Shops at Ithaca Mall

After the Shops At Ithaca Mall was sold, a representative for the new owner approached Village of Lansing officials in 2017 proposed subdividing the mall. In a nutshell, the plan is to sell anchor store spaces to their tenants, and the security implied by the big stores' investment would then attract smaller tenants who would feel secure that the big stores will stick around to generate foot traffic. The Village, for its part, has long wanted the mall to dedicate Graham Road West, the portion of the mall road that goes from Triphammer Road to the entrance to BJ's Wholesale Club, plus a portion of the mall ring road between Graham and Catherwood Roads (the two north-most of the three mall entry roads) to the Village so it can better maintain those road segments. The owner's representative, Ken Farrall, was back in January. Farrall and attorney Michael J. Gavin were back again Monday for a preliminary plat hearing before the Village Planning Board, hoping to move the subdivision plan forward with new urgency.

"Generally the budgets for the major retailers prioritize city locations first because there's more people to do the shopping in those locations," Gavin said. "As a result of the   byproducts of the protests that money has been reallocated to suburban locations. This is considered to be a suburban location. So we have several tenants that are ready to move forward, and they have budget money available both for third quarter and fourth quarter closings. So we're trying to accelerate our process to take advantage of those opportunities that we hope will allow us to re-tenant and revitalize the center."

Namdar Realty Group and Mason Asset Management, which manages and owns the mall, wants to create five subdivisions, not counting what remains of the mall once the large stores are sold.  One is a parcel behind the Clarion Inn that Namdar wants to sell to a hotel chain for a new extended-stay hotel.  In 2017 Farrall told Village officials the new hotel would not be direct competition for the Clarion because it will serve a different market of people who need a temporary residence, rather than just a few nights' stay. Gavin said Monday that the hotel chain is ready to move forward with building once the parcel is subdivided and able to be sold.

BJ's owns its store, so is not part of the proposed plan.  Target also owns its store as well as part of the road the Village hopes to take over.  Three other parcels are proposed: the Regal Cinemas parcel, Michael's, and the Dick's Sporting Goods end of the mall that includes Best Buy and stores between the two.

Mall SubdivisionsThe plan for the Shops at Ithaca Mall is to create five subdivisions, not counting what remains of the mall once the large stores are sold. Farrall confirmed that Target already owns its store, and noted that BJ's Wholesale Club is not owned by Namdar. The other four parcels that would go up for sale are Regal Cinemas; Michael's; the south end of the mall that contains Dick's, DSW, ultra Beauty, and Best Buy; and a lot behind the Clarion Hotel that is being considered for an extended-stay hotel.

Much of the meeting was spent discussing the strategy behind selling the anchor store parcels.  Gavin explained that ten year leases are a thing of the past, but the big chains are interested in owning their stores.  That not only commits them more to keeping a store they own open, as opposed to one they rent, but also shows smaller business owners that the anchor stores are there to stay.  With that confidence smaller businesses are more willing to become tenants with the assurance that the big stores will be a big draw to the mall, providing more foot traffic for all the businesses in the mall.

Gavin said that the company is not locked into the old mall paradigm, where a mall is filled entirely with retail shops.  He talked about malls that also have residential components, used for scholastic purposes, or combinations of uses.  He noted that the current pandemic might have temporary or lasting influences on the kinds of things malls would have to offer, noting that lockdown mandates have closed movie theaters for now.

Planning Board members expressed some concerns about the plan.  Board member Monica Moll said she thought the plan might be a "dream that may or may not happen".  When Gavin pointed out that property tax revenue to the Village would certainly increase with the separate parcels, as well as the value of the rest of the mall rising as new businesses locate there, Moll said that her concern was more about the character of the Village, noting that by making the mall a vibrant village center the tax dollars would naturally follow.

"The mall is very important to the Village and I'm very invested in its future," she said. "I think we all want to see it succeed and so if selling the parcels is the only way to see it succeed, then I'm on board. But right now I'm not convinced," she said, and then added, "It's not all about the tax dollars for me. It really isn't, it's about having a vibrant center of our village. What kind of businesses do you plan on asking to come? How do you see the environment as a whole, in terms of the amenities, the people that will go there... that's what I am most interested in."

That was the concern three years ago when Farrall approached the Village Trustees with the idea.  At that time Mayor Donald Hartill said he supported the plan, noting that it was the most promising idea he had seen proposed to restore vitality to the slowly failing mall.

"In reviewing all of the materials we've been presented with, it seems like that's the most attractive path forward," he said at a December 2017 Board of trustees meeting. "It certainly has a number of issues having to do with fire safety, the fact that it's a structure that has been there for 40 years.  All of these ancillary conditions really need to be satisfied.  Other than that I don't see any other path forward."

Other concerns about making the large parking area more environmentally friendly, and stormwater management were raised, and Planning Board members revived their questions about maintenance of the property.  Village Engineer Brent Cross brought up an incident, not for the first time, in which he contended that flooding at the mall during an extraordinary rain storm was the fault of the (previous) mall owner.

