Palisades Center Claims Clarkstown’s Restrictions On Mall Expansion Violates Constitutional Rights
By Tina Traster
The Palisades Center is back in federal court fighting a town-imposed restriction limiting its right to build out and lease an existing but unused 250,000-square-foot section on the mall’s fourth floor. The mall needs town and voter approval in order to expand.
Back in 2002, voters overwhelmingly said no to the mall’s expansion after the town held a referendum to release the mall from the “Restrictive Covenant,” that prohibits expansion.
“We’ve been given the opportunity to re-argue and reframe our position in front of the same judge.”
Although part of the $50 million lawsuit was dismissed back in June, U.S. District Judge Nelson Roman gave EklecCo NewCo, the Delaware-based LLC that owns Palisades Center, the chance to “amend its complaint” to show that other developments in town that were built in the three years prior to the August 2016 suit was filed were not subject to similar restrictions.
In the June 18th decision, the judge dismissed EklecCo’s 5th amendment claim outright, but allowed the company to re-plead the portion of the case that deals with their 14th amendment rights guaranteeing equal protection under the law.
“We’ve been given the opportunity to re-argue and reframe our position in front of the same judge,” said David Aitken, director of government affairs for Pyramid Management Group LLC, the mall’s management group.
At issue is an agreement the Palisades Center’s developers say they were compelled to accept – that any expansion of the 1.85 million of leasable space would require both town and voter approval. The mall wants to expand into 250,000 square feet of leasable space within its existing footprint.
Last fall, the Palisades Center acted on the federal court’s invitation to amend its complaint. The amendment argues that The Shops at Nanuet was not subjected to similar restrictions and can expand without voter approval. On October 25, 2018, the Town sought to dismiss the case, asserting, among other things, that the Shops at Nanuet and the Palisades Mall are not comparable properties.
That motion is still pending
Councilman Donald Franchino, whose ward includes the Palisades Center, says the mall should be allowed to expand into its empty space without a “permissive referendum”, or voter approval. “This is not 20 years ago,” said Franchino. “It’s long overdue. The mall should be allowed to expand. Sales from the mall represent the lion’s share of the town’s tax revenue.”
The center paid $23.5 million in annual sales tax and $21.4 million in property taxes in 2018.
This year the Palisades Center is celebrating its 20th anniversary. The mall has become an integral part of Clarkstown, and Rockland, both as a destination for dining, shopping and entertainment, and as a partner to myriad nonprofits and their causes. Center officials say the mall is the 3rd largest shopping, dining and entertainment destination in New York, and the 12th largest in the country. Recent studies show 98% of mall visitors come from outside Clarkstown and 76% visit from outside the county.
But the challenge going forward is to keep the center fresh, dynamic and up to date with offerings beyond shopping and dining. In 2018 more than 146 million square feet of retail space disappeared from malls and shopping malls. Amazon and e-commerce have taken a tremendous bite out of retail sales across the board. J.C. Penney recently closed its mall store. Many chain stores are closing stores in rapid succession. Lord & Taylor, one of the mall’s anchors, is also closing multiple stores, including its flagship store in Manhattan. The children’s clothing retailer Gymboree is filing for bankruptcy for a second time in two years and will close its remaining 900 stores, according to media reports. That includes its store in the Palisades Center.
Aitken says the Palisades Center is 92% leased but center officials are worried about the impact the American Dream Meadowlands will have when it opens in the spring. The $3 billion retail and entertainment destination, which is being built by developer Triple Five, is a concept without parallel.
Palisades Center officials say the “experiential” tenant category is the fastest growing element at malls. The unused 250,000 square feet of space is situated on the fourth floor, which has the height for these kinds of attractions.
The American Dream Mall, which will be 55% entertainment, will include an 8-acre water park, an 8.5-acre Nickelodeon Universe theme with two record-setting rollercoasters — the Spinning Coaster, the tallest and longest free-spinning coaster in the world, and the Euro-Fighter. It is expected to be the largest indoor theme park in the western hemisphere when it is complete.
There will be a huge LEGOLAND Discovery Center with a 4-D cinema, LEGO brick pool, rides, and classes for kids. There will also be the first Sea Life aquarium in New Jersey. It will feature a tropical ocean tan with a walk-through underwater tunnel.
Ski and snowboarding lessons will be available at the largest indoor ski slope in the western hemisphere. There will also be an ice-climbing wall and an NHL-size hockey rink.
KidZania, a miniature city run by kids 4 to 14 years old, will have its own currency and companies like Honda, Sony, Kellogg’s, Coca-Cola and others have sponsored businesses and landmarks in the attraction.
Moviegoers will be able to smell scents in the films they watch in Cinemex’s 1,400-seat, dine-in movie theater with X4D technology. A hotel is in the planning stages and could open a year after American Dream.
Between 30 and 40 million people are expected to visit American Dream within its first year of opening.