair value.108 This means that the gap between the
appraised and fair value of each property has climbed dramatically over the past four years.
The outcome of this is that every year public schools and local governments lose more and
more tax revenue, while Westfield continues to increase its profitability.

Difference Between Appraised Value
and Fair Value 2009-2012
2009

2012

$m

334.7

398.9

446.5

459.1

49%

43%

40%

39%

$m

38.8

53.6

62

92.1

%

Capital

2011

%

Southcenter

2010

76%

67%

61%

51%

Number of additional
teachers in Washington
that could be funded if
Westﬁeld paid its fair share:

122

$4.5 million

for additional services

27

Connecticut

Westfield owns three malls in the state of Connecticut. By comparison to other states,
these three properties are appraised closer to their fair value.
In Connecticut, property tax is paid on 70% of the appraised value, which is equivalent to
the ‘fair value’ or ‘market value’ of the property. The tax portion is known as the ‘assessed
value’.109 Of the three Westfield properties in Connecticut, the appraised value is equal to
between 80% and 99% of the fair value Westfield reports to shareholders as follows:110

Difference Between City Appraised Value
and Shareholder Fair Value ($m) 2009-2012
City Appraised
Value

Shareholder Fair
Value

% Difference

Connecticut Post

$190.4

$236.8

80%

Meriden

$115.9

$135.7

85%

Trumbull

$312.3

$316.8

99%

Westfield is currently ranked as the largest taxpayer in all three Connecticut cities of
Meriden, Milford and Trumbull. If its property was assessed at fair value, the City of Milford
would raise an additional $900,000 annually,111 and the City of Meriden would raise an
additional $200,000 annually.112 With the Trumbull property currently assessed at 99%
of the reported shareholder value, it is no surprise that Westfield ranks first in the list of
taxpayers for the City of Trumbull. In this city it contributed 4.89% of the City’s Net Taxable
Grand List, which demonstrates exactly how much the company can contribute to a city
when it is paying its fair share.113

28

Snapshot: Westfield in Connecticut
Connecticut
Post

Westfield Meriden

Westfield Trumbull


190.4

115.9

312.3

Reported Value ($m)

236.8

135.7

316.8

Taxed Percent

80%

85%

99%

Difference ($m)

46.4

19.8

4.5

Tax Loss ($m)

0.9

0.2

0.1

Number of additional teachers in
Connecticut that could be funded
Connecticut that could be funded
if Westﬁeld paid its fair share:

14
$600,000.00
$600,000
$600,000.00

29

Maryland
Westfield has interests in three malls in the
state of Maryland and has invested millions of
dollars in renovations.
In relation to Westfield Wheaton, Al Carr, an elected
state delegate for the area, has confirmed that ‘Westfield has
been very aggressive about appealing the assessed value of their
property as a way to lower their property tax burden. On the six properties
that comprise the [Wheaton] mall, Westfield filed appeals 20 times out of 30
annual appeal opportunities over the last five years.’114 Westfield’s strategy has
served them well. Historical data collected from county tax records indicates that
Westfield successfully managed to have the value of its property reassessed down
by $10 million in 2009.115 The 2012 appraised value for Westfield Wheaton is $174.1
million, while Westfield reports the value of this property to its shareholders as $271.5
million. Westfield is thus only paying tax on 64% of the fair value of its property. The
estimated annual tax revenue loss is $1.1 million.116
The same tactics worked for Westfield with its Montgomery Mall, located in Bethesda,
just outside of Washington, DC. In 2011, Westfield successfully appealed to have its
assessment reduced by $67.3 million, bringing the total assessment down to $296.2
million.117 By comparison, the value reported to Westfield shareholders in 2012
was $497.4 million, making the mall’s appraised value just 60% of the reported fair
value.118 The difference in reported shareholder value and assessed value represents
an estimated annual tax revenue loss of $2.2 million.119 In January 2011, a 50% interest
in this mall was sold for $232.5 million, which would place the real value much closer
to the shareholder value than to the county appraised value.120
Westfield’s combined properties in Montgomery County currently rank the company
as the third largest taxpayer in the county, after two utility companies. If these two
malls were assessed at their fair value, Westfield would be the largest taxpayer in the
county, ahead of both utility companies. The potential tax revenue for the county is an
additional $3.3 million annually.121

30

In Anne Arundel County, Westfield Annapolis Mall is currently registered as the third
largest contributing taxpayer in the county.122 A review of land records for the mall
shows a 2012 assessed value of $477.8 million,123 while the most recent value of the
property reported to shareholders is $700.2 million.124 Taking these numbers at face
value, the assessed value is only 68% of the fair value as reported to shareholders.
This suggests that Westfield is not paying an estimated $2.3 million in annual property
taxes.125 If Annapolis Mall was assessed at fair value, Westfield would be the largest
taxpayer in the county, ahead of even the utility companies.126

Snapshot: Westfield in Maryland
Westfield
Wheaton

Westfield
Montgomery

Westfield
Annapolis


175.1

296.2

477.8

Reported Value ($m)

$271.5

$497.4

700.2

Taxed Percent

60%

64%

68%

Difference ($m)

96.4

201.2

222.4

Tax Loss ($m)

