The co-owners of del Lago are once again asking state and local officials in New York for a bailout. Stop us if you’ve heard this one before.
Wilmorite Management Group is one of the largest real-estate developers in the region, and it is struggling to pay its bills across its portfolio. The group has already sought assistance for the floundering del Lago at least twice this year.
This request is not related to the upstate NY casino in Waterloo, though. This time, Wilmorite is seeking public help to keep one of its malls in Monroe County open.
More trouble for del Lago developer
The property in trouble is the Mall at Greece Ridge, which celebrated its 50th birthday last year. The large complex in the small Town of Greece holds about 125 shops and restaurants within its 1.6 million square feet.
In 2012, Wilmorite negotiated a payment-in-lieu-of-taxes (PILOT) deal to help cement its future costs. The county agreed to lock the property value at $76 million for 25 years, allowing the developers to make ongoing payments on a fixed scale. The agreement stands until 2038.
Five years into the deal, it’s apparently not working out for Wilmorite. Here’s Senior Vice President Dennis Wilmot:
We have approached Imagine Monroe about an amendment to the PILOT. Namely what we are asking for is an increment or a portion of the current taxes to be distributed back to the property to be exclusively allocated for capital expenditures.
PILOT deals are a common economic tool for big businesses in New York. It’s fairly uncommon, however, for a company to seek renegotiations after the fact.
Imagine Monroe is the agency responsible for business development in Monroe County.
What the heck, Wilmorite?
This is becoming quite a trend. In the last five years, Wilmorite has asked for tax deals on at least four of its NY properties.
- Mall at Greece Ridge (Monroe County)
- Marketplace Mall (Monroe County)
- Eastview Mall (Ontario County)
- Del Lago Resort & Casino (Seneca County)
The group has already sold off or shut down the majority of its mall empire over the years, including another in Monroe County. “Retail has been under siege,” Wilmot told the town board of education this week.
To a large extent, this is simply a sign of the times. Traditional malls are going extinct across the country in this modern age of internet shopping. The retail market in New York has been especially lean for decades now.
Speaking to WHEC, financial advisor George Conboy expressed some skepticism about this request from Wilmorite:
This is a skilled, experienced and savvy developer who knows their way around political arrangements. If they can squeeze a profit out of renting a store, squeeze a profit out of running a casino, or squeeze a profit out of the taxpayers — I’m sure to the developer, a dollar’s profit is a dollar’s profit.
Think of the children, though.
Under its new proposal, Wilmorite would keep $6.2 million of the money obligated to the local school district over the next decade. The onus would fall on the good people of Monroe County to make up the difference.
Conboy summed it up best:
You have to ask yourself, how much taxpayer support should there be for a business that taxpayers themselves are not supporting with their shopping dollars?
Help is on the way?
Regarding del Lago, NY lawmakers have mostly rejected the idea of providing financial assistance. Legislative leaders have uttered a few choice words about Wilmorite’s brazen revenue forecasts, in particular. Del Lago missed its own projections by $100 million last year.
Regarding the mall, however, it sounds like the local government is willing to lend a hand.
“We have many residents that are gainfully employed at that mall,” Town of Greece Supervisor Bill Reilich said. “And we’re not going to let those jobs just vaporize.”
Even with a tax break, Wilmorite would still be a significant contributor. According to the Rochester Democrat and Chronicle, the mall brought in around $200 million in total sales during 2017, generating more than $3.5 million in PILOT payments.
- Monroe County: $721,467
- Town of Greece: $588,408
- Greece Central School District: $2,344,686
Those three groups will vote on the amended proposal in September.
Statement from Wilmorite
On Wednesday, Wilmorite published a statement regarding the PILOT situation in Monroe County.
As consumer spending habits continue to evolve, so must the mall. The cost of retaining and bringing high quality tenants to the mall has dramatically increased over the past few years.
This coupled with the challenges of recent industry wide closures and bankruptcies of retailers, such as Sears, is why we are requesting an amendment to the current PILOT.
This amendment will help to provide some of the necessary funds to continue The Mall at Greece Ridge as a vibrant part of the community and a viable shopping center. The requested funds will be exclusively allocated for the capital expenditures and tenant inducements at the mall.
The PILOT in 2013 allowed us to successfully replace a struggling department store with a street of shops and restaurants that generated significantly more traffic and sales for the mall. This amendment will help us achieve our collective goal to continue the mall to be a desirable place to shop and gather.