Macerich Co. quietly closed on a deal to sell the Rotterdam Square mall to a downstate retail investor this week.
Mike Kohan of the Kohan Retail Investment Group acknowledged he’s new owner of the mall following a closing on Thursday. He said he now intends to start revitalizing the mall so it’s once again a center of commerce in the town.
“It’s a done deal,” he said during a brief phone conversation Friday.
Macerich and Kohan did not, however, disclose what was paid for the 463,987 square feet of retail space along West Campbell Road. Karen Mauer, a spokeswoman for Macerich, did not return calls for comment.
The Schenectady County Clerk’s Office had no record of the sale Friday afternoon. Both county and town officials weren’t aware of the purchase price of the mall, which is assessed at $30 million and is Rotterdam’s third-highest valued property.
Macerich had slated the mall for an online auction last fall, starting the bidding at $2 million. The mall was abruptly removed from the auction block in December, just days before bidding was set to begin.
The value of the deal is critical to both the town, county and Schalmont Central School District, all of which are embroiled in litigation with Macerich over the value of the mall in 2012 and 2013. If the mall sold for far less than its assessed value, all three taxing entities could have a difficult time justifying the higher valuation of the property.
Macerich argued the mall was worth roughly $10 million less than its assessment. Town Supervisor Harry Buffardi said the rumored purchase price of the property is far lower than its assessed value.
“We’re concerned about our tax interest there,” he said “Not just us, but the school district and the county of Schenectady, too.”
Rotterdam Square has seen better days. Though it has fluctuated in recent years, the mall’s occupancy rate has routinely been lower than others in Macerich’s portfolio.
The Santa Monica, Calif.-based company claimed Rotterdam Square had an occupancy of 86.1 percent in advertisements for the property, but filings with the U.S. Securities and Exchange Commission placed the mall’s occupancy at 79.8 percent at the end of September.
Rotterdam Square’s retail space was also valued significantly lower than other similar malls in Macerich’s portfolio. Rotterdam Square was leasing space at $234 per square foot during the third quarter of 2013 — about $66 less than the Wilton Mall about 35 miles away in Saratoga County.
Rotterdam Square also has the disadvantage of having two anchors — Sears and Kmart — with parent companies that have run into financial trouble. Sears Holdings, which also owns Kmart, has posted six consecutive years of declining revenues and has recently been selling off assets.
Still, local officials remain cautiously optimistic about the sale. Ray Gillen, Schenectady County’s commissioner of economic development and planning, said his discussions with Kohan have been positive.
“The new owners want to invest in and lease up additional space at Rotterdam Square mall,” Gillen said.
Likewise, Buffardi said he looks forward to meeting with the new company.
“We certainly want to work with them and improve the mall,” he said.