Empire Outlets, the ambitious mall on Staten Island, is itself headed for the discount rack.
Its developer, Donald Capoccia and Joseph Ferrara’s BFC Partners, and senior lenders Goldman Sachs and Sterling National Bank, have agreed to put the property into foreclosure, the Staten Island Advance reported.
The agreement will allow the restructuring of debt on the $350 million shopping center and will cost BFC its ownership of the pandemic-plagued project. The lenders may bid for control of the property at the end of the approximately year-long process, according to the publication.
Shoppers at the 340,000-square-foot mall won’t notice immediate changes, and the mall will remain open.
Goldman Sachs’ Urban Investment Group blamed the mall’s struggles on Covid. Prior to the pandemic, the center had leased nearly 73 percent of its shops, which would have met the terms of co-tenancy agreements causing tenants to pay full rent.
But mandated business closures, the collapse of tourism and the exodus of 12 retail tenants leasing a total of about 50,000 square feet upended financial projections.
The project began missing debt payments to the New York City Economic Development Corporation in the middle of 2020, when half of its storefronts remained empty and daily ferry rides to the island fell to under 23,000 a day, a 65 percent drop from the year prior.
The coronavirus isn’t the only culprit in the retail project’s struggles and other failures on Staten Island’s North Shore. The New York Yankees abandoned their partnership with the minor league Staten Island Yankees, which left the ballpark built by the Giuliani administration, and a project to build the world’s largest Ferris Wheel fell apart before the pandemic because of construction problems.
Undeterred, BFC Partners is at work on a 270-unit residential project at 475 Bay Street, which includes 9,000 square feet of retail space. Outside the island, BFC has its hand in the $1.5 billion Essex Crossing development on the Lower East Side. It was also the developer of the controversial Bedford Union Armory project in Crown Heights.
[SIlive] — Orion Jones