BFC Partners handed off its outlet mall on Staten Island after the property was purchased at auction by one of the operator’s senior lenders.
Goldman Sachs Urban Investment Group bought the Empire Outlets at a foreclosure auction held on Thursday for $10 million, the Staten Island Advance reported. The auction capped a foreclosure saga that lasted for nearly two years.
It’s unclear if Goldman Sachs intends to keep the mall operating in the same manner it has been, that is, open for business despite the foreclosure action initiated in February 2022. There are 37 storefronts in business at 55 Richmond Terrace, according to the outlet mall’s website.
Goldman Sachs wasn’t the only bidder on the 340,000-square-foot retail hub. Grinberg Management, a property management company based in Staten Island’s Port Richmond neighborhood, bid up to $9 million before ceding to Goldman Sachs.
But the purchase price was essentially irrelevant. Given that the mall owed Goldman $174 million (and Sterling National Bank $38 million) when the foreclosure action began, the senior lender could have bid far more than $10 million without using cash for the purchase.
The $350 million project, which has been credited as the first outlet mall in New York City, broke ground in 2015. After multiple construction delays postponed a planned 2016 launch of the mall, Empire Outlets finally launched in 2019, just in time for the pandemic. Eleven tenants quickly bailed after Covid’s onset, leaving 50,000 square feet vacant.
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BFC began missing debt payments to the New York City Economic Development Corporation in mid-2020. Storefronts remained empty as pandemic lockdown policies meant a drop in visitors.
BFC and senior lenders Goldman Sachs and Sterling National Bank agreed in 2022 to put the property into foreclosure. The deal was designed to allow the restructuring of debt on the property and was always expected to cost BFC the property. At the time, the possibility of the lenders bidding on the mall was known.
The Empire Outlets was expected to help drive a renaissance of Staten Island’s North Shore, but became one of several projects to fall by the wayside or struggle in recent years. This month, Mayor Eric Adams announced a $400 million investment for the North Shore, promising 2,400 housing units, a school and open space.
— Holden Walter-Warner