The Summit mall is closing by June 6
Owners blame loss of key tenants, file for bankruptcy
Published: May 06, 2009, 12:30 am
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WHEATFIELD — The Summit mall will close in one month after its owner, Oberlin Plaza One, filed for Chapter 11 bankruptcy protection in U. S. Bankruptcy Court in North Carolina Tuesday.
Tenants at the mall were told by mall management Tuesday afternoon that the facility will be open through June 6, and that they have two months to clear out their leased space. The Bon Ton, Sears and Sav A Lot do not lease their space from mall owners. Owners of those companies will decide independently what happens to their stores at the mall site.
Mall owners called the ongoing global economic downturn “the deciding factor” as it considered going through bankruptcy proceedings, while also pointing to changes in the industry, consumer patterns and the loss of key tenants.
“We started out by simply making a loan and ended up owning a mall,” James Anthony, head of Oberlin, said in a statement. “Once in our possession, we were determined to make the mall successful for the tenants and the community.”
Anthony added: “We made extraordinary efforts but it was difficult to find and maintain enough tenants to be viable.”
Local officials at an afternoon press conference in Wheatfield Town Hall said Oberlin Plaza One, which took ownership of the mall in 2002, had not made a profit in any year since it took over.
On its petition filed in bankruptcy court, the company listed its assets between $1 million and $10 million, while its liabilities are listed as between $10 million and $50 million.
The Summit, which has about 800,000 square feet of building space, sits on 77 acres bound by Williams Road and Sawyer, Plaza and Lancelot drives. About 25 tenants occupy mall space.
The total number of employees who work for the mall and its tenants is about 200. About 20 of those employees work directly for the mall, which opened in 1973, was expanded in 1979 and has gone through several ownership changes during the past decade.
The property will be sold at auction at the end of the bankruptcy proceedings, mall officials said.
Oberlin said in its statement it has spent millions to improve and maintain the facility, including installing a new roof and making repairs to the parking lot and HVAC units, as well as renovations to both the mall’s interior and exterior.
A large portion of the mall’s parking lot, as well as parts of the mall itself, will be closed and secured before the mall closes.
In its statement, mall ownership said a few tenants may be offered available space with exterior entrances adjacent to Sav A Lot and in the former Steve & Barry’s store.
Mall owners said they are having conversations with the Niagara County Industrial Development
Agency about possibilities the county or other public agencies can work on an adaptive reuse of the property.
Cory Welfare, manager of VTwin Cycles in the mall, said prior to Tuesday’s announcement, there had been discussions involving management about possibly closing half the mall and moving all tenants toward the Bon Ton end of the facility.
Stores received a memo from mall management Tuesday morning announcing a planned meeting with tenants, which was where they learned of the mall’s fate.
“I kind of had a feeling that was what [the meeting] was about,” Welfare said.
V-Twin Cycles found the rent at The Summit to be “the right price” when the company decided to close its store on Sheridan Drive in the Town of Tonawanda and move to the mall in December 2007, Welfare said.
The shop, which has five employees, did not rely on walk-in customers, and much of its business is done online, he said.
During the press conference, Wheatfield Supervisor Timothy E. Demler and County Legislature Chairman William L. Ross credited the mall’s owners for following through on a pledge to upgrade the shopping center and working to try to make it profitable.
They estimated that the mall’s current ownership had made “upwards of $10 million” in investments in the property in recent years.
“However, it just was too little, too late and now with the economic crisis at hand, it collapsed,“ Demler said.
Demler held out hope that the mall still has a viable future because of its location.
“We also have an opportunity here on the Niagara Falls Boulevard and Williams Road corridor where it seems to be an attractive place for businesses to locate,” Demler said. “I think in the last half year there was kind of a lack of interest and some management changes that occurred at the mall that, when coupled with the economic downturn in October, it just became too much of a burden for the owners to bear.”
Ross said he envisions the mall as an ideal location for government offices and private business and retail. “It’s a great location, probably the best in the county,” he said.
Town Attorney Robert O’Toole said he believed the bankruptcy of clothing retailer Steve & Barry’s last November pushed the mall over the edge.
O’Toole said the mall’s owners told town officials that the only year the mall has broken even since they took it over was the first full year Steve & Barry’s operated in The Summit.
Anthony told town officials that the owners had recently brought in a consultant to review the financial shape of the mall.
Town officials plan to hold a meeting for mall tenants at 9 p. m. today in the Wheatfield Community Center, 2790 Church Road.
,a href=mailto:"abesecker@buffnews.com">abesecker@buffnews.com , djgee@buffnews.com
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