By: Clifford Michel
New York City’s first outlet mall, a centerpiece of efforts to revitalize Staten Island’s North Shore, hasn’t been paying on an $8.5 million low-interest city debt for months, records indicate.
Empire Outlets, which boasts priceless views of Manhattan and Brooklyn, has missed payments on a loan from the New York City Economic Development Corporation (EDC), according to the corporation’s enforcement reports dated June 1 and August 1.
The “project has not been making payment on EDC Loan,” the reports say. The documents additionally note: “Project was not completed by Project Completion Deadline.”
Missing any one of three phased “completion dates” at the end of 2016, 2018 or 2022 may trigger financial penalties under a 2014 lease agreement between St. George Outlet Development LLC and the city Industrial Development Agency, which also granted Empire Outlets tax exemptions. The lease lists a base rent of $1.
Out of $8.5 million owed on a 30-year loan granted in 2016, St. George Outlet Development had paid $485,310.53 as Oct. 1, 2019.
Representatives for EDC didn’t respond to multiple inquiries from THE CITY prior to publication of this story. The parent company of the developer, BFC Partners, did not respond to requests for comment.
A Retail Disaster
After a three-month pandemic-driven shutdown this spring, Empire Outlets is officially open for business. But with tourism floundering and daily ferry rides down to under 23,000 a day, a 65% drop from a year ago, shoppers have been scarce.
Tim Savage, a retail specialist at NYU’s Schack Institute of Real Estate, said the widespread financial impact of COVID-19 is sending the industry reeling.
“This is typical during natural disasters, it’s just the size and scale of this natural disaster is so large,” he said. “I would not be surprised to hear of missed loan payments.”
The outlet mall first opened to the public in May 2019 — yet about half its storefronts remain empty. The developer has also blown past its own deadlines for the long-awaited food hall and beer garden on the mall’s closed-off fourth floor, where construction is ongoing.
An earlier blow to Empire Outlets came in 2018, when other developers suddenly abandoned plans to build the world’s largest Ferris wheel next door. The borough’s politicians and business groups say the setbacks are no reason to give up on the mall.
Linda Baran, president and CEO of the Staten Island Chamber of Commerce, said the city should consider giving further aid to Empire Outlets, given the mall’s outsized role in the borough’s economic development goals.
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