1.1

2.2

2.3

Maryland that could be funded

67

$2.7 MILLION
million


31

Florida
Westfield currently owns six properties
in Florida. All of these properties are
assessed well below the fair value
reported by Westfield to its shareholders.
The biggest difference between the
assessed value and the reported
shareholder value is at Westfield
Brandon, where the assessed value
according to the county is just $130.6
million.127 This is barely 34% of the $388
million that Westfield reports as the property’s fair value.128 Located in the same county, the appraised
value of Westfield Citrus Park is $112 million, or just 51% of the fair value of $221 million.129
The consequence of the undervaluing of these two properties is that Hillsborough County annually loses
an estimated $7.5 million in tax revenue.130 Westfield currently ranks as the sixth largest tax-payer in
Hillsborough County. If these two properties were assessed at their fair value, it would become the top
non-utility taxpayer and the third largest overall in the county.131

Summary for Hillsborough County
Appraised Value
($m)

Fair Value
($m)

Tax Paid
($m)

Tax Loss
($m)

Brandon

$130.6

$388.0

$2.7

$5.2

Citrus Park

$112.0

$221.0

$2.3

$2.2

COUNTY TOTAL

$242.6

$609.0

$5.0

$7.4

This picture is repeated elsewhere in the state of Florida. Westfield owns two malls in the county of
Sarasota, where Westfield is also currently ranked as the third largest contributing tax-payer and the top
non-utility taxpayer. Westfield Southgate has an assessed value of $53.8 million, worth just 49% of the
property’s reported fair value of $109 million.132 Westfield Sarasota has an assessed value of $84.2 million,
which is 67% of the reported fair value of $125 million.133 If these two properties were assessed at their
fair value, Westfield would be the county’s second highest overall taxpayer and the top non-utility taxpayer.134 The total potential tax revenue for the county is $1.5m.135

Summary for Sarasota County
Appraised Value
($m)

Fair Value
($m)

Tax Paid
($m)

Tax Loss
($m)

Sarasota

$84.2

$125.0

$1.1

$0.6

Southgate

$53.8

$109.0

$0.9

$0.9

$138.4

$234.0

$2.0

$1.5

COUNTY TOTAL

32

Broward Mall LLC and Westfield Countryside are assessed at 62% and 58% of the reported shareholder
values respectively. Broward Mall is currently assessed at $98.4 million compared to the shareholder
value of $159.4 million.136 Westfield Countryside is currently assessed at $134.2 million compared to the
shareholder value of $231.7 million.137
Countryside Mall is currently assessed as the fifth largest taxpayer in Pinellas County. If this property was
assessed at its fair value, Westfield would be the third highest overall and top non-utility taxpayer in the
county.138 The potential tax revenue for Pinellas County is $2.1 million.139 Broward Mall LLC currently does
not figure in the list of principal taxpayers for Broward County. However, if the property was assessed at
its fair value, it would rank sixth of all taxpayers in the county.140 The potential tax revenue for the Broward
County is $1.3 million.141

Snapshot: Westfield in Florida
Westfield
Brandon

Westfield
Citrus Park

Westfield
Sarasota

Westfield
Southgate

Westfield
Countryside

Westfield
Broward

Appraised
Value ($m)

130.6

112.0

84.2

53.8

134.2

98.4

Reported
Value ($m)

388.0

221.0

125.0

109.0

231.7

159.4

Taxed Percent 34%

51%

67%

49%

58%

62%

Difference
($m)

109.0

40.8

55.2

97.5

61.0

2.2

0.6

0.9

2.1

1.3

257.4

Tax Loss ($m) 5.2

Reassessments in Florida
Historical data collected on Westfield Sarasota indicates that the company has been successful in appealing
the assessment of this property downwards in recent years. Between 2011 and 2012, the assessed value of
this property fell by $6 million.142 By comparison, historical data from Westfield Countryside shows that the
valuation of this property has increased considerably from $48.1 million in 2009 to $97.5 million in 2012. Yet,
despite this, the difference between the fair value and the assessed value has grown over the same period.
In 2009, the assessed value was 72% of the fair value, while in 2012 the assessed value is now just 52% of the
fair value.143 This means that Westfield has continued to increase the amount reported to shareholders at a
much higher rate than the rate assessed by the county. The net effect of this is that the county of Pinellas is still
missing out on its fair share of tax revenue from Westfield.

teachers in Florida
that could be funded
if Westﬁeld paid its
fair share:

145

$6.8 million


33

Illinois

Westfield owns three properties in Illinois, one each in Lake County, Du Page County and
Cook County. According to Illinois state regulations, all properties are assessed at 33.3% of
their market value, except in Cook County when they are assessed at 38% of market value.
For the purpose of this report, property assessments have been re-calculated to 100% of
market value in order to find the difference between the assessed value and the reported
shareholder value, however the tax rate has been applied to the relevant percentage of the
shareholder value to find the difference in tax revenue.
Westfield Hawthorn has an appraised market value of $59 million, which is just 32% of the
fair value reported to Westfield shareholders of $183 million.144 Westfield currently doesn’t
appear on the list of top taxpayers in Lake County, Illinois. If its property were assessed at its
fair value, it would be the second largest taxpayer in the county.145 The potential tax revenue
for the county is an additional $3.7 million annually.146
Westfield Fox Valley has an appraised market value of $98 million, which is 47% of the fair
value reported to Westfield shareholders of $208.5 million.147 Westfield currently doesn’t
appear on the list of top taxpayers in Du Page County, Illinois. If its property were assessed at
its fair value, it would be the fifth largest taxpayer in the county.148 The potential tax revenue
for the county is an additional $3.5 million annually.149
Westfield Old Orchard has an appraised market value of $412.9 million, which is 76% of the
fair value reported to Westfield shareholders of $541.1 million.150 Westfield currently doesn’t
appear on the list of top taxpayers in Cook County, Illinois. If its property were assessed at its
fair value, it would be the fifth largest taxpayer in the county.151 The potential tax revenue for
the county is an additional $4.4 million annually.152

