HAMBURG, N.Y. — The McKinley Mall in Hamburg has been suffering in recent years, like many area malls with the loss of major retail stores. That situation eventually lead the property to foreclosure under court guidance and a mortgage firm in Texas.
Now a new potential buyer has made an offer which reflects how the value of the property has drastically declined. And town leaders are "very concerned" about what might happen under this possible new ownership interest.
Hamburg Town Supervisor James Shaw has this bottom-line assessment: "This buyer is buying at a bargain-basement price."
Indeed the tentative deal calls for the McKinley Mall, which is in receivership, to be bought by an LLC formed by the Long Island-based Kohan Retail Investment Group for $8.5 million pending approval from a state judge. Hamburg Town Supervisor James Shaw says the mall was assessed for $22 million just four years ago. But with the loss of major anchor tenants like Sears and Macy's and a 30 percent vacancy rate, it was recently cut down to $10.8 million, and now this even lower purchase offer.
So the pending sale of this mall is creating a lot of uncertainty and downright unease for Hamburg town officials considering the very mixed track record of this firm which is trying to acquire it.
Shaw says, "I am concerned that a developer has a long-range vision that is creative and has pockets deep enough to fund that vision. I don't know enough yet about this developer."
2 On Your Side was not able to reach the Kohan Retail Investment Group founder and CEO Mike Kohan. But the firm's website mentions an emphasis on a social gathering with shopping and a focus on small, locally owned businesses instead of fading big-box retailers. It also states an interest in distressed retail properties. The property firm currently holds 40 or so malls around the country which are shown on the website.
As Supervisor Shaw is aware, a search shows that while there may be some success in areas like Tulsa, Oklahoma, there is also a checkered corporate legacy of sorts. There are reports of property tax delinquencies and even unpaid utility bills for the Kohan firm. Our Tegna station in Cleveland, WKYC-TV, reported that the situation recently affected the former Chapel Hill Mall in Akron, Ohio which was eventually sold in April to become a business park.
Supervisor Shaw had hoped for a creative buyer for McKinley Mall with maybe a sports complex or a retail-residential mix like the Eastern Hills conversion plan. For now, Shaw says he'll reach out to Kohan with the hope he could learn more about the company's plans. But Shaw says the town may also pass along its concerns to the state judge who must sign off on the deal.
Shaw calls the property a commercial hub for the town with its 60,000 residents and other Southtown communities. He reflects on the property this way: "There are so many great things you could potentially do if the developer has the knowledge and the financial ability to make it happen."