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Flagging Mall & Outparcels Transferred to “Shops At Nanuet LLC”; Simon Recently Settled Tax Challenge With Town of Clarkstown
By Tina Traster
Sources say the long-struggling Shops at Nanuet, owned by Simon Property Group (Retail Property Trust), has been sold to a local developer whose growing portfolio includes market-rate apartments, a Spring Valley shopping center with a supermarket, and recent acquisitions of a fallow summer camp and degraded bungalow colony to turn into senior and market-rate housing, though no deed evidencing the transfer has been recorded in Rockland’s public records.
As of publication, the only recorded deed was between Retail Property Group and Shops At Nanuet, LLC, which are related companies based in Indianapolis.
The properties along Fashion Drive, as well as the outparcels at 75 South Middletown Road (Banchetto’s site), 7 South Middletown Road (Verizon site) and a parcel at 17 Dykes Park Road were reported as part of the transfer. The new ownership entity, Shops at Nanuet, LLC , a Delaware LLC, is reported to have transferred its interest to Gavriel (Gabe) Alexander, Alexander Property Holdings and various partners, though no deed has been recorded yet in Rockland’s public records. The Dykes Park Road property was transferred from Shops At Nanuet, LLC to GA Ventures, part of Gabe Alexander’s companies.
Sources say the long-vacant Sears’ buildings and its outparcels were also part of the purchase by Alexander, though no deed evidencing the transfer has yet been recorded.
At the end of December, mall tenants received letters saying the mall was under new ownership. The head-spinning change of ownership shocked tenants, some of whom knew Alexander was in talks with the mall in late fall but hadn’t believed the mall was truly for sale.
By New Years, Simon had removed its signage.
While leases appear to be carrying over without modification, for now, tenants feel in the dark because Alexander has not telegraphed his intentions for the flagging mall, which has lost several credit-rated high-end tenants since it was built more than a decade ago.
RCBJ reached Alexander by phone, but the developer said he did not want to talk about the purchase.
Alexander is widely known for bringing the Bingo food market to Spring Valley, which caters to the Orthodox Jewish community. Tenants speaking on the condition that they remain anonymous said they’re worried about the mall’s plans, particularly if future tenants begin to become more targeted to the Orthodox community because a change of demographics could portend a different customer base over time.
“There are several restaurants here and they’re not kosher,” remarked one.
Valerie Moldow, president of the Nanuet Civic Association, said she’s concerned about the future of the Shops because it represents a major real estate asset in the town.
“I’d like to see responsible, commercially minded development,” she said. “I want (Alexander) to talk to us.”
While Alexander is from the Orthodox community, many of his projects are mainstream including the Pavion, an apartment building in Nyack constructed on the site of a former cosmetics plant, Mountainside in Pomona, 225 rental units on Forest Drive, as well as plans for senior living on the former Camp Merockdim (the former Camp Champion) in New City. In 2022, One75 LLC, an LLC managed by Alexander, purchased the former camp site for $3.35 million. The 9.18-acre parcel, at 175 West Clarkstown Road was last known as Camp Merockdim, an Orthodox Jewish day camp.
In Jan. 2022, Alexander, as Mountainside Pomona LLC, bought Mountainside Apartments in Garnerville, a 225-unit garden apartment community, for $42.5 million.
Alexander also has extensive warehouse and land holdings in Orangetown. In 2017, he bought 125 and 155 South Greenbush Road in Orangeburg, for $23 million. Alexander has been trying to increase the warehouses but has met with opposition from town residents. Town Supervisor Teresa Kenny recently said the developer was open to alternatives.
The developer also purchased the Oak Tree Lane bungalow colony on Oak Tree Lane in the Town of Haverstraw in 2018 for $5.2 million. The project, which displaced low-income tenants, is slated to include a mix of studio, one and two-bedrooms totaling 228 apartments in four buildings and a 10,000 square foot, one-story community center with outdoor pool, gym, multipurpose room, offices, restroom, and display kitchen. A playground and dog park are planned as well as 471 parking spaces.
