The sale of Rotterdam Square mall for a profit bodes well for the local economy and the mall’s future, town Supervisor Harry Buffardi said Monday.
The struggling West Campbell Road mall was recently sold for $9.25 million to Via Properties, which is $750,000 more than Mike Kohan paid when he bought the mall from Macerich Co. last year. The purchase price, kept confidential by the Turkish developer when the sale was announced last week, was determined through a Friday filing with the Schenectady County Clerk’s Office.
“I think that’s a good sign,” Buffardi said when told of the sale price. “I think it shows that the economy is strong, that the economy is strong in Rotterdam and that the investor saw potential in this.”
It’s also a good sign that Via Properties, which operates domestically as ViaPort USA, plans to invest another $10 million in the mall property, Buffardi said. The plans include a 25,000-square-foot aquarium and 30,000-square-foot family fun zone with a bowling alley, arcade games and a sports bar to be built in the mall’s desolate Sears wing.
“I think it brings more value to the mall, increases the value of the property and increases the interest in shopping there,” he said of the effect the new attractions will have. “I think it makes it a destination. Their willingness to reach into their pocket to come to Rotterdam shows that they are invested in what happens here.”
Cenk Hayirlioglu, country manager for ViaPort USA, could not be reached for comment Monday on the sale price. But last week he said that the company saw potential in the site, and that the new attractions will bring the mall’s occupancy, now between 65 and 70 percent, to 90 percent. The mall has about 600,00 square feet of leasable space.
Via Properties, which owns malls, marinas, hotels and amusement parks in Turkey, last fall bought its first mall in the U.S., in Leesburg, Florida. It has invested millions in improving the mall’s look and landscape, and announced plans in May for a family fun zone there. It also changed the name from Lake Square Mall to Via Port Florida and added a 60-foot-tall digital screen to greet shoppers.
Hayirlioglu said last week that Rotterdam Square would also be getting a new name, although what that will be has not been decided.
“We are branding our malls, so eventually we will change the name,” he said.
Kohan’s Long Island-based Kohan Retail Investment Group sold the mall for a profit of $750,000 despite the property losing some major tenants under his ownership, including T.J. Maxx and Macy’s. Several smaller stores like Gap Outlet, Aeropostale and Olympia Sports also closed. In February, two days before Valentine’s Day, National Grid shut off the mall’s power for a day after an outstanding electric bill wasn’t paid.
Kohan bought the mall from Macerich Co. for $8.5 million, which was less than a third of the mall’s assessed value at the time, in January 2014. The mall’s assessment was lowered from $30 million to $19.9 million, also in January 2014, after the town settled a tax dispute with Macerich.
Following the latest sale for a profit, Buffardi said he expects the mall’s assessment, and the tax dollars it produces for the town, to grow. The mall, which spans nearly 71 acres at 93 W. Campbell Road, recently produced $394,396 in town and county property taxes and $473,777 in school taxes, according to the town. That doesn’t include taxes for the 120,000-square-foot former Macy’s site, which is under separate ownership and assessed at $9 million.
Buffardi noted that the tax settlement secured the mall’s assessed value at $19.9 million until at least January 2017.
“By that time, it appears like the value of this mall is going to be strong because he’s going to invest $10 million into it,” he said.
Buffardi also said Via Properties has looked at other mall properties in the Capital Region in researching what could work in Rotterdam, and that makes him optimistic. Via Properties has noticed, for example, that The Cheesecake Factory and P.F. Chang’s at Colonie Center are often packed with customers, and wants to bring those restaurants to Rotterdam, he said.
“I know that that’s on the table,” he said. “I know that a grocery store or even a specialty market like Fresh Market or a Whole Foods is still on the table.”
Buffardi said he can drive 20 minutes to Colonie Center or Crossgates Mall in Guilderland, and often does, but that could soon change.
“A lot of times I don’t go to Rotterdam Square mall because there’s things that I’m looking for — upscale restaurants, better stores, attractions — the things that they’re intending on doing here,” he said.
The sale to Via Properties closed on May 15.