voter referendum

Clarkstown Voters On Nov. 3 To Decide Palisades Center’s Future

Business Real Estate Retail

Ballot Question Asks Residents To Give Mall Green Light To Use & Develop Additional Space

By Tina Traster

In what is expected to be unprecedented voter turnout for the Nov. 3 presidential election, a large number of Clarkstown voters will also be asked to make a critical decision regarding the Palisades Center’s ability to use and develop additional gross leasable space in the mall.

The ballot question, located on the flip side of the ballot with the electoral candidates, asks Clarkstown voters to say “yes” or “no” to the following question:

“Do you agree that the Town of Clarkstown shall lift the restrictive covenant that limits the Palisades Center Mall to 1.854 square feet of gross leasable space?

The long festering issue – the subject of litigation and much wrangling locally – is one Clarkstown voters get to decide by referendum, though it impacts the entire county. The Palisades Center pays approximately $43.5 million annually in property and sales taxes. To the county, the mall pays $1.4 million in taxes and an estimated sales tax of $22 million.

The town of Clarkstown receives $4.8 million in property taxes while Clarkstown School District takes in $14.3 million.

In a tele-town hall meeting Wednesday, that attracted more than 3,000 participants, Supervisor George Hoehmann explained a “yes” vote will allow the mall to use 250,000 square feet of existing empty space on the main floor and build another 250,000 square feet outside the “four walls.”

Several callers wanted to know what the mall planned to do if it received the green light but Hoehmann repeatedly said the town has no knowledge about the mall’s intentions. But he tried to allay fears about future building, particularly with some callers who still harbor bitter feelings toward the mall from two decades ago.

“Any increase in the use of space is subject to the approval of the town’s planning board,” he said. “This is not a blank check.”

The Palisades Center, like malls across the nation, had been witnessing a shifting landscape of big box and department store retailers. In recent years, it has lost both J.C. Penney and Lord & Taylor, as well as Bed Bath & Beyond and a slew of other stores. The coronavirus pandemic has accelerated both the temporary and permanent closure of many retailers, restaurants, and entertainment companies, including Dave & Busters, which shuttered its mall location recently.

Prior to COVID, there had been much speculation that the mall needed to reinvent itself with a new mix of offerings. Taking its cue from others, as well Pyramid’s own Destiny Mall in Syracuse, mall executives have talked behind the scenes about the potential of reconfiguring the mall to include a hotel, conference center, and more entertainment features.

“Retail is not the future,” said Councilman Donald Franchino, who has been a strong proponent of bringing the issue to a vote and allowing the mall to expand its offerings. “The mall has to be repurposed.”

It is unclear as to what kind of tenant would need space at this time, given the continued uncertainty of COVID and a still-uncertain date for a vaccine.

Town Planner Joe Simoes said the mall is zoned for retail, office, entertainment, restaurants, hotel, conference center. It is not zoned for housing.

Simoes added that newly proposed plans would be subject to environmental review as well as traffic and parking studies. He noted that the mall has an excess of at least 3,000 parking spots to date.

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 utilization of the unused space.

The debate over a vote on the covenant to lift the restriction has been going on for years.

The mall and Clarkstown are still awaiting a ruling from the Second Circuit Court of Appeals over the mall’s efforts to lift the restrictions preventing it from expanding beyond its present 1.85 million square feet without voter approval.

If the Second Circuit Court of Appeals does not rule prior to Nov. 3rd and voters decide to let the mall expand, the suit might be moot. However, Pyramid Companies, which owns the mall, could file claims for attorney’s fees if the court determines them to be a “prevailing party,” and the case would be remanded back to the district court.

Over the past few years, some town leaders had hoped backroom negotiations would yield a compromise: the lifting of the covenant in exchange for an extended moratorium on a tax challenge.

On Wednesday, Hoehmann said the town board “cannot act unilaterally to lift the restrictive covenant.”

In May, the mall filed a grievance with the Town of Clarkstown to slash its tax bills by 50 percent, citing economic difficulties. Pyramid was seeking a reduction of full market value of nearly $466 million to about $230 million. The Clarkstown Board of Assessment Review denied the grievance. The mall owner has a July 31 deadline to file Tax Certiorari petition with the New York State Supreme Court.

Eklecco NewCo LLC, the company that owns the Palisades Center in West Nyack, in July filed a petition for a tax certiorari in Rockland County’s Supreme Court.

The mall is seeking a reduction of full market value of nearly $466 million to about $230 million. However, taxes are not levied on full market value; they are assessed after an equalization rate is applied to the full market value to determine an assessed value. Should the mall succeed, its assessed value would be reduced from $140 million to $60 million.