SYRACUSE — Destiny USA, New York’s largest mall, received a major reprieve on $430 million in mortgages that were due to mature earlier this month.
Pyramid Management Group, which owns the mall, said on Thursday it secured a five-year extension to loans from lenders.
Details of the deal were not immediately disclosed. But a five-year extension gives Pyramid the respite it needs as it tries to redevelop the substantial amount of empty space left by the loss of several major tenants in recent years.
“Destiny USA’s five-year loan extension allows Pyramid to continue to reinvest in the mall, 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 mall and Pyramid’s “continuing efforts to reinvent, redefine and improve the customer experience have enabled us to successfully extend the loan.
“Now more than ever, lenders and municipalities realize the importance of the operator behind these properties,” he said. “This is precisely why lenders are so willing to work with Pyramid and why we continue to be successful in these collaborative efforts.”
The mortgages – one for $300 million and one for $130 million – were due to mature on June 6. However, Pyramid had informed its lenders earlier that it would not be able to repay or refinance the debt by that date. This notice sent the loans to a special agent, Wells Fargo, which began negotiations on an extension.
Lenders had no choice but to extend the loans. The mall’s value has fallen, by an industry estimate, to just $140 million, well below the $430 million balance on mortgages and about $285 million in other debt. on the mall. So, seizing the mall and selling it would have meant a big loss for the lenders.
The mall, which opened on the south shore of Lake Onondaga in 1990, remains the main retail attraction in central New York, with 2.4 million square feet of leasable space. However, it has lost many of its biggest tenants, with recent departures including JCPenney and Lord & Taylor in 2020 and Best Buy in 2021.
Destiny has been hurt during the coronavirus pandemic, which forced it to temporarily close in 2020 and cut off its supply of Canadian buyers.
However, shoppers returned to the mall in greater numbers this year and Pyramid 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 announced that it will soon welcome a host of new tenants, including Rue 21, Get Air Trampoline Park and Lovisa.