Destiny USA gets 5-year extension on $430M in loans.
Syracuse, N.Y. -- Destiny USA, the largest shopping mall in New York, has received a major reprieve on $430 million in mortgage loans that were due to mature earlier this month.
Details of the deal were not immediately disclosed. But a five-year extension gives Pyramid the breathing room it needs as it attempts to redevelop the substantial amount of empty space left behind by the loss of several major tenants in recent years.
“The five-year extension of Destiny USA’s loans allows Pyramid to continue to reinvest in the shopping center, ensuring its health, vibrancy and dominant positioning in Central New York,” the company said in a statement.
Pyramid CEO Stephen J. Congel, son of the company’s late founder, Robert Congel, said the strength of the shopping center and Pyramid’s “continued efforts to reimagine, redefine and enhance the guest experience enabled us to successfully extend the loan.”
“Now more than ever, lenders and municipalities are realizing the importance of the operator behind these properties,” he said. “That’s precisely why the lenders are so willing to work with Pyramid and why we continue to be successful in these collaborative efforts.”
The mortgage loans -- one for $300 million and one for $130 million -- were due to mature on June 6. However, Pyramid had notified its lenders earlier that it would not be able to pay off or refinance the debt by that date. That notice sent the loans to a special servicer, Wells Fargo, which began negotiations on an extension.
Lenders had little choice but to extend the loans. The mall’s value has fallen, by one industry estimate, to just $140 million, which is far less than the $430 million balance on the mortgage loans and approximately $285 million in other debt on the mall. So foreclosing on the mall and selling it would have meant a big loss for lenders.
The mall, which opened on the south shore of Onondaga Lake in 1990, remains the premier retail attraction in Central New York, with 2.4 million square feet of leasable space. It has lost many of its largest tenants, however, with the latest departures including J.C. Penney and Lord & Taylor in 2020 and Best Buy in 2021.
Shoppers have been returning to the mall in larger numbers this year, however, and Pyramid has brought in new tenants, including Bullfinch Brewpub, Hobby Lobby, Hugo Boss, Offline by Aerie, Ardene, Anthropologie, Aloha Crab, Mediterranean Grill and Sake Japan. Pyramid has said it will be welcoming a host of new tenants soon, including Rue 21, Get Air Trampoline Park and Lovisa.
Rick Moriarty covers business news and consumer issues. Got a tip, comment or story idea? Contact him anytime: Email | Twitter | Facebook | 315-470-3148