FEATURE ARTICLE, SEPTEMBER 2004

THE RIGHT PLACE, THE RIGHT TIME
Tri-Land Properties helps strengthen the Syracuse market with the redevelopment of Market Place Mall.
Susan H. Fishman

Market Place Mall

The redevelopment of Market Place Mall is a story of being in the right place at the right time. When Westchester, Illinois-based Tri-Land Properties acquired the mall in 2002, it was a 452,000-square-foot, partially enclosed shopping center, built on 38.5 acres of land approximately 6 miles north of downtown Syracuse, New York. A 48,000-square-foot Price Chopper Supermarket and a 22,000-square-foot Champions Fitness Center occupied the mall. Other tenants included Pet Express, the Syracuse Obedience Training Center and a freestanding Wendy’s restaurant. The remaining 375,000 square feet were vacant. Tri-Land purchased the property after a thorough analysis of the markets in upstate New York.

“Upstate New York isn’t necessarily a gangbuster place in terms of population growth, but it’s very solid,” says Tri-Land President Richard Dube. “The market was very vibrant, retail-wise, but it was missing retailers like Kohl’s, Target and Wal-Mart Supercenter, and no supermarkets in Syracuse had really invested in the town. So, after looking at the whole market, I felt that the big boxes had to come here.”

Dube remembered Market Place from one of his first forays in the supermarket business more than 35 years ago. When he went back to research the property for Tri-Land in 2000, he was shocked to find more than 2.5 million square feet of vacant mall space in the area. There were four vacant malls in town — including Penn-Cann Mall, a 764,000-square-foot mall directly behind Market Place, and a direct competitor for tenants; and Market Place Mall, which was about 85 percent vacant at the time.

In 1988, Great Northern Mall opened 6 miles northwest of Market Place, and in 1990, Carousel Center, currently the dominant retail mall in the area, opened 5 miles south of Market Place near downtown Syracuse. The opening of the two malls contributed to the decline of Market Place and Penn-Cann malls leaving little opportunity for survival as an enclosed mall.

Three developers had Market Place under contract from the lender, John Hancock Life Insurance Company, before Tri-Land’s interest in 2000. So Tri-Land had to convince Hancock that it was the right developer for the job. Hancock acquired Market Place through mortgage foreclosure in 1995 and held it for 7 years while attempting to dispose of it, making no capital investment to improve the property during that time. Two years and 18 contract extensions later, Tri-Land signed a contract.

With Price Chopper on board, Tri-Land’s redevelopment plans were to convert Market Place Mall into a strip center, anchored by the 70,000-square-foot Price Chopper and a 140,000-square-foot Lowe’s Home Improvement Center. The first phase of the center opened on June 10, 2003, and included Price Chopper, Dollar Tree, Petland, Nextel and UPS. The second phase of the project, which includes a 140,000-square-foot Lowe’s Home Improvement Center, a 25,000-square-foot OfficeMax, Blockbuster Video, Panera Bread, Supercuts and 15 additional stores began construction in August and is projected to open in spring 2005.

“It’s probably the first deal in our history where leasing has not been the issue,” notes Dube. “Once the Price Chopper lease was signed, we only had 20,000 feet that we built in the first phase that went very quickly. And now with the announcement of Lowe’s and the rest of the project, it’s really got a lot of steam behind it.”

Today, along with Market Place Mall, many developments are changing the retail landscape in Syracuse. In 2000, Roger Burdick, whose family owns 12 automobile dealerships in the greater Syracuse area, purchased the Penn-Cann Mall. Burdick’s plan is to redevelop Penn-Cann Mall into Drivers Village, an automobile sales and service mall that will include 23 automobile franchises, all operated by the Burdick family. The combined investment in the Market Place and Penn-Cann Mall redevelopments is $50 million, approximately $25 million per redevelopment.

Another area center, Fayetteville Mall, has been redeveloped into a new 350,000-square-foot community strip center, anchored by Kohl’s, Target, P&C Food Markets and Stickley Furniture. The Home Depot opened a new 95,000-square-foot store north of Market Place. In addition, Carousel Center has plans for a $900 million expansion, which will double the size of the 1.5 million-square-foot center and will offer hotels, restaurants and entertainment.

“So we guessed right, because here it is 2004, and Lowe’s has come into town, and Target and Wal-Mart are coming with their supercenters,” says Dube. “So we caught the market at the right time.”

The new Price Chopper store, which completed its first year of operation in June, experienced sales of $6 million over initial store projections.

“That’s also a reasonably good barometer that we’re in the right place at the right time,” says Dube.

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