The reimagining of the Oakdale Mall to a $117 million mixed-use facility overcame a big hurdle Wednesday when the project was approved by the Agency.
The Broome County industrial development organization approved the payment-in-lieu-of-taxes agreement unanimously, with one abstention.
The approval puts in motion the purchase of most of the Johnson City property by a local developer, along with the construction and renovation for what will be named Oakdale Commons.
The space could feature a mixture of retail, manufacturing, technology, health care and other amenities. The development includes most of the 46-year-old, 573,900-square-foot-building, excluding the JCPenney parcel.
Originally, a 28-year PILOT was proposed by Spark JC LLC, a group led by Doug Matthews, but the Agency approved a 25-year agreement.
“What we found is that 25-year term, a lot of the proposals they’re putting out there and discussions they’re having with potential tenants, lease terms can run 20 to maybe as much as 25 years if you add options,” Agency Executive Director Stacey Duncan said. “We just felt that over time it made more sense. The project will just go to full tax a few years earlier than initially proposed.”
The total project cost according to documents on the Agency’s website is $116,974,252 and Duncan said the change in the PILOT will not affect the total cost.
However, the total tax exemptions were reduced from about $12.2 million to $9.4 million over the 25 years.
In 2019, the mall was responsible for $3 million in annual property taxes due to the Johnson City School District, the Village of Johnson City, the Town of Union and Broome County.
Under the ownership of Spark, with the tax exemptions, residential and commercial property taxpayers will likely have to pick up any differences for the municipalities and school districts.
Under the agreement, Spark LLC will pay $489,000 in taxes for the first five years and it would increase to more than a million dollars in the final three years, including about $1.1 million in the final year.
The project will include a 10-year provision agreed to by Doug Matthews and Spark LLC in case of a desire to sell during that time. Matthews said previously the project could take up to five years to begin.
Spark previously purchased the former Sears building on the north end of the mall and it includes Factory by Beer Tree Brew and Broome County offices, and the Lourdes Wellness Center is slated to open next year.
Spark is in the process of purchasing the mall from Rialto Capital Management, a Miami firm that oversees real estate asset investment. Rialto has held the mall’s mortgage since 2019, which it fell into foreclosure.
Published by PressConnects
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