The July 2017 rain event was certainly unique, even for an area of the state that is prone to flooding.  Town officials were pleased that the brand new storm drains on Myers Road performed well.  But in the Village storm drains were taxed with excess water.  Hartill said that stormwater flowed into the wastewater system, pushing about 5 million gallons per day of liquid through the Cayuga Heights Sewer Treatment Plant, which has a daily capacity of 2 million gallons.  He said the plant could come under New York State Department of Environmental Conservation (DEC) scrutiny if that happens twice in one month.

"The problem was that it rained something like three inches in an hour," said Village of Lansing Mayor Donald Hartill.  "There is no drainage system in the world that can accommodate that.  There's a lot of hard surface at the malls, so there's no place for it to go."

The east parking lot at the mall filled with water, partially covering dozens of automobiles.  The Shannon Park neighborhood behind the mall also saw significant flooding.  Some of the mall stores, also flooding, closed early, including Target and Michael's.  Some shoppers were stranded for over an hour, while others waded barefoot to get to their cars that were sitting in eight inches of water.  Storm drains had such difficulty handling the volume of water that it began streaming upward from under the roads.

"The water was geysering up through cracks in the pavement, too," said Deputy Mayor Ronny Hardaway.
"You have an underground tunnel, a stormwater tunnel, under your building, which in my opinion failed there a couple of years ago," Cross said. "Wasn't big enough for the storm  events that we have. How are we, what are we supposed to know? Or how do we, uh, take into account that you've already put us on notice one time that you felt that that was our problem. And so why aren't you, why would we not think you're going to do it again?"

But Gavin argued that the incident was, in fact, a Village problem.

"Water flows downhill, right?" he asked. "My understanding of the storm event is that the water jumped the system at the top of the Hill and sheet-flowed over the property.So I didn't think it was as much the tunnel underneath it, as water coming down the roadway, like a river into the Center."

Cross said he had more information he would share in a more appropriate 'offline' venue, and Gavin said that because the proposed hotel lot is uphill from the mall that the hotel would have to handle stormwater management (which would have to be approved by the Village) as part of its development.

In 2017 Farrall had explained that stores that buy their properties would be required to sign an Easement Covenance Cross-access Restrictions (ECCR) agreement that governs cooperative needs of a mall -- kind of a mall version of neighborhood association functions.  Each owner pays dues that cover the cost of maintenance and repair of common areas, known as 'Common Area Maintenance (CAM), and capital improvements. Tenants of the smaller shops also pay for CAM in addition to their rent.  CAM is administered by the mall management, and Gavin said this system is in place for current tenants.

Planning Board Chair Lisa Schleelein and Village Attorney William Troy still worried about protecting the Village, as well as Village recourse if CAM fails for any reason, using Graham Road West as an example.

"Until fairly recently, we had a pothole that became the talk of the Village," Troy said. "You could put a cone in it and the cone would start to disappear and nobody ever fixed it. It wasn't our property. We couldn't do it. So it's a small thing, but a lot of people look at this and say, that CAM doesn't seem to work very well."

"Well, the actually the bigger issue is that everybody thinks it's the Village that owns that road. So it's a matter of 'Why don't you do something, Village?'," Schleelein said.

They said they worried that if the owners abandoned the mall at some time in the future, the Village would be on the hook for maintenance.  Village Attorney William Troy asked to see a copy of the ECCR at Monday's meeting.  Gavin said he believed a copy had already been forwarded with other materials, bu said he would send it again for Troy to review, and noted that the owner is highly motivated to maintain the facility.  When asked whether the owner had abandoned or sold any of its mall properties to date, Gavin said he was not aware of any being sold in their entirety (in other words, in cases like the Shops at Ithaca Mall where this sort of plan has been implemented, individual parcels have been sold, but the overall malls have not).

He added, "As long as you think the value of the property is worth more than the cost to mow, the stormwater, and do the upkeep of it, we have significant incentive to do the work... in addition to the fact that we get paid to do it."

Planning Board members asked for examples of other properties at which the strategy of selling the anchor stores was successful at restoring malls' vitality, and Gavin named a number of the owner's other properties where versions of the plan is working.  Moll said she would also like to know how other retail property owners in and around Tompkins County were attracting tenants.

Consideration of these kinds of issues is normal for the Planning Board as they work to understand new projects and how they impact the Village's Comprehensive Plan, zoning ordinance, and the overall character of the Village.  The only time planning boards can impose new conditions on an existing property is when a new project is brought before them, so a sort of shopping list of conditions that the Village was powerless to address typically comes up when dealing with those issues can be made conditions of approving the new project.

Even though the tone of negotiations isn't officially a part of the process, it can certainly affect the outcome for developers.  It is no secret that this Planning Board has been mightily annoyed with the developer of another project, and their perception of his behavior has been a talking point when deciding on issues specific to his project, and even general issues such as the recent extension of the term of building permits that impact all developers.  That was certainly not true of Monday's meeting with the mall representatives.  The tone of the meeting was cordial, with both the Village and the Developer promising to provide more information, meet before the next Planning Board meeting to work out issues, and to continue discussing the plan.

The hearing will continue at the Planning Board's August 10th meeting.