The struggling Rotterdam Mall could soon enter a new phase under new ownership.
Owner Mike Kohan is in the process of selling the mall to a Turkish developer just 14 months after his Long Island-based Kohan Retail Investment Group bought the property for $8.5 million.
The developer, Via Properties, is based in Istanbul and just bought its first property in the U.S. in September: a struggling mall in Leesburg, Florida, with a history similar to Rotterdam Mall. Its properties in Turkey include traditional malls, outlet malls, theme parks, hotels and a marina.
“They are a very professional company that revitalizes malls,” Kohan said. “They bring in various entertainment, various different types of tenants, retail, and they revitalize malls. They bring in a lot of stuff that’s going to have a draw to the mall.”
While Kohan declined to name the buyer until a sale is finalized (expected around April 3), he confirmed it was a Turkish company that recently bought one of his other malls. News reports confirm this was a mall he purchased in Leesburg last March, Lake Square Mall.
Kohan — whose firm targets aging and distressed malls in the name of reviving them — bought the Florida mall through an online auction after it had lost a Target and some other national brands. J.C. Penney moved out a few months later. After just six months of ownership, he sold the property to Via Properties, citing financial reasons.
“It needs a revitalization, and we didn’t have the funds to do that,” he told the Orlando Sentinel in September. “We just thought we’d hand it to them and step on the side.”
Lake Square Mall is not unlike Rotterdam Mall, formerly called Rotterdam Square. Built in the 1980s, the enclosed mall experienced success in the 1990s and early 2000s before struggling through the recession and eventually losing major anchor tenants. Much like his experience with Lake Square, Kohan admitted Friday he just doesn’t have the financial resources to save Rotterdam Mall.
“This is the only mall I have in the state of New York,” he said. “My resources are very limited in the state of New York because I’m mostly Midwest-based, so I saw an opportunity with these guys.”
Like other enclosed shopping malls across the country, Lake Square and Rotterdam Mall have struggled to maintain foot traffic as shoppers increasingly turn to online shopping, retail shops in pedestrian-friendly urban cores and open-air shopping plazas in the suburbs. Since 2010, more than two dozen enclosed shopping malls have closed, and dozens more are on the brink, industry experts say.
But Rotterdam Mall could improve with Via Properties, said Jennifer Glidewell, general manager at Lake Square Mall.
“I’ve been here 15 years, and this is the fourth owner since I’ve been here,” she said. “But they are the first owners who have come in and done work that’s really making a difference.”
In the six months since they bought that property, Via Properties has renovated the mall with new lighting, floors and paint, remodeled the bathrooms and added a family restroom, painted the mall’s interior and exterior, installed a center court fountain, freshened the outdoor landscaping and installed a 60-foot-tall digital screen to greet incoming shoppers.
Four new tenants have arrived, including a shoe store, a gluten-free market, a real estate and investment firm and a clothing retailer. The mall has also started hosting events such as live bands, singers, home and garden expos, fashion shows and antique car shows after years without a budget for them.
They’re currently developing six to seven outparcels for an outdoor restaurant complex that’s supposed to offer a “downtown dining” atmosphere, Glidewell said, and are planning a “fun zone” that will offer entertainment of some kind.
Although Lake Square is still waiting on national names to fill its anchor spaces, Glidewell said the mall has been getting more calls than ever from interested tenants since Via Properties took over. She’s also been in contact with Rotterdam Mall General Manager Terri Emond, she said.
“We’ve had several discussions on the phone over the past year, and I have assured her this is going to be a wonderful thing for Rotterdam because Via has been an absolute godsend for us,” Glidewell said.
The Turkish company would be the fourth owner for the Rotterdam mall. Built in 1988 on West Campbell Road, the mall’s longtime owner, Wilmorite, was bought out in 2005 by Macerich, a company based in Santa Monica, California. In January 2014, after years of low occupancy rates, Macerich sold the property to Kohan’s firm for $8.5 million — less than a third of its assessed value.
In the 14 months since, the mall has had its assessment dropped from $30 million to $19.9 million, lost a stream of tenants both big and small, and had its electrical service shut off once due to a delinquent bill. In January, Macy’s announced it was closing its 120,000-square-foot store, and as many as 18 storefronts sat empty. Last month, Gap moved out and into Niskayuna’s Mohawk Commons. Two days before Valentine’s Day, the mall went dark for a day after National Grid shut off power.
On March 1, two billboards went up on Erie Boulevard beckoning passersby to come to the mall.