34

Snapshot: Westfield in Illinois
Westfield Fox
Valley

Westfield
Hawthorn

Westfield Old
Orchard


98.0

59.0

412.9

Reported Value ($m)

208.5

183.0

541.1

Taxed Percent

47%

32%

76%

Difference ($m)

110.5

124.0

128.2

Tax Loss ($m)

3.5

3.7

4.4

Reassessments in Illinois
Historical data collected for Westfield Fox Valley and Westfield Old Orchard reveals that,
in spite of a $19.1 million decrease in the value of Westfield Old Orchard between 2009
and 2010, on the whole property assessments in Illinois have been rising. Yet, despite this,
the difference between the fair value and the assessed value has grown over the last
three to four years. In 2009, the assessed value of Fox Valley was 58% of the fair value,
while in 2012 the assessed value is now just 47% of the fair value. In the same period, the
assessed value rose by $31.2 million.153 For Old Orchard, the assessed value decreased
from 39% of fair value in 2010 to 32% of fair value in 2012, even though the valuation of
the property increased by $57.7 million in the same period.154 These figures indicate that
Westfield has continued to increase the values reported to shareholders at a much higher
rate than increases in county assessments.

Number of additional teachers
in Illinois that could be funded

213

$3.8 million


35

Ohio
In 2012, Westfield maintained a 100% interest in three malls in the state
of Ohio. According to Ohio state regulations, property tax is paid on 35%
of total appraised value. For the purpose of this report, the tax rate has been
applied to 35% of the reported shareholder value to find the difference in tax
revenue.
The Westfield Belden Mall in Stark County presents an interesting case study. The current county
valuation on this property appears to be just 10% of the reported shareholder value. The county
assesses the property as being worth just $20.2 million.155 By contrast, Westfield reports the value of this
property as being $210.9 million.156 The difference between these two figures is so stark that it is almost
unbelievable; however the figures are corroborated by county bond records.157 The estimated amount of
tax that the county is losing on this property every year is a staggering $4.5 million.158 Additionally, county
records indicate that Westfield successfully appealed the valuation of this property down from $24.6
million in 2010 to the current value of $20.2 million. In the same period, the reported shareholder value of
this property grew by $34.4 million.
The Westfield Great Northern Mall, located in Cuyahoga County, has an appraised market value of $93.4
million,159 which represents 65% of the fair value reported to shareholders, which was $144.5 million
in 2012.160 The difference in reported fair value and assessed value represents an estimated annual tax
revenue loss of $1.7 million.161 Currently, the Great Northern Partnership, a Westfield subsidiary, which
owns this mall, is ranked fifteenth in the list of largest property taxpayers in the Cuyahoga County. If
Westfield paid tax on the fair value of this property, it would be ranked as the seventh largest taxpayer in
the county.162
In Lucas County, the Westfield Franklin Park Mall is the county’s second largest property taxpayer. The
mall has an appraised value of $247.7 million,163 which represents 78% of the $318.1 million reported
to shareholders in 2012.164 Despite this, the tax bills reveal that on three of the largest parcels in this
property, the only tax Westfield paid was a contribution towards the Toledo Area Sanitary District
Mosquito Control scheme. We can see from this that even though the county appraisal is relatively close
to the fair value, Westfield is still shirking its tax responsibilities on these three parcels by nearly $6 million
annually as follows165:

Westfield Franklin Park Mall Parcels
Parcel

Total Value

Tax owed on Total Value

Tax Paid

Difference

2374254

$99,585,500.00

$2,987,067.07

$9,236.56

$2,977,830.51

2374256

$88,857,600.00

$2,665,283.71

$8,241.56

$2,657,042.15

2265158

$6,632,000.00

$198,926.84

$615.12

$198,311.72

TOTAL UNPAID TAX

36

$5,833,184.38

Taking into account this loss of tax revenue combined with the difference between the
assessed value and the appraised value, the county is currently suffering an estimated
annual loss in tax revenue of $8.0 million.166
In addition to this, Westfield successfully negotiated a downward assessment on its
Franklin Park Mall in the order of $2.8 million between 2010 and 2012.167 The Washington
Local School District revealed that this had been a negotiated settlement after Westfield
had appealed over and over again between 2007 and 2009 to have the property
reassessed down from $256 million to just $109 million – a reduction of more than half
the county’s assessed value.168 Westfield had previously been granted the right to tax
exemption for the years 2006 and 2007 while the Franklin Park Mall underwent major
expansion. It is clear from the Washington Local School District budgeting documents
that the behavior of Westfield in appealing and balking at paying its fair share of property
taxes has a significant impact on the school district’s budgets. As the school district
argued in May 2010, ‘If [Westfield] are successful in their request to reduce their property
values … this would have a significant negative impact on our annual revenue and cash
balances.’169

