McKinley Mall in Hamburg is up for sale through online auction

Owner Mike Kohan and his Kohan Retail Group has put the Hamburg mall up for sale through an online auction that is scheduled to end on April 19, according to a listing for the auction. Bidding starts at $3 million.

The listing describes the mall, which has a 44% vacancy rate, as a “rare opportunity to acquire a super-regional mall with substantial value-add opportunity."

The auction, if it attracts an acceptable bid, would mark the end of Kohan’s sometimes controversial ownership of the mall, which has struggled to attract shoppers in the face of competition from an invigorated McKinley Plaza across the street and a busy Quaker Crossing retail complex about two miles away in Orchard Park.

Kohan acquired the mall, located on nearly 75 acres on McKinley Parkway, in the summer of 2021 for $8.5 million. Kohan initially floated ambitious plans to attract new local and national tenants to the mall, including restaurants and entertainment venues, as a way to bring shoppers back.

Part of Kohan's vision for the mall also called for seeking nontraditional tenants, in a bid to get spaces filled, vacancies down and traffic up. The mall has about 50 tenants, including J.C. Penney, Best Buy and Old Navy; as well as nontraditional mall uses such as a cat rescue site, a mixed martial arts studio and a music school.

More recently, a car wash. Splash Car Wash has proposed demolishing the TGI Friday's restaurant at the mall's entrance and building a 5,200-square-foot facility. An indoor skate park called Food Court Skatepark, said last month that it would open in the mall in April.

But the mall has continued to lose traditional retail tenants, including Claire’s boutique, once a mall staple, which moved to Quaker Crossing.

Kohan’s purchase of the mall was not without controversy. Kohan has a history of unpaid bills at its properties, resulting in utility shutoffs, and the mall's main phone line has been shut off at least once since Kohan took over.

Before the sale of the mall for $8.5 million to Kohan was finalized in August 2021, Benderson Development Co. claimed it had made a $10 million offer to acquire it, but had its bid ignored. A state justice ruled against the Benderson bid when the Town of Hamburg, with Benderson's support, contested the sale in court.

Benderson owns the former Macy's and its home store, a six-acre ring of property near the Dipson movie theater and the Hobby Lobby on one of the mall's outparcels.

As a result, it has the right to reject certain types of projects on the mall property, and Benderson refused to allow Kohan to lease space in the former Sears store for a self-storage facility and it denied efforts to bring a used car dealership to another of the mall’s outer parcels once occupied by a Pier 1 store.

The town in 2021 passed an incentive zoning law for the mall and its ring properties, allowing incoming tenants to have flexibility in usage in exchange for certain guarantees to the town, such as aesthetic improvements, creation of jobs or money to go toward town initiatives.