UPDATED Mar. 1, 2023, 9:41 a.m.
In the spring, Mike Kohan faced an ultimatum at the Great Northern Mall in the Syracuse suburbs: Pay more than $5 million in back taxes or sell it.
Kohan chose the latter.
The Clay, New York, retail property will close sometime in the coming weeks, CNY Central reported. The mall’s general manager informed tenants that the mall would close Nov. 20, but Guy Hart Jr., who has signed a contract to buy the property, is working with Kohan to create flexibility on end dates.
Hart isn’t expected to close on the mall until the winter. After that, he has plans for the site that include elements of retail, but not a traditional mall.
Instead, Hart plans to convert the property into a lifestyle center with luxury apartments and townhomes. There will also be stores and restaurants.
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US mall values plummeted by one-third in 4 years
The imminent end of the Great Northern Mall comes after local officials and Kohan feuded over the state of the property.
Onondaga County sued Kohan, demanding the overdue taxes and moving to foreclose on the moribund mall. In April, unpaid utility bills led to the mall’s power being shut off, although Kohan blamed a burst pipe that damaged electrical boxes.
It’s true that the mall closed for a month early this year because of water damage. Code violations remained after it reopened and remaining tenants complained of leaky ceilings and treacherous parking lots.
In April, Onondaga County Executive Ryan McMahon said the county was “done” with Kohan and expressed a desire that the property be sold to a local developer. McMahon acknowledged the possibility of a conversion, suggesting the property “could have a housing component in the long term.”
- Adding residential to lackluster malls is a strategy that owners have increasingly employed in the past few years.
- The owners of the Brentwood Place Shopping Center in Los Angeles filed papers to turn it into a highrise apartment building and mixed-use complex.
- In South Florida, Electra America JV plans a $1 billion mixed-use development of the Southland Mall including a hotel, medical offices and 4,400 apartments.
- Developers are also building apartments at a dying mall in Milford, Connecticut.
- On Long Island, Blumenfeld announced it would “de-mall” a dying retail center.
- Urban Edge Properties will add homes to the Bergen Town Center in Paramus, New Jersey, and to the Yonkers Gateway Center. It will also convert the interior of Hudson Mall in Jersey City, adding industrial and self-storage space.
But Kohan’s playbook is to buy troubled malls and extract value from them. Some of his properties have gone through hardships similar to those at the Great Northern Mall. As of February, Kohan’s portfolio included 52 malls and two hotels.
— Holden Walter-Warner
Update: A previous version of this article included an incorrect photo reference. That photo has been removed.