Snapshot: Westfield in Ohio
Westfield
Franklin Park

Westfield Great
Northern

Westfield Belden

Taxed Value ($m)

247.7

93.4

20.2

Reported Value ($m)

318.1

144.5

210.9

Taxed Percent

78%

65%

10%

Difference ($m)

70.4

51.1

Tax Loss ($m)

8.0

1.7

190.7
4.5

Number of additional teachers
in Ohio that could be funded

215

$7.1 million


37

California

As California’s largest retail landlord and one of
the top property taxpayers in the communities in
which it operates, Westfield’s tax avoidance has
an over-sized impact. Westfield reports one set of
property values to shareholders and aggressively
seeks to lower the assessed property values for tax
purposes. Proposition 13 has kept some assessed
values of commercial property artificially low, but
Westfield uses other means to avoid paying its
fair share of property tax. On the 21 Westfield
shopping malls in California, Westfield may be
underpaying local property taxes by more than $41
million. While statewide commercial property tax
reforms are needed, Californians must demand that
Westfield - and other corporations - pay a fair share
of property taxes.
This report will summarize the findings for
Westfield’s 21 California properties at the county
level. For more details on individual properties
within each county, please refer to the report
‘Malled by Westfield: The Consequences of
Corporate Property Tax Avoidance.’170 It is worth
noting that since this report was released in
August 2013, Westfield’s most recent report to
shareholders no longer reports property values by
property as they had done in the past.171 This does
raise questions about why Westfield has apparently
changed its reporting practices to be become less
transparent.

Short-Changing
Los Angeles
The Los Angeles market has the highest
concentration of Westfield malls anywhere in the
world. Westfield ‘has spent $1.2 billion during
the past five years overhauling, expanding and
redoing L.A. properties.’172 There are ten Westfield
properties in the Los Angeles area, four within
the city of Los Angeles, four in other cities in Los
Angeles County, and two malls in neighboring
counties. Together the 8 malls in Los Angeles
County represent a combined estimated annual
tax revenue loss of $18.7 million.

38

If the current appraised
values of Westfield’s
eight Los Angeles
County properties are
combined, Westfield’s
$2.3 billion in assessed
value would rank it as the
second largest property
taxpayer (excluding energy
companies).173 If the
properties were assessed at
their shareholder value of $3.6
billion, Westfield would be the
largest property taxpayer in the
county.

Short-Changing
San Diego
Westfield owns seven landmark shopping malls in San
Diego County. The combined assessed value of these
properties is an estimated $1.5 billion and Westfield’s
property tax bill was $17.5 million. This would make
Westfield the largest (non-utility) property taxpayer
in the County.174 However, the assessed values
of Westfield’s properties are significantly lower
than reported shareholder values despite recent
massive property redevelopments. The combined
shareholder value of these properties is $2.3 billion.
If Westfield paid taxes on the full value of its San
Diego County shopping malls it would generate an
additional $8.1 million in annual tax revenues.

Short-Changing
San Jose
Westfield owns two large shopping malls in Santa
Clara County and is one of the largest taxpayers
in the county.175 Westfield values these properties
at $1.6 billion, but the assessed value is only $805
million. It appears that Westfield is only paying
taxes on half the real value of its shopping malls.
If Westfield paid taxes on the full value of its
Santa Clara shopping malls it would generate an
additional $9.8 million in tax revenue. This would
make Westfield the largest property taxpayer in
Santa Clara County after the utility company Pacific
Gas & Electric.

Snapshot: Westfield in California
Mall

Taxed Value
($m)

Reported Value
($m)

Taxed Percent
($m)

Difference
($m)

Tax Loss
($m)

LOS ANGELES COUNTY
Century City

576.5

921.0

63%

$344.5

$4.4

Culver City

199.0

330.0

60%

131.0

1.9

Fashion Square

150.3

317.6

47%

167.3

2.1

Promenade

39.1

49.3

79%

10.2

0.1

Santa Anita

358.7

548.1

65%

189.4

2.6

Topanga

481.6

755.3

64%

273.7

3.5

Valencia Town Center

349.1

391.2

89%

42.1

0.7

West Covina

187.3

328.4

57%

141.1

3.3

Horton Plaza

254.0

315.8

80%

61.8

0.7

Mission Valley

204.8

328.3

62%

123.5

1.4

North County

200.2

272.2

74%

72.0

0.8

Parkway

261.9

294.0

89%

32.1

0.5

Plaza Bonita

242.6

366.9

66%

124.3

1.4

Plaza Camino Real

116.0

151.0

77%

35.0

0.4

UTC

261.7

524.4

50%

262.7

2.9

Oakridge

234.4

426.0

55%

191.6

2.6

Valley Fair

570.8

1,170.0

49%

599.2

7.3

Mainplace

204.0

275.0

74%

71.0

0.8

Galleria at Roseville

318.0

608.0

52%

290.0

3.3

Palm Desert

141.9

150.0

95%

8.1

0.1

San Francisco

794.1

826.3

96%

32.2

0.4

6146.0

9348.7

66%

3202.7

41.2

SAN DIEGO COUNTY

SANTA CLARA COUNTY

OTHER COUNTIES

TOTAL CALIFORNIA

teachers in California
if Westﬁeld paid its
fair share:

