Dismantling of Palisades Center Mall Draws Closer

The endgame of the distressed mall Palisades Center is coming into focus.

Last week, a state judge granted a summary judgment to Wilmington Trust, which holds $418.5 million in debt backed by the West Nyack mall, the Rockland/Westchester Journal News reported. The judge also appointed a referee to determine how much Wilmington Trust is owed and if the mall can be sold piecemeal.

Wilmington Trust, acting as a trustee for CMBS bondholders, filed to foreclose on the 2.2 million-square-foot shopping and entertainment complex in 2023. It claimed Syracuse-based owner Pyramid Management Group defaulted on the loan tied to the Rockland County property.

JPMorgan Chase and Barclays provided Pyramid with the loan in 2016. In the succeeding years, however, anchor tenants, including JCPenney, jumped ship. Covid-related business closures only worsened matters.

The loan was due to mature in April 2021, but Pyramid asked for a temporary moratorium on payments early in the pandemic. The two sides reached a standstill agreement in June 2020 and extended the loan’s maturity date. In the fall of 2022, however, Pyramid allegedly went into default after failing to make good on the payments.

Spinoso Real Estate Group, which did not comment to the Journal News, is operating the property. A tax settlement deal between mall ownership and the town of Clarkstown pegged the mall’s market value at $300 million; appraisers recorded the property’s value at $425 million in 2020, according to Trepp, less than half of the $881 million it was valued at in 2016.

Located roughly 20 miles north of New York City, Palisades Center is one of the nation’s largest malls. It was developed in 1998 and features a ferris wheel, ice rink and 21-screen AMC movie theater.

A virtual hearing in the case is slated for the beginning of August.

It’s been a challenging week for Pyramid. The Pyramid affiliate that owns Destiny USA in Syracuse — the biggest mall in New York — defaulted on a $300 million mortgage.

— Holden Walter-Warner