LANESBOROUGH, Mass. — The Baker Hill Road District has asked the state to allow it to purchase the Berkshire Mall.
The mall isn't currently for sale but the district wants to be in position to acquire the property and needs legislative approval. The district had previously offered to purchase the property with the concept is to use the district as a tool in the creation of a public/private partnership with a private developer for reuse. The Baker Hill Road District is responsible for building and maintaining the connector road.
"We can restore some value back into the property," Mark Siegars, attorney for the Baker Hill Road District, said. "We hope to get into a partnership with a private developer to redevelop the property."
Siegars said the idea has been floating around for some time and at one point had three or four developers interested in participating.
Some of the developers were interested in incorporating some ideas that had been crafted by prior owners to build out a civic center, hotel, and conference center into a redevelopment. That concept had been included in the regional Comprehensive Economic Development Strategy, crafted through the Berkshire Regional Planning Commission.
Other concepts floated include delving into the aquaculture field, raising aquatic plants for food and an indoor sports complex. Siegars hopes for a more diverse use, which does include retail, for one of the largest parcels for industrial and commercial use in the county.
"It is time to revisit what it is and how it is used," he said on Friday. "It would restore value to the tax base and provide permanent jobs."
The mall has been losing retail tenants, with the most recent being Friday when J.C. Penney announced it, too, was pulling out. This is the third anchor to depart the mall within the last two years. Siegars said Lanesborough can't be so dependent on the retail sector. The mall was constructed in 1989 to great fanfare but the industry has changed and the property's assessment has dropped from as high as $60.4 million in 2008 to just $19.5 million or less now.
The mall's financial struggles began in 2009, in the wake of the global economic collapse, when it was still owned by Pyramid Companies. It has changed ownership twice since then.
"In 2013, we became aware that they had serious financial issues," Siegars said.
The next year the owners came to the district and asked for a "sizable" contribution to keep the mall afloat, Siegars said. The district began conversations with its financial institutions about buying the mall property but those holding the mortgage felt it would sell for more. The loan had been transferred to a special servicer, which handles default loans.
"We actually offered to buy the mall in 2014," he said.
It was sold in 2014 to Strategic Asset Services and the Berkshire Mall ended up in litigation with both the town and the Baker Hill Road District over assessments. Ultimately, a settlement dropped the assessment by $12 million, which came just before Kohan Retail Investment Group of Great Neck, N.Y., bought the property last September.
Siegars says the Baker Hill Road District was in the position to offer $4.5 million in 2014 and it was sold most recently for $3.5 million. Siegars said the district at the time had interest from a private developer on the project.
In 2015, the mall lost its first anchor in Best Buy and, in early 2016, Macy's closed. Kohan purchased the property in September of last year, after the two stores had announced closures, and has had it for seven months.
On Friday, when J.C. Penney announced it would close now, too, Kohan, said he has every intention of trying to revitalize the mall.
"We just took over this project a few months ago ... it's a process," Kohan said, adding that he has potential tenants he would like to engage in conversation to fill the vacant spaces.
Siegars said he hasn't seen a real commitment out of Kohan and that the mall is again falling behind on its tax payments. He's ready to go back to the developer he had discussed the project with in the past to gauge interest in restarting the conversation.
"We need to get control of the property," Siegars said. "We have an absentee landlord who hasn't given us any signs that he wants to redevelop the property."
But first, the district needs the ability to borrow and acquire land. Two weeks ago, state Rep. Gailanne Cariddi filed legislation which does just that.
"The bill's intent is to expand the authority of the Baker Hill Road District with the result being beneficial to Lanesborough and to all of Northern Berkshires," Cariddi said on Friday. "This is the first step but it is kind of a big one."
She's asked the Joint Committee on Municipalities and Regional Government Chairman Rep. James O'Day to move the bill along and it has already been scheduled for a hearing. Cariddi says the bill will likely be able to go right through the second and third readings after the committee vets the language. She's hoping to usher it through the legislative process as seamlessly as possible.
"We certainly want to preserve jobs and this is one way to keep that facility viable," Cariddi said. "It is an option for them to be able to pursue should the right opportunities be out there."
In a letter to Day dated March 8, Prudential Committee Chairman William Prendergast urged passage of the bill.
"During this period of decline, the Prudential Committee has been constrained in what response it could make to these events," he wrote, adding, "We strongly urge the immediate passage of this legislation so we can begin the process of investing in ourselves, investing in our community, and most importantly our future."
While the bill was only recently filed, it has been in the works since the sale of the property to Kohan in the fall. The district had been considering the options. But it was too late in the legislative year to be passed so Siegars worked on the language throughout the winter, allowing Cariddi to get a legal review of the language and file it during the timely filing period.
Kevin Towle sits on the town's recently created Economic Development Committee. He said the future of the mall is the top priority of the group.
"To lose that would have a substantial impact on the tax base," Towle said. "I think this is a way to protect the mall... we recognize the importance of the mall as a taxpayer."
The Economic Development Committee wants to keep the mall in private hands and has vowed to support efforts to keep it viable. It has teamed up with Kohan and Williams College to do a study looking at possible options for revitalization.
"The owner and the manager have been supportive of the efforts," Towle said.
The committee hasn't discussed the idea being floated by the Baker Hill Road District but Towle says "we're supportive of anything that helps the town with economic development."
Siegars says once the district gets that authority, the members will consider the possibility of making a move on the property.
"Once we have the authority to purchase the property, we have to figure out how to approach them," Siegars said.
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Berkshire Mall still needs to have lots of retail since there are so few places to shop here in Berkshire County. I hope Sears and Target stay and maybe another large store is brought in. It could also have other uses like business offices. We have enough sports facilities in the area already.