501

$20.6 million

39

teachers in New Jersey
if Westfield
teachers in New Jersey
teachers in
paid its of New Jersey
Number fair 209
thatthat could additional
could be funded
teachers be funded
share: in New Jersey
New
if Westfield

Other States

if Westfield
paid Westfield
paid its fair 209
teachers New Jersey
if its fairin 209
share: could be funded
that
share:
paid its fair 209
if Westfield
share:

Jersey

Westfield owns one property in New Jersey – Garden State
Plaza in the borough of Paramus – which according to its annual
report is worth $1,683.6 million, making it the most valuable
property that the Group owns in the United States.176 Despite
this, the borough assesses the property as being worth just
$670.8 million, or 40% of the reported shareholder value.177
Westland GSP L.P., a Westfield subsidiary, is already the largest
taxpayer in the Borough of Paramus, accounting for 8.22% of
the borough’s total assessed valuation.178 If this property was
reassessed at its shareholder value, the county would stand to
gain an estimated additional $17.1 million.179

209
$7 million

paid its fair
share:

$7 million
$7 million
million
$7


for forNumber services According to the tax bills for this property, Garden State Plaza
additional of additional
additional services

$7 million

not
the past four years
for additional services hasmore.been reassessed at any time in undergoing major
or
This property is also currently
teachers services renovations worth $150 million.
for Numberin Indiana that
additional additional
of
could be funded
teachers in Indiana that
teachers inbe if Westfield
could be funded
could Indiana that Indiana
funded
could ifpaid its fair
be funded Westfield owns one property in Indiana – Westfield Southlake
if Westfield
couldif Westfield – which according to its annual report is worth $279.5
beWestfield
funded
paid itsshare:
paid its fairfair million. Despite this, the assessed value of the property
if Westfield

47

47
47
47
47

paid its fair

180

$2.5 million
paidshare:
its share:
fair
share:
share:

181

according the Lake County is just $132.7 million, or 47% of the
shareholder value.182 Westfield Southlake is already the second
largest taxpayer in Lake County; however, if this property
was reassessed at its fair value Westfield would become the
largest taxpayer, outstripping even the local gas and electricity
company.183 The county would also gain an estimated additional
$4.1 million.184

$2.5 million
$2.5 million
for$2.5 million
additional services
$2.5 million

for additionalservices
services
forfor additionalservices
additional services
for additional

of additional
Numberof additional
Number
Number of ofin New JerseyNorth Carolina
Number additional
Number additional
teachers inadditional
teachersin New Jersey
New
teachers
teachers in North Jersey
teachers New Jersey
teachers in in New Jersey
Carolina that could be could
that could be funded Westfield owns-one property in Gaston, Northshareholders as
Carolinabe be funded
that could funded
Eastridge Mall which Westfield reports to its
thatthatcould be fundedbe
could that funded
funded if
being valued at $40.8 million. However, the assessed value
if Westfield
if Westfield
if Westfield
if Westfield
if Westfield
of the property according to Gaston County is $22.5 million,
Westfield
paid its fair
or 55% of the reported shareholder value. Eastridge Mall is
paid its fair
paidits fair 3
its
paid fairfair
paid its its
paid
currently ranked as the twentieth largest taxpayer in Gaston
share:
3
share:
County; however if this property was assessed at its fair value,
share:
share:
fair share:
share:

3
33

$100,000.00

185

186

Westfield would become the eighth largest shareholder.187 The
estimated tax gain for the county is an additional $200,000.188

$100,000.00
$100,000.00
$100,000.00
$100,000.00

40

Conclusion
This report has demonstrated an extraordinary disparity between the
reported shareholder value and the taxed appraised value of the majority
of Westfield properties in the US. The consequences of this for local
communities are significant. The total amount of lost tax revenue from
Westfield properties is $116.4 million annually. There may be an immediate
possibility to raise property tax revenues moving forward and in some
communities there could be the possibility of collecting back-taxes as well.
We know from recent Westfield property sales that it is not shareholder
values that are over-inflated, but county assessments that are undervalued.
Furthermore, an assessment of available historical data indicates that the
difference between shareholder values and the taxed value of Westfield
properties has increased over time. This means that, if left unchecked, the
lost tax revenue for local communities will only continue to grow. Without
a change in Westfield’s behavior, children and communities will continue to
suffer the consequences of under-funded schools and services.
While Westfield may be more aggressive than others in lowering its
property assessments, its practices represent a wider trend amongst
commercial property owners. These practices are stripping local
communities of much-needed funds for schools and other public services
and must be addressed. The amount of tax dollars lost due to low property
assessments amongst Westfield’s portfolio alone is enough to directly fund
an additional 1,536 teachers and $60 million for police, fire fighters and
other local government services.
Particularly in the wake of the global financial crisis, citizens, school boards
and local governments must demand more from companies that have
continued to increase their profits while local communities have faced the
brunt of austerity and budget cuts. Some communities are beginning to
fight back as they realize the extent of their losses. People are getting
organized in places like Pennsylvania, where local school boards are directly
challenging the assessed values of large commercial properties. Their
activities provide a useful model for other communities around the nation.
As the discrepancy between real property values and taxed values increases
over time and budgets tighten everywhere, communities need to adopt
strategies that require companies like Westfield to pay its fair share.
Westfield has an opportunity to be pro-active and change its tax
avoidance policies now - setting an example for other corporations - or
be held responsible by the communities in which it operates for shortchanging schools and essential services. Westfield’s current practices are
unsustainable and will continue to shift the tax burden onto individuals and
small businesses who are already struggling to make ends meet.

