WEST NYACK — A temporary receiver has been named to oversee Palisades Center, court documents show, as the mall's owner continues to fight its creditors' foreclosure bid on the massive retail property.
The move is considered a natural progression in the foreclosure case. The mall was already operating with oversight, town officials confirmed.
State Supreme Court Judge Francis A. Kahn III appointed Chris Neilson, managing partner of Trigild IVL, LLC, as temporary receiver in a ruling filed in Manhattan on Aug. 12.
The temporary receiver is empowered to collect and set rents for stores and other vendors, and to enter into new lease agreements with tenants. The receiver cannot make any repairs or improvements worth more than $5,000 unless the mall's owners agree. Emergency repairs are exempted.
The receiver would use money collected from tenants to pay the mall's bills.
An email request for comment to Neilson was not immediately returned.
An email request for comment from Palisades Center was not immediately returned.
Meanwhile, the plaintiff, Wilmington Trust, continues to seek a full foreclosure — that is, the sale of the mall, right down to the fixtures, with the lenders getting the proceeds to pay off the overdue mortgage, interest and court costs.
Keeping watch, maintaining site
There had been a special servicer overseeing the mall for a while, Clarkstown Supervisor George Hoehmann said, as the foreclosure case progressed.
In many ways, the oversight won't change much, he said.
Like the special servicer, the receivership protects the town, Hoehmann said, because the receiver would keep up the property. The town had already seen property improvements under the watch of the special servicer, he said.
Meanwhile, the mall was due $27.5 million in reimbursed property taxes after its owners last month reached a settlement with the town over its years-long tax assessment challenge .
How the mall ended up in foreclosure
The 2.2 million-square-foot shopping and entertainment complex, less than an hour's drive from New York City, was once among the most popular shopping destinations in the U.S. It is still among the largest.
The mall in 2016 took out a $418 million mortgage loan; its creditors went to court in Manhattan in 2023 after mall owner EklecCo failed to pay it back, even after extensions were granted.
Mall faces foreclosure: Creditors come after Palisades Center in court. What's at stake
Wilmington Trust, representing the mall's creditors, filed a commercial mortgage foreclosure complaint on Feb. 10, 2023, in state Supreme Court in the County of New York.
Various promissory notes issued in April 2016 to JPMorgan and Barclays banks added up to the amount now sought by Wilmington Trust. The mortgages were made against the mall property itself. According to the court filing, the mortgaged property is a "mixed use development consisting of a consumer shopping center, parking, offices, and other uses commonly known as Palisades Center located in Clarkstown, New York."
In 2020, citing strains from the COVID pandemic, the mall and Wilmington Trust reached a deal that extended the maturity date of the loan to Oct. 9, 2022.
The mall, according to its creditor, didn't pay.
"Borrower failed to repay the Outstanding Amounts on the Maturity Date, and such failure is continuing," the court filing states.
The creditor and mall's owner reached a "forbearance agreement" that gave the mall until Nov. 8, 2022, to come up with the money.
They didn't.
The mortgage lenders have demanded action against EklecCo NewCo LLC and the other Pyramid Cos. affiliates that own the mall, including Queens Comic’s NewCo LLC, Riesling Associates, and Three J’s Family Trust,
How does Clarkstown property tax settlement fit in?
The town and the mall's owners in July reached a settlement on a years-long tax assessment challenge wending its way through state Supreme Court in Rockland County. The deal lowered the mall's tax bills and put the town, Clarkstown school district and county on the hook for $27.5 million in reimbursement payments.
The ongoing foreclosure case and the tax challenge were unrelated, but they are still linked.
Part of EklecCo's defense in the foreclosure case has been the mall's plummeted value, including from the damage the COVID pandemic wrought on all retailers.
Mall settlements: Clarkstown reaches tax deals with millions paid back to Palisades Center, Shops at Nanuet
The property tax assessment reached in July put the assessed value at $300 million. That assessment will remain for at least three years, according to the settlement.
Palisades Center had put its own market value at $160 million, but the town's most recent value for the mall was set at $392 million. So the tax settlement locked in a property value that's still considerably higher than what the mall's owners had contended, Hoehmann said.
The relationship between the mall and the community has long been rocky. Even before the mall opened in 1998, the company challenged its tax assessment. Clarkstown Town Board meetings grew raucous as neighbors pushed back against permissions sought by the builder.
This article originally appeared on Rockland/Westchester Journal News: Judge appoints temporary receiver for Palisades Center as foreclosure case continues
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