What’s the selling price?
LNR Partners is selling a 64-acre property that covers most of the land and buildings on the east side of Niagara Falls Boulevard between Maple Road and Almeda Avenue.
It includes 687,000 square feet of rentable retail space that Ten-X states is 78 percent leased.
The sale includes the buildings that house Buy Buy Baby, Michaels and Chili’s. It does not include the J.C. Penney in the mall, owned by that corporation; the former Macy’s men’s store, owned by Benderson Development Co.; and a former LA Fitness outlet, also owned by Benderson.
Separately, Ten-X is auctioning off the adjoining property at 675 Alberta, also owned by LNR Partners, where Wegmans has a ground lease.
The starting bid for the auction is $6 million. But the Ten-X site doesn’t say whether that’s the reserve price, and it’s not clear whether LNR Partners would accept that price for the mall. (The starting bid for the Wegmans parcel is $3 million, for point of reference.)
Back in 2003, when the retail climate was vastly different, the McKinley Mall sold for $48.6 million. Uniland Development Co. one year ago paid $15.4 million to become co-owner of the Eastern Hills Mall.
Why buy a mall?
Amherst officials say the property is attractive because of its size, its location on heavily traveled Niagara Falls Boulevard and between the two University at Buffalo campuses, the commercial and residential density of the area that surrounds the mall and its inclusion along the projected path of an expanded Metro Rail.
“You say Boulevard Mall, people know where it is,” Amherst Planning Director Dan Howard said. “There’s an identity.”
A key reason that developers will want to bid on the property now is its inclusion in the federal opportunity zone program, said A.J. Baynes, CEO of the Amherst Chamber of Commerce.
What’s an opportunity zone?
The program sets up targeted zones in high-poverty census tracts where investors and corporations can defer taxes they owe on capital gains.
They can reinvest those gains, whether on their own or through pooled funds, into a project in an opportunity zone and pay a lower tax rate on the money they invested. If they hold on to the investment for 10 years, they don’t owe taxes on any of the gains.
Who’s going to bid?
Nick Sinatra of Sinatra & Co. Real Estate is the only local developer who has expressed interest publicly.
Benderson is another obvious possibility, given the company’s extensive holdings within the mall footprint and farther north to its Boulevard Consumer Square retail complex and office park on Ridge Lea Road. A Benderson executive did not respond to a request for comment.
Ciminelli Real Estate Corp. and Mensch Capital Partners, which is working to redevelop the former Westwood Country Club site in Amherst, both said they don’t plan to bid.
“I think there’s a lot of people who are keeping their cards close to their vest,” said Executive Director David Mingoia of the Amherst Industrial Development Agency. “I actually would be surprised if it didn’t sell.”
When will we find out?
It’s not clear if or when HFF or LNR Partners would announce they have accepted an offer. An HFF spokeswoman said she couldn’t comment on the sale.
Once the purchase closes, the deed would be filed with the Erie County
Think of the lifestyle center planned for the Eastern Hills Mall in Clarence as a guide, although Amherst officials say development at the Boulevard Mall site could be denser and taller.
Uniland and partner Mountain Development Corp. estimate they will spend $200 million to $300 million over three to 10 years to transform that site into an open-air, walkable community anchored by housing and retail, restaurants and community attractions.
Local planners point to Belmar, in Lakewood, Colo., and Crocker Park in Westlake, Ohio, as examples of thriving town centers.
What’s the timeline?
Little should change at the Boulevard Mall anytime soon as stores continue to operate under existing leases. Any new work is likely to take place on the outer portion of the property before moving to the center.
Full reuse is years away, but any buyer that wants to earn the maximum opportunity zone tax benefits must follow an aggressive timeline. The new owner needs to file a development plan to the IRS by the end of the year, and start construction soon after.