41

Appendix: National Summary of Westfield’s Property Taxes

State

Mall

City

County

California

Century City

Los Angeles

Los Angeles

Culver City

Culver City

Los Angeles

Fashion Square

Sherman Oaks

Los Angeles

Promenade

Woodland Hills

Los Angeles

Santa Anita

Arcadia

Los Angeles

Topanga

Canoga Park

Los Angeles

Valencia Town Center

Valencia

Los Angeles

West Covina

West Covina

Los Angeles

Horton Plaza

San Diego

San Diego

Mission Valley

San Diego

San Diego

North County

Escondido

San Diego

Parkway

El Cajon

San Diego

Plaza Bonita

National City

San Diego

Plaza Camino Real

Carlsbad

San Diego

UTC

San Diego

San Diego

Oakridge

San Jose

Santa Clara

Valley Fair

Santa Clara

Santa Clara

Mainplace

Santa Ana

Orange

Galleria at Roseville

Roseville

Placer

Palm Desert

Palm Desert

Riverside

San Francisco

San Francisco

San Francisco

Brandon

Brandon

Hillsborough

Broward

Plantation

Broward

Citrus Park

Citrus Park

Hillsborough

Countryside

Clearwater

Pinellas

Sarasota

Sarasota

Sarasota

Southgate

Sarasota

Sarasota

TOTAL CALIFORNIA
Florida

TOTAL FLORIDA

School District

Appraised
Value
($m)

Shareholder % Taxed
Value
($m)

Difference
($m)

Tax Loss
($m)

Teachers
Lost

Los Angeles Unified SD

576.5

921.0

63%

344.5

4.4

53

Culver City Unified SD

199.0

330.0

60%

131.0

1.9

23


150.3

317.6

47%

167.3

2.1

26


39.1

49.3

79%

10.2

0.1

1

Arcadia Unified SD

358.7

548.1

65%

189.4

2.6

32


481.6

755.3

64%

273.7

3.5

43

349.1

391.2

89%

42.1

0.7

9

West Covina Unified SD

187.3

328.4

57%

141.1

3.3

40

San Diego Unified SD

254.0

315.8

80%

61.8

0.7

9


204.8

328.3

62%

123.5

1.4

17

Escondido Union SD

200.2

272.2

74%

72.0

0.8

10

261.9

294.0

89%

32.1

0.5

6

242.6

366.9

66%

124.3

1.4

17

Carlsbad Unified SD

116.0

151.0

77%

35.0

0.4

5


261.7

524.4

50%

262.7

2.9

35

San Jose Unified SD

234.4

426.0

55%

191.6

2.6

32

Campbell Union SD

570.8

1,170.0

49%

599.2

7.3

89

204.0

275.0

74%

71.0

0.8

10

318.0

608.0

52%

290.0

3.3

40

Desert Sands Unified SD

141.9

150.0

95%

8.1

0.1

1

San Francisco Unified SD

794.1

826.3

96%

32.2

0.4

5

6146.0

9348.7

66%

3202.7

41.2

501

Hillsborough County SD

130.6

388.0

34%

257.4

$5.2

58

Broward County PS

98.4

159.4

62%

61.0

$1.3

18

Hillsborough County SD

112.0

221.0

51%

109.0

$2.2

24

Pinellas County SB

134.2

231.7

58%

97.5

$2.1

23

Sarasota County SB

84.2

125.0

67%

40.8

$0.6

10

Sarasota County SB

53.8

109.0

49%

55.2

$0.9

12

613.2

1234.1

50%

620.9

$12.3

145

Saugus Union elementary SD
William S. Hart Union High SD

Cajon Valley Union elementary SD
Grossmont Union High SD
Chula Vista elementary SD
National elementary SD
Sweetwater Union High SD

Orange Unified SD
Santa Ana Unified SD
Roseville City Elementary SD
Roseville City Unified High SD

Appendix: National Summary of Westfield’s Property Taxes

State

Mall

City

County

Washington

Capital

Olympia

Thurston

Southcenter

Tukwila

King

Vancouver

Vancouver

Clark

Annapolis

Annapolis

Anne Arundel

Montgomery

Bethesda

Montgomery

Wheaton

Wheaton

Montgomery

Fox Valley

Aurora

Du Page

Hawthorn

Vernon Hills

Lake

Old Orchard

Skokie

Cook

Belden Village

Canton

Stark

Franklin Park

Toledo

Lucas

Great Northern

North Olmsted

Cuyahoga

Connecticut Post

Milford

New Haven

Meriden

Meriden

New Haven

Trumbull

Trumbull

Fairfield

Garden State Plaza (New Jersey)

Paramus

Bergen

Southlake (Indiana)

Merrillville

Lake

Eastridge (North Carolina)

