DEC releases $2.9M Rotterdam Square bond after 25 years
ROTTERDAM For decades, the state Department of Environmental Conservation hung onto a $2.9 million bond originally put up by Wilmorite Co. when the Rotterdam Square mall was constructed.
The “construction” bond was part of six pages of conditions the agency imposed on Wilmorite before the company was allowed to proceed with the massive project centered in a wetland near a sensitive recharge area of the Great Flats Aquifer.
The bond was to ensure the developer properly constructed embankments, a new channel for 2,270 feet of the Poentic Kill, an impoundment structure and other facilities associated with protecting the county’s drinking water supply.
The mall opened for business in 1988, but Wilmorite never received back the bond. DEC continued holding the money even after Wilmorite’s holdings were absorbed by Macerich Co., the Santa Monica, Calif. company that acquired Rotterdam Square as part of a $2.3 billion multi-property deal in 2004.
Then last week, DEC quietly released the construction bond. The money was part of what was holding up a deal Macerich had in place to sell Rotterdam Square to Mike Kohan of Kohan Retail Investment Group.
The DEC did require Kohan’s company to put up a “maintenance” bond of $150,000 to help mitigate any failure of the mall’s extensive wetland and flood control system. This is an increase of $25,000 from a similar bond in place when Macerich owned the property.
The release of the larger bond has stirred concern among some environmentalists and mall critics who fear DEC has eliminated a large pot of money that could have been tapped if the mall contaminates the underlying aquifer — a massive 14-mile-long, 45,000-acre watershed serving as the sole source of Schenectady County’s drinking water. Aaron Mair, a member of the Sierra Club’s national board of directors, said the release of the bond money is cause for great concern. He was never convinced the protections incorporated by Wilmorite functioned properly.
“If anything, it takes a very lousy situation and makes it even worse,” he said. “They at least had money out there to mitigate any failure. Now they’re taking that away.”
Rotterdam Square’s construction filled in roughly 21 acres of freshwater wetlands bisected by the Poentic Kill. To relocate the creek, Wilmorite had to construct 3,650 feet of new channel, which now runs around the mall’s periphery.
Wilmorite built a flood control gate near the Sears anchor store and a detention area in a floodplain outside the mall. The system also includes an alarm inside the mall that indicates when the gates need to be operated.
The system was intended to prevent flooding of neighboring areas, since there are significant wetlands surrounding the site. Also, it was to ensure that construction and fill on the site did not result in additional flooding.
Once construction was complete and approved, DEC officials said there was no reason to maintain the bond, but it remained in place for 35 years after the mall’s completion because Wilmorite — and subsequently Macerich — never requested its release.
The health of the aquifer has been a concern since plans for the mall were first pitched. Many feared the sprawling impermeable surface would allow contaminated runoff flowing from its parking lots and industrial areas to the east to flow freely into the recharge area by what is now the Great Flats Nature Preserve.
Concern over the mall’s construction led to the creation of the Intermunicipal Watershed Board, which is tasked with monitoring water quality for any noticeable contamination. Since its creation, the board hasn’t found any appreciable changes to the water quality.
Still, some believe the system the mall built has never operated properly. And they fear the removal of the bond will mean there’s less incentive for the new owner to ensure the system works properly.
“It’s a time bomb,” said Marjorie Schmid, a longtime critic of the mall. “If I live longer now, it’s only because I’m waiting for the [expletive] to hit the fan.”