Alexander appears to seek out degraded or under-utilized properties for purchase. The Shops at Nanuet has been devalued following a tax certiorari battle with the Town of Clarkstown.
In July, Simon Properties cut a deal with the Town of Clarkstown and the Nanuet School District following a protracted legal battle over the value of the mall. The Shops at Nanuet had accused the town of overinflating the mall’s assessment for years. The undisclosed financial settlement coincided with a $27.5 million property tax refund to the Palisades Center, which made the same claim against the town.
The Palisades Center had set the market value at around $155 million while the town’s most recent value for the mall was $578 million. Under the settlement, the tax assessment is now based on a value of $300 million. As a result of the settlement, the town reduced the market value of the mall property from $120 million to $65 million.
Not only did the Town and School Districts have to take on massive bond debt to pay back the taxes, but they will also have to pay interest going forward on millions of dollars of debt for many years at a time when interest rates are at a multi-year high. And, with an agreement to reassess the properties going forward, tax collections in the future will be close to half of what both the Town and School Districts had become accustomed to receiving.
It’s been just a little more than a decade since Simon Properties debuted an outdoor mall that showcased high-end fashion brands like Michael Kors, Coach, Victoria’s Secret, White House/Black Market, Jos. A Banks, and an Apple store at the Shops at Nanuet. Ribbon cuttings and grand openings in 2013 celebrated the conversion from the original enclosed tired mall, built in the 1960s on wetlands, to an open-air lifestyle upscale brand-driven center at Fashion Drive. It aimed to shoot higher than its predecessor, and to create an alternative shopping environment to The Palisades Center.
But the test of time, a changing economy, internet shopping, a global pandemic, and perhaps misjudgment as to what would be sustainable in the Route 59 corridor, led to noticeable changes in the tenant mix at the Shops of Nanuet. Over the past year or so, more mom-and-pop retailers, as well as fast fashion, discount retailers, a children’s bounce house, cell phone repair and service stores, and other off-brand enterprises filled long-empty spaces and changing the character of the former fashion-forward mall.
The former Sears Department Store at 85 W. Route 59 was shuttered in 2018, leaving a major hole in the Shops at Nanuet. Sears owned the 1960’s, 184,522 square-foot building, as well as the acreage it sits on. Sears Roebuck sold the property to SPS Portfolio Holdings LLC in 2015 for $13 million. SPS Portfolio is part of Simon Property Group’s real estate arm. The company also owns the parking lot, and the 28,067 square-foot, one-story Sears Auto tire center.
Both buildings, victims of Sears’ decline, have been vacant. A discount furniture store DEPO House occupies a portion of the former Sears Department Store.
It has long been evident that the Shops at Nanuet, along with the Palisades Center, are aching for new direction, as traditional malls continue to wither and die. Nationwide, mall owners are introducing new concepts that include direly-needed affordable housing, convention centers, public spaces – even religious institutions. Sources say Clarkstown officials over the years have let it be known to developers they opposed housing, which would require zone changes for both mall sites.
The Shops at Nanuet sits adjacent to Clarkstown’s Transit Oriented Development (TOD), a 37-acre site that was rezoned in 2019 to transform fallow industrial land around the train station into a hub of housing and commercial use, especially much needed housing for millennials and seniors. The mall is not included in the zone, but some are wondering if it should be. The TOD has not had any takers since the inception of the zoning plan.
Alexander is no stranger to housing and mixed-use development.
In 2019, Alexander Property Holdings bought Spring Valley Marketplace for $59.3 million. The shopping center has a 100,000 square-feet Bingo Wholesale, a kosher superstore that is a joint venture between the Brooklyn-based Marav USA and Osher Ad, a grocery chain with 20 stores in Israel
At the time, Alexander said he planned to mix up its tenant mix to bring in Bingo, said a source familiar with the deal. The shopping center has 340,000 square feet.
“I’m sure some of the tenants will be thrilled to be released from their leases,” the source said at the time.
Previously, the shopping center had national tenants including Target, Bed Bath & Beyond, Michaels Arts & Crafts, GameStop, Nine West. Target remains the tenant mix now included Bingo and a bevy of free-standing stores in The Marketplace, according to the website.
