Sangertown Square in New Hartford is suffering financially and city officials have implemented plans to help the retail establishment.
City supervisor Paul Miscione said the mall had been in financial trouble before COVID-19, but the pandemic has exasperated the situation.
Sangertown has seen its estimated value drop, Miscione said. Sangertown’s bonds were also recently downgraded by the rating agency Fitch.
Last week, city officials provided Sangertown with a one-year stipulation that would see it at a lower assessed value to save money on taxes. The city would reconsider the stipulation after a year, Miscione said.
âWe have to work with them, not against them,â Miscione said.
Sangertown is the city’s biggest taxpayer and the biggest contributor to the sales tax, Miscione said.
Mall officials did not return multiple messages seeking comment.
Sangertown opened in July 1980 with Hess’s, Sears, and JC Penney as key tenants, which is normally a larger store in the mall, typically a department store or retail chain. Other stores included Klein’s All-Sport, Karaz Shoe Shop, Barbara Moss, Shed House, RadioShack, General Nutrition Center, Waldenbooks, Brooks Fashion Store, Endicott Johnson, Liberty Travel, Lennon’s Jewelers and McHarris Gift Center, according to archives at Observe-Dispatch.
None of those original stores remain, which have seen their mainstays change over time and a few have closed in recent years, leaving storefronts vacant.
Macy’s closed its store in Sangertown in April as part of a restructuring plan that saw the company close 45 stores across the country.
JC Penney announced it would close many stores – including the Sangertown store – last July as the company tried to stabilize its finances under Chapter 11 protection. The store is now closed.
Sangertown now only counts Target and Boscov’s as two of its four pillar stores.
Sangertown Square:Officials optimistic despite loss of flagship stores
In previous interviews, Sangertown’s marketing manager Victoria Orilio said the retail establishment was optimistic despite the loss of anchor stores.
“We are encouraged by the constant customer traffic and the growth in in-store and curbside collection offered by many Sangertown Square tenants,” Orilio said in late January. âOur mix of offerings will continue to evolve and grow as we continue to attract an assortment of exciting new tenants. ”
Some of the new tenants mentioned by Orilio were the bohemian retailer Earthbound Trading Co., which came to the mall last year, as well as the Utica Blue Sox Academy, which recently opened.
Sangertown’s estimated value was around $ 85 million in 2015, according to OD reports. The mall’s estimated value is now not even half of it, Miscione said.
Miscione said the city has settled a dispute with the mall over the property assessment. New Hartford will increase the property’s estimated value from $ 47 million to $ 35 million, Miscione said.
Sangertown officials had said the estimated value should be $ 15 million, Miscione said.
Miscione said the city decided to settle in order to help the mall and its stores. Things could go on for years if they went through the court system, Miscione said.
“This directly relieves tenants today,” Miscione said of the one-year agreement between New Hartford and Sangertown.
Fitch demoted two and confirmed five classes of JP Morgan Chase Commercial Mortgage Securities Corp. earlier this year, according to a May 5 statement on the decision. Simply put, this means that Fitch has downgraded or confirmed a commercial loan pool that includes the Sangertown loan.
Fitch said two regional malls – Sangertown and Holyoke Mall in Massachusetts, both owned by Pyramid – were included in the pool the credit reporting agency ruled on.
Destiny USA in Syracuse, also owned by Pyramid, is also facing financial difficulties according to several press reports.
Melissa Che, senior manager of Fitch, said the loans for Sangertown were made in 2011 and are due to expire this year. Che said Sangertown still had $ 52.5 million in arrears on loans.
Sangertown’s loan, as well as the loan for Holyoke Mall, was amended in October 2020, extending their loan term by 36 months until January / February 2024 and converting the remaining payments to interest only, according to the release from Fitch.
Pyramid is now asking for an additional modification and has indicated that it would not be able to repay it as it is currently structured for the Sangertown loan, according to the Fitch report. Negotiations for a possible second modification are currently underway.
What future for Sangertown?
Sangertown’s financial future is uncertain at this time.
Che said Fitch is watching to see if the mall receives the second change.
The May 5 Fitch report provides a negative outlook and suggests the possibility of further degradation over the next two years.
Fitch has been concerned about the mall sub-sector since 2015, Che said.
Shopping malls were affected by e-commerce and changing consumer behavior before the pandemic, which also had an effect, according to Che.
Stephanie Cegielski, vice president of research and public relations for the International Council of Shopping Centers, said most shopping centers are doing well, in general, although all shopping centers have struggled throughout. pandemic due to government-imposed closures.
âThere are many reasons a mall can have a hard time, so the outlook for one of them usually doesn’t reflect all of them,â Cegielski said in an emailed statement. âWhen it comes to online shopping, we are seeing its use slowing down since the peak of the pandemic as people are returning to physical stores and, overall, not having a negative impact on the health of stores. retail or properties where they are tenants. Shopping centers continue to be relevant and see consumers returning as the country emerges from the pandemic. ”
Miscione hopes Sangertown can turn around her finance ship, with help from the city. However, he believes the city could survive the financial blow if the mall collapses, thanks to the city’s new development.
“It will hurt us, but it will not cripple us,” Miscione said.
Ed Harris is the Oneida County reporter for the Observer-Dispatch. For unlimited access to his stories, please register at the top of the uticaod.com home page or activate your digital account today. Email Ed Harris at [email protected]