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Several Regional Malls Have Reinvented Themselves With Housing, Amenities, And Public-Private Partnerships
ANALYSIS
Retail is dead. Long live retail!
Okay, maybe not dead but definitely in a state of transition, particularly the “mall,” once the iconic American symbol of consumerism.
Pundits over the past decade have been tracking the demise of retail malls, some of which became “ghost” malls or “zombie” malls because retail gravitated online. The pandemic didn’t help. Other malls are still holding on. But the most successful have read the teas leaves and embarked on a course of reinvention.
In “Old Malls, New Uses: A Playbook For The Adaptive Reuse Of Mall Properties,” Pattern for Progress, a think tank, takes a look at Hudson Valley Malls and closed resort properties. The report details how some mall owners have leveraged properties into viable ventures by mixing up their offerings, including housing.
Both of Rockland County’s major retail malls are suffering. The Palisades Center is in foreclosure and Simon Property Group, which owned the Shops at Nanuet, sold it to local developer Gabe Alexander last week for $60 million. The malls have succumbed to competition from online retail, aggravated by the pandemic, aggravated by inflation. The Shops at Nanuet, for example, which debuted in 2013, transformed from a top-brand upscale outdoor mall to one filled with down-market replacements and chronic vacancies. Both the Shops at Nanuet site and the Palisades Center have or had vacant hulking former department stores, a reminder of bygone era of shopping.
The Shops At Nanuet lost Macy’s and Sears, and most of its credit rated tenants over the past six years. Instead, the stores are filled with phone fixers, play spaces, and furniture flea-markets, while Apple, Regal Cinema, 24 Hour Fitness hang on. A portion of the long-empty former Macy’s building (separately owned by Metropolitan Realty) at the Shops At Nanuet is home to big box At Home, the balance is occupied by Storage King.
The Palisades Center, built in 1988, was in its heyday around 2010. But today, its two vacant anchors (JC Penney and Lord & Taylor) serve as a reminder of the controversy surrounding its original construction and the size of the project when it was first proposed. The mall is mired in a foreclosure action; a receiver has been appointed to collect rents and care for the property.
Both malls in 2024 settled property tax challenges with the Town of Clarkstown. The owners claimed Clarkstown had over-assessed and over-taxed the properties for many years. In the end, Clarkstown and the two affected school districts (Clarkstown Central and Nanuet Union Free) refunded tens of millions of dollars to the owners, with their budgets negatively impacted for years to come.
Mall owners that want to survive have to be agile — even if that means tackling zoning changes. Both The Shops at Nanuet and The Palisades Center would need zoning changes to build housing. Over the years, Clarkstown officials have rebuffed developers’ efforts when they’ve floated the idea. But the town may have to choose between reinvention and ghost malls, at some point.
The Pattern for Progress report spotlights repurposed shopping malls in Westchester, specifically the White Plains Mall. It was demolished in 2022 and has evolved into a housing development with 900 units; the Galleria Mall, also in White Plains , which is vacant and being repurposed into a transit-oriented, mixed-use development; and the New Rochelle mall, a former indoor shopping mall that was replaced by an entertainment, retail and residential complex.
In Orange County, The Newburgh Mall has been reinvented with a casino, and new tenants including Harbor Freight, O’Reilly Auto Parts, and Planet Fitness in an open-air retail strip center. And, the Pyramid-owned Galleria At Crystal Run in the Town of Walkill, an active mall property with plans to add nearly 500 units of housing and hotel. Pyramid own the Palisades Center in West Nyack.
Seeking Out What Works
Pattern For Progress interviewed several sources who are participating in the redevelopment of mall properties in New York and nationwide. The think tank spoke with local government officials, economic development authorities, engineers, and architects to understand what it will take to make malls — or mall sites — healthy again.
Malls are likely “the most active asset class being redeveloped in the current real estate market,” according to StoneCreek Partners, a Las Vegas-based real estate advisory firm that tracks about 150 shopping malls in various stages of redevelopment. They have found that the dominant redevelopment concept works around “20-minute communities” – developments that replace mall properties with walkable, mixed-use communities that include housing, entertainment, restaurants, public space, retail, and education and health centers, interconnected by sidewalks and trails.
One property leveraging that concept is the The Apex at Crossgates in Albany, developed by Pyramid Management Group, where a $58 million investment includes 222 townhomes and apartments in a portion of the mall’s parking lot that will feature a pool, dog park, pickleball court, and other amenities.
“Former mall properties are often great locations for 20-minute communities because their large buildings, expansive parking lots, and surrounding lands offer a large canvas for master planning,” the Pattern report says. “The sites generally have utilities such as water, sewer, and ample electricity. And, in some locations, developers have found that former mall properties have good connections to surrounding communities through existing sidewalks, mass transit, or other infrastructure.”
20-minute communities on former mall properties replace fallow retail with vibrant communities and provide direly needed housing. Walkable communities with access to transportation provide neighborhood-based employment, foster the utilization of public transportation, and reduce reliance on cars and the need for large parking fields.
Also studied is the use of eminent domain (an example includes the taking of the Boulevard Mall by the Town of Amherst in suburban Buffalo) to redevelop large, under-utilized sites and replace outdated malls with plans for new communities that include housing, retail, and other uses where developers are stymied or unwilling or unable to invest in their existing assets.
In Kingston, the city is utilizing eminent domain to take the site where a mall was promised years ago on a 3.5 acre parcel at Broadway and Garraghan Drive but never built in the Rondout District. The city is seeking to do a public/private partnership to redevelop the property into a mixed use, residential community adjacent to its vibrant Rondout waterfront district.
Open-air neighborhood shopping centers that are anchored by a grocery store, like the Newburgh Mall and the Shops At Nanuet, are in demand. The Stop-N-Shop that replaced Fairway at the Shops at Nanuet has a 20-year lease with four five-year options. According to Green Street, a real estate research firm, pedestrian traffic to grocery stores was up 12 percent in the third quarter of 2024 compared to the same period on 2019. Grocery-anchored centers traditionally fill smaller spaces with small businesses that don’t compete with online players, such as coffee shops, medical users, hair and nail salons.
Nationally, rising occupancy rates in outdoor retail centers have drawn institutional investors.
According to the Wall Street Journal, at least $10 billion worth of U.S. open-air retail portfolios are expected to change hands in 2025, based on a study by CBRE, a real estate specialist.
While the open-air concept seems viable, the lessons of the “20-minute community” should not be lost, and the addition of housing options in proximity to open-air malls should be a priority for developers and municipal planners alike, experts say.
The Pattern report provides a list of resources for economic development, property owners and investors to consider, including links to articles from the Urban Land Institute, StoneCreek Partners, Gensler Architects, and Camoin Associates.