Gastonia

Gaston

TOTAL WASHINGTON
Maryland

TOTAL MARYLAND
Illinois

TOTAL ILLINOIS
Ohio

TOTAL OHIO
Connecticut

TOTAL CONNECTICUT
OTHER

TOTAL OTHER
NATIONAL TOTAL

School District

Shareholder % Taxed
Value
($m)
187.3
51%

Difference
($m)

Tax Loss
($m)

Teachers
Lost

OLYMPIA S.D. #111

Appraised
Value
($m)
95.2

92.1

$1.2

19

Tukwila SD #406

295.0

754.0

39%

459.0

$6.5

89

Vancouver Public Schools

71.8

141.0

51%

69.2

$1.2

14

462.0

1,082.3

43%

620.3

$8.9

122

Anne Arundel Co. SB

477.8

700.2

68%

222.4

$2.3

28

Montgomery Co. SB

296.2

60%

201.2

$2.2

26

Montgomery Co. SB

175.1

271.5

64%

96.4

$1.1

13

949.1

1469.1

65%

520.0

5.7

67

Indian Prarie SD 204

98.0

208.5

47%

110.5

$3.5

59

Hawthorn SD #73 (elem)

59.0

183.0

32%

124.0

$3.7

71

412.9

541.1

76%

128.2

$4.4

83

569.9

932.6

61%

362.7

11.5

213

Jackson Local SD

20.2

210.9

10%

190.7

$4.5

68

Washington Local SD

247.7

318.1

78%

70.4

$8.0

121

North Olmsted City SD

93.4

144.5

65%

51.1

$1.7

26

361.3

673.5

54%

312.2

14.3

215

Milford Public Schools

190.4

236.8

80%

46.4

$0.9

11

Meriden Public Schools

115.9

135.7

85%

19.8

$0.2

2

Trumbull Public Schools

312.3

316.8

99%

4.5

$0.1

1

618.6

689.3

90%

70.7

1.2

14

Paramus Public Schools

670.8

1,683.6

40%

1,012.8

$17.1

209

Merrillville Community SD

132.6

279.5

47%

146.9

$4.1

47

Gaston County Schools

22.5

40.8

55%

18.3

$0.2

3

825.9

2003.9

41%

1178.0

21.5

259

$10,546.00

$17,433.47

60%

$6,887.47

$116.45

1536

497.4

CHSD 128 (high)
Skokie SD #68 (elem)
Niles Township CHSD 219

Endnotes
1. The authors have examined assessed values and shareholder
reported values for 45 of Westfield’s 47 properties in their US portfolio for 2012. Two properties located in the state of New York have
been excluded from the analysis since property tax regulations in this
state are substantially different, making a comparison between these
properties and the wider portfolio impractical. Westfield has additional
ownership interests in other US properties that have not been included
in this analysis. Sources and methodology for some of these properties
are explained in detail below. This is the best estimate possible based
on currently available information. It is possible that additional parcels
have been included or excluded as Westfield owns its properties
through many different subsidiaries and many anchor tenants own their
own property. In general, for each of the 45 properties, the 2012 tax
rates were applied to the difference between the 2012 values reported
to shareholders and the 2012 assessed values of the parcels owned
by Westfield controlled entities. Assessed values on Westfield owned
parcels were obtained from various online sources and confirmed by
reviewing online county assessment records in August and September
2013. In properties with joint venture partners, 100% of the property
value and tax liability has been attributed to Westfield as the managing
partner of these investments.
2. This estimate is calculated based on the average starting teacher
salary for 2011-2012 as reported by the National Education Association.
This is then divided by the amount of tax lost on Westfield properties
multiplied by the average percentage of tax designated for schools.
Where the exact amount of tax designated for schools was unavailable,
an average of 50% has been applied. See: NEA, ‘Rankings of the States
2012 and Estimates of School Statistics 2013’, December 2012, p. 92
3. These figures are based on averages of the rate reported by individual counties. Where this rate was unavailable, an estimate of 50%
was supplied. The amount of property tax distributed to schools varied
between 39% and 71% for those counties where this information was
available.
4. NEA, ‘2011-2012 Average Starting Teacher Salaries by State’ http://
www.nea.org/home/2011-2012-average-starting-teacher-salary.html.
Accessed 23 October 2013.
5. Stark County Auditor http://ddti.starkcountyohio.gov/Search.aspx
Accessed 4 September 2013. Westfield Group, Supplemental Information Report, 31 December 2012, p. 17.
6. Lake County Property Tax Search http://apps01.lakecountyil.gov/
sptreasurer/collbook/collbook2.asp Accessed 3 September 2013. Westfield Group, Supplemental Information Report, 31 December 2012, p.
17.
7. Borough of Paramus Tax Assessor http://tax1.co.monmouth.nj.us/
cgi-bin/prc6.cgi?menu=index&ms_user=paramus&passwd=modiv&mode=12&district=0246&selcount=0201 Accessed 22 August 2013.
Westfield Group, Supplemental Information Report, 31 December
2012, p. 17.
8. http://corporate.westfield.com/news_announcements/westfield-group-announces-multiple-center-transaction-with-starwood-capital-group/ Accessed 2 October 2013.
9. Maryland State Education Association, Maintenance of Effort:
Repairing Maryland’s School Funding Safeguard, http://www.mceanea.
org/pdf/MOEWhitePaper.pdf. Accessed 23 October 2013. Montgomery County Teachers Discuss the Impact of Budget Cuts, Maryland State
Education Association, 3 February 2012. https://www.youtube.com/
watch?v=eNgp2iYQSGc. Accessed 23 October 2013.
10. Gwladys Fouche and Joachim Dagenborg, ‘Norway Oil Fund
Concerned about Tax Evasion,’ Reuters, 9 August 2013. http://
uk.reuters.com/article/2013/08/09/uk-norway-wealthfund-idUKBRE9780MZ20130809. Accessed 24 September 2013. Terry Macalister,
‘Tax avoidance “not a legal duty”: Director’s fiduciary duty to shareholders is not to maximise dividends through tax avoidance, says new
official advice,’ The Guardian, 9 September 2013. http://www.theguardian.com/business/2013/sep/08/tax-avoidance. Accessed 24 September
2013. Similar legal requirements exist within the Australian jurisdiction

