The Town of Amherst has agreed to lower the assessment on the Boulevard Mall by 35%.
The drop in value, from $46.4 million to $30 million, comes nearly two months after a group of investors purchased the mall property for $24.05 million.
The buyers, who are expected to close on their purchase of the shopping center in June, had requested a deeper reduction in value to match the price the group agreed to pay for the mall at auction. Amherst officials said they recognized the mall's value has fallen but they believe revenue from tenants and other data show the mall's fundamentals remain strong.
"It's a reflection of the current financial status of the property," Town Assessor David Marrano said Wednesday.
The town acted in response to an assessment challenge filed by the group that won the bidding for the mall at Niagara Falls Boulevard and Maple Road in an online auction in early April.
Buffalo-based developer Nick Sinatra, One Seneca Tower owner Douglas Jemal and RMS Investment Corp. in Cleveland are planning to transform the 64-acre Boulevard Mall into a town center that mixes retail, office and residential development.
Marrano said the drop from $46.4 million to $24 million requested by the group was too steep and the town didn't consider the $24 million auction sale price in its review of the property's value.
Instead, the town analyzed rental income and other information submitted by the group in reaching the $30 million assessed value, which represents a full-market value of $31.7 million.
The Town Assessor's Office and representatives of the investors' group negotiated a new assessed value that was agreed to by Marrano, the prospective buyers and LNR Partners, the special servicer that owns the mall now.
The town's Board of Assessment Review signed off on the agreement on Tuesday, Marrano said. The new value takes effect on July 1 and is in place for one year.
It covers the four parcels that make up the bulk of the mall property, including the main Macy's store, former Sears store and Dick's Sporting Goods.
It doesn't include the Firestone Complete Auto Care, former Macy's Men's Store or J.C. Penney, nor the Wegmans property on the other side of Alberta Drive.
Sinatra declined comment.
In related news, Benderson Development Co., which has extensive holdings on this stretch of Niagara Falls Boulevard in Amherst, has assumed the ground lease on the Sears that closed in 2017.
Benderson already owns the former Macy's Men's Store and a former Buffalo Athletic Club location on the site. A Benderson official previously said the company participated in the auction for the mall proper until the bidding went too high for the company's taste.
The lease assumption was dated May 22 and filed with the assessor's office. Benderson filed a challenge of the assessment on the former Sears, as did Macy's on the store it continues to operate and lease within the mall.
The reduction the town approved for the main mall parcels will apply to those stores, Marrano said.
Eric L. Recoon, a Benderson vice president, said late Wednesday that the company has worked for quite a while to conclude the Sears transaction. He said the process took longer than expected because of Sears' bankruptcy filing.
"No immediate plans that we’re ready to disclose, but I’ve had productive conversations with [Supervisor Brian] Kulpa about our long-term vision for the site – as well as the larger Niagara Falls Boulevard corridor heading north to the I-290," Recoon said in an email. "This recent acquisition is a reflection of our bullish mindset regarding that entire corridor. Have also had positive dialogue with our new neighbors-to-be."