The city will refund $348,000 to its largest taxpayer to end a multi-year valuation dispute.

Under the terms of a deal approved by the City Council Nov. 7, STAG IV Belfast LLC, owner of 141 acres on Route 3 that is home to Bank of America and OnProcess Technology, will recoup a portion of its property taxes from 2015 to 2018 using money that the city set aside over the past two years.

The dispute over the taxable value of the former MBNA property, which includes a 319,000-square-foot building complex, goes back to 2015 when STAG IV challenged the city's assessment, then $41 million.

Assessor Brent Martin, then newly hired by the city, revalued the property at $33 million based on much of the commercial space being vacant.

"Occupancy is the key," he said, describing what goes into appraising commercial properties. "That's what drives the value."

That year, Bank of America vacated a portion of its leased space, leaving the complex 60-percent vacant. And in 2016, Martin lowered the assessment to $28 million.

An independent appraiser hired by the city subsequently valued the property at $16.7 million, Martin said. Appraisers hired by STAG IV found the property to be worth $11 million to $15 million.

As the parties continued to negotiate, Martin said the city socked away money in each of its last two budgets for the probable outcome of having to reimburse STAG IV.

"When your own expert tells you the best you're going to get is $16,700,000, it's a little hard to be arguing that we should be valuing this at $28 million," he said.

Money set aside in the last two budgets as "overlay" would more than pay for the abatement, Martin said, adding that taxes will not go up for other city taxpayers as a result of the settlement.

And if the buildings fill up again, Martin said, the taxable value of the property will rise accordingly, as it has at the neighboring athenahealth complex, another former MBNA property.

City Manager Joe Slocum said he and other city officials would try to make that happen.

"Once this settlement is signed and the money is paid, the city will be not just monitoring what happens out there," he said. "We will be proactively trying to help rent that space."