46

under the Corporations Act, while some of the case law referred to in
this legal opinion is also binding authority within Australia.
11. ‘Bethlehem Area School Board to appeal assessment of 50
commercial and apartment properties,’ The Morning Call, 24 July 2012.
http://articles.mcall.com/2012-07-24/news/mc-bethlehem-schools-assessment-appeals-20120723_1_assessment-appeals-lehigh-county-properties-property-owners. School District of Upper Dublin,
Legislative Meeting Minutes, 11 February 2013. https://www.udsd.org/
uploaded/documents/Minutes/February_11,_2013-_Legislative_Meeting.pdf. Accessed 25 September 2013. Tony Fioriglio, ‘Palmer Sworn
in to Colonial School Board,’ The Times Herald, 10 January 2013
http://www.timesherald.com/article/JR/20130110/NEWS/130119937.
Freda R. Savana, ‘Upper Moreland Loos to Assessment Appeals,’ The
Intelligencer, 27 July 2012 http://www.theintell.com/news/communities/willow-grove/upper-moreland-looks-to-assessment-appeals/
article_fdee0820-7391-5846-af2c-ad8b935a2e68.html. Chamberburg
School Board Hires Consultant to Review Property Tax Assessments
http://www.scribd.com/doc/102449330/Keystone-Terms-and-Conditions-7-30-12. Accessed 25 September 2013. Upper Merion Area
School District, Minutes of meeting 3 June 2013. Shawn Klocek, ‘CV
Going After Reassessment Appeals,’ Chartiers Valley Patch, 15 March
2012. http://chartiersvalley.patch.com/groups/schools/p/despite-concerns-cv-oks-solicitor-appeals. Downingtown Area School District, Finance Committee Meeting, 7 March 2012. http://dasd-sharepoint.dasd.
org/SchoolBoard/Agendas/Finance%20Committee%20Agenda%20
3-7-12.pdf. North Penn School District, Informational Sheets, July 2010.
http://www.npenn.org/cms/lib/PA09000087/Centricity/Domain/16/
July_15_2010/Combined%20Information%20Sheets.pdf. Minutes of
the Lower Moreland Township School District Regular Meeting of 18
January 2011. http://www.lmtsd.org/cms/lib/PA01000427/Centricity/
Domain/74/minutes%201%2018%2011.pdf.
12. Washington Local School District, Five-Year Forecast, May
2010. http://www.washloc.k12.oh.us/treasurer/upload/wls_5yr_
forcast_201010.pdf. Accessed 24 September 2013. Washington Local
School District, Five-Year Forecast, May 2012. http://www.washloc.k12.
oh.us/treasurer/upload/5-Year-Forecast-May-2012.pdf. Accessed 24
September 2013. Auditors Real Estate Information System Lucas County http://maps.co.lucas.oh.us/areis/areis.asp. Accessed 4 September
2013.
13. ‘Manhattan Grand Jury Recommends Sweeping Reforms to NYC
Property System,’ Cyrus R. Vance, Jr., New York County District Attorney, 1 August 2012. http://manhattanda.org/press-release/manhattan-grand-jury-recommends-sweeping-reforms-nyc-property-tax-system
14. Montgomery County Teachers Discuss the Impact of Budget Cuts,
Maryland State Education Association, 3 February 2012. https://www.
youtube.com/watch?v=eNgp2iYQSGc. Accessed 23 October 2013.
15. http://corporate.westfield.com/about/ Accessed 18 September
2013.
2013. All currency conversions made via http://www.xe.com using the
exchange rate $1 AUD = $0.94 USD as at 2 October 2013.
17. Chairman’s Review, Westfield Group Shareholder Review, 30 April
2013. http://corporate.westfield.com/wp-content/uploads/2013/05/
Shareholder-review-lores-FINAL.pdf
2013.
19. Westfield Group, Appendix D, Half Year Results, 30 Jun 2013, p.
12.
20. Westfield Group, Appendix D, Half Year Results, 30 Jun 2013, p.
37.
21. In total, property tax generated $578 billion in revenues for local
government services in 2011. http://www2.census.gov/govs/local/
summary_report.pdf. In 2010, property taxes generated $211 billion
in funds for public schools in the US, 35% of total funding. http://nces.
ed.gov/programs/digest/d12/tables/dt12_202.asp

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