Rumors of a potential sale of the beleaguered Hudson Valley Mall to a firm that owns over two dozen shopping centers in the country are not unfounded, said Ulster Town Supervisor James Quigley III this week.
Liverpool, N.Y.-based PCK Development Co. LLC, the current owner of the Hudson Valley Mall which defaulted on a debt of nearly $50 million earlier this year and saw the property foreclosed upon, is expected to sell the property to Augusta, Ga.-based Hull Property Group in January. Hull Property Group did not respond to an interview request, and Terry Parisian, general manager of the Hudson Valley Mall, did not return calls left with his office. But Quigley confirmed the sale could go through next month, adding that the purchaser has a good reputation.
“[James] Hull [Hull Property Group’s owner and managing principal] came in to see me about a month ago,” Quigley said. “And through my personal industry contacts I was able to quickly get a character reference on them by speaking to several of my friends in the south who had done business with them, so I knew that they were a reputable company and I knew we were going in the right direction.”
Quigley added that Hull Property Group’s interest in the Hudson Valley Mall was affirmed by a deposit.
“I’ve met with Mr. Hull a couple of times, and he’s admitted to me that he has a written contract of sale with PCK, and that he has a deposit of dollars, he put up a forfeitable deposit for the transaction,” Quigley said. “So he has money riding on this. And they have set a closing date for January. Which means to me that, when Hull Property Group, when they consummate the transaction, will be the owner of the fee title for the mall. And they will take and bring their own people in to establish a new operational plan for the mall to move forward.”
Hull Property Group’s website lists 28 mall properties, mostly located in the Southeast, but also as far west as Victoria, Texas; a handful of properties in the Midwest; and one, Fairgrounds Square Mall, in Reading, Pa. Five of the mall properties are identified as being under redevelopment, and with the recent loss of anchor stores JCPenney and Macy’s among the empty retail spaces in the Hudson Valley Mall, Quigley said redevelopment could also be on the cards locally.
The mall was placed into receivership in June of this year, nearly a year after PCK defaulted on its debt with the U.S. National Bank Association. The Hudson Valley Mall opened in 1981, and expanded the following year and two more times in the years since.
Quigley said that Hull expressed an interest in settling tax certiorari issues with the town during a meeting last month, though the supervisor said he felt it wasn’t the right environment for the discussion.
“My answer to that is I’m not having ex parte conversations,” Quigley said. “There is a legal process that has been started. Authorize your attorneys to commence settlement negotiations. I’m not negotiating something outside of my lawyer’s purview.”
A ripple effect
While the sale and potential revitalization of the Hudson Valley Mall might seem on the surface to be good news for the town, Quigley said it could have repercussions in the retail atmosphere throughout the municipality.
“A lender who has made a $52 million mortgage that has ended up getting defaulted at $49 million always wants to find a way to get out with as much value as they possibly can after the problems become evident,” Quigley said. “In that situation there’s always going to be a change of ownership. The change of ownership is always going to give Mr. Hull a reduced basis because he’s bought it for cents on the dollar. I can’t tell you how much, I don’t know. That’s going to create a competitive situation in the Town of Ulster. Furthermore, when this transaction settles out and the issues of the real estate tax certiorari actions settle out, there’s going to be an adjustment to the real estate taxes up there. That’s going to give that property a cost benefit for any prospective tenant looking to occupy space up there. What I am most looking to focus on is the domino effect that it may have on the retail market in the Town of Ulster. Mr. Hull is going to want to repopulate his space with tenants, and that could very well mean that tenants within the market could start moving around. And that movement could destabilize other existing properties that are currently economically feasible.”
Quigley added that the economic climate in the town and surrounding communities may mean further difficult times ahead for retailers.
“People need disposable income for a productive retail environment to exist,” Quigley said. “For people to have disposable income, that means we have to have good jobs. And the battle that we’ve been fighting ever since IBM closed [in the town] in the ’90s, is how do we replace those jobs? And we have not been successful. What I’m putting forth here is that the current situation at the mall was defined by the IBM closing in the ’90s. It took that long to work its way through the system. And it has been exacerbated by the change in the retail environment, namely Internet and web-based retailing. This is a complicated problem.”