SUMMIT: Mall owner files bankruptcy

<!--Mark Scheer--><table width="234" border="0" cellspacing="0" cellpadding="0" background="http://static.cnhi.zope.net/flashpromo/niagaragazette/images/byline_234x60.jpg" height="60"><tr><td><div align="center"><font size="3" face="Arial, Helvetica, sans-serif">By Mark Scheer</font><font face="Arial, Helvetica, sans-serif"><br /></font><font size="1" face="Arial, Helvetica, sans-serif"><a href="mailto:mark.scheer@niagara-gazette.com">mark.scheer@niagara-gazette.com</a></font></div></td></tr></table>

May 06, 2009 06:47 am

— Niagara County officials vowed Tuesday to do what they could to help save The Summit shopping mall in the Town of Wheatfield.
Failing that, they said they are hoping to accommodate all of the tenants who are about to be forced out in the wake of Tuesday’s bankruptcy filing by the mall’s owner.
It comes as little consolation to Angelo Passalacqua, who has operated Leon’s Pizza inside the mall’s food court for the past 32 years.
A stunned Passalacqua said he’s not sure what the future holds for his company or its 10 employees. He said what he heard during a 2 p.m. meeting between the mall’s owner and its tenants did not sound reassuring.
“I didn’t expect anything like that,” he said of the pending closure.
Town of Wheatfield Supervisor Timothy Demler, Niagara County Chairman Bill Ross, C-Wheatfield, and officials from the county’s Industrial Development Agency said they were shocked to learn Tuesday morning of plans by the mall’s owner, Oberlin Plaza One, to file for Chapter 11 bankruptcy reorganization, a move that will result in the closure of all but three stores in the mall effective June 6. According to a release from the company, Oberlin Plaza One filed Chapter 11 on Tuesday in U.S. Bankruptcy Court in Raleigh, N.C. in an effort to end “years of cash deficits.” The move nullifies leases with 26 tenants in the interior of the mall, meaning they will have 30 days to pack up and move out. Three “stand-alone” stores on the property will remain open, including Sears, The Bon Ton and Sav-A-Lot. The mall itself is expected to be offered up for sale as part of the company’s reorganization process. Demler said tenants were notified by Oberlin Plaza One around
2 p.m. Tuesday.
County officials said the goal is to try to find affected tenants new locations, preferably in the Town of Wheatfield or elsewhere in Niagara
County. Officials estimate as many as 200 jobs could be lost as a result of the mall’s closure. The move also jeopardizes plans proposed by NuComm International U.S., a St. Catharines, Ont.-based company that intended to lease 6,000-square-feet of space at the mall for use as a new call center that was to employ as many as 100 people by year’s end. The company already has been approved for a tax break on the project through the NCIDA.
“It’s hard enough to attract jobs to the area,” Demler said. “We can’t afford to lose jobs that are already here.”
Demler said he and other county officials are continuing to negotiate with Anthony in an effort to extend the 30-day notice given to all tenants. Demler would like the company to allow the tenants to continue operations at the mall for at least 60 days, giving them more time to find suitable alternatives. In the meantime, the town has scheduled a meeting with the tenants for 9 p.m. today at the town’s community center, 2790 Church Road.
“We’re hoping that the owners will come around to our way of thinking,” Demler said.
Oberlin acquired the mall through a foreclosure proceeding in 2002 after a client defaulted on a loan. The company cited the recent nationwide economic slump as the final deciding factor in filing for bankruptcy.
“We started out by simply making a loan and ended up owning a mall,” James Anthony of Oberlin Plaza One said in a statement released Tuesday afternoon. “Once in our possession, we were determined to make the mall successful for the tenants and the community. We made extraordinary efforts but it was difficult to find and maintain enough tenants to be viable.”
Town of Wheatfield Attorney Robert O’Toole said company officials indicated the debt involved in the transaction was owed to individual mall investors, not outside creditors. County officials said they were not provided with specific revenue numbers from the mall itself, although they said company officials told them the closure of the Steve & Barry’s store was a blow to the bottom line. Demler said the company finally managed to break even at the mall after years of losing money once Steve & Barry’s arrived. The lower-cost clothing chain filed for bankruptcy last year, shuttering all of its stores, including its Wheatfield location. The last concrete operational figures from the mall provided to town officials came from a previous owner which said it lost $984,000 in 2001.
County officials said they first received word of the company’s intentions Tuesday morning. They found the move particularly surprising considering they participated in a ribbon-cutting ceremony three weeks ago with the mall’s newest tenant — Niagara’s Choice Federal Credit Union.
County officials sat down with Anthony and his associates throughout the day in an effort to work out an alternative to closure. Recommendations included assistance through the IDA and consolidation of stores within the mall in order to conserve energy and cut costs.
“I think by the time we were contacted mall ownership had made up its mind about what it wanted to do,” Demler said.
County officials expressed hope a new owner may be able to realize the property’s full potential, perhaps as a mix of retail stores and office space. They said they were working with a few perspective buyers.
“There’s tremendous potential there,” Ross said. “We don’t want to lose that spot.”

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