TOWN OF ULSTER–John Mulherin of Hull Property Group remains optimistic, even with another mammoth space to fill.
The vice president of government relations at the Georgia-based real-estate company, which bought the troubled Hudson Valley Mall last year, said the upcoming Sears closing is not deterring efforts to revitalize the town of Ulster shopping center.
“This failure is not endemic to Kingston but reflects the new realities of retail,” he said. “We recognize these new realities of retail, and we anticipate to continue working closely with community leadership and other stakeholders to build consensus and an action plan for the future of the Hudson Valley Mall.”
Mulherin said the 110,862-square-foot space occupied by Sears will be “repurposed or demolished in a manner conducive to a first-class retail corridor.”
“The current retail environment is extremely challenging, but we are working hard with Ulster County leadership so that the Hudson Valley Mall doesn’t devolve into a second-class retail offering,” he said.
“Community leadership, other commercial stakeholders and mall ownership must share a new vision of the future of the Route 9W retail corridor or the marketplace will dictate an unfortunate and unforgiving future.
“(The) Route 9W retail corridor has so much potential and by working together, we can use this setback as an opportunity for growth and continued success.”
The news that Sears, a 29-year tenant, will close has once again fueled speculation and renewed curiosity about Hull’s plans for the mall, which has less than 50 remaining tenants.
In the last few years, anchors like JC Penney and Macy’s have bolted their doors and smaller shops like NY Dollar closed just after Christmas.
Even more localized businesses such as the Woodstock Music Shop are on their way out. The two-year tenant is calling it quits on Jan. 15.
“This was just a temporary location for us,” said owner Jeff Harrigfeld, who opened at the mall in March 2016. “It was not intended to last forever.”
Harrigfeld plans to go back to a one-store model with his shop at 6 Rock City Road in Woodstock.
He said the mall store allowed him to grow and offer lessons, concerts and small rentals, but it did not turn out as he had hoped
“This was a big undertaking for us, and we’ve given it a shot. It’s not really going to pan out here.”
Though steel gates are pulled over many interior storefronts, a walk-through at the mall reveals some improvements like new ceilings, lighting fixtures and carpeting.
Colorful murals depicting area historic sites cover empty storefronts, a new aesthetic that longtime tenants like Concetta Iovieno are noticing.
“We’re not hearing much, but we are seeing things happening, like the carpeting, the lighting, the murals. You definitely get a better positive vibe from what it used to be under the old ownership,” said Iovieno, the owner and manager at C and C Unisex Hair Design.
“We’re just hoping that things will change. Customers, over the holiday season, have been coming in the mall and noticing the positive things, and we’ve actually seen a lot more clients in the mall for the holiday season compared to the past, so it gives us continued hope.”
Mulherin said the recent cosmetic improvements are part of Hull’s plan to “reimagine” the property.
“For us, we buy these properties and specialize in struggling and failing mall assets in smaller-sized communities. It’s what we do and how we can add value back to properties,” he said.
Mulherin noted that Hull does that with a “pragmatic” and “sequential” approach.
“You first stabilize and then you transform and then you reposition the property,” he said.
Hull bought the 65-acre property last January for $8.1 million, though it had been assessed in 2015 at $66 million.
The company last year reached a deal with the town of Ulster and Kingston school district to lower the assessment on the mall property and be refunded $1.4 million it had made in overpayments.
Mulherin called that the “stabilization” effort, which has now been resolved.
“Next, you’ve got to transform the property. We know we have vacancies, but we have to change that negative to a positive,” he said.
When it’s all said and done, Hull anticipates spending more than $1 million for cosmetic improvements that include covering the vacant storefronts with sheetrock and historic murals and redoing the ceilings and lighting.
“With that, you’re really trying to create some positive momentum,” he said.
“These properties we purchase have had this downward spiral, so you’ve got to stop the bleed and change the momentum. The aesthetic improvements we make are very expensive and sacrificial because they don’t come with any income stream. The tenants aren’t going to pay us any more money because we made it look better.
“No tenant that we would stake our sustainable success on would come to that property until it looks and feels better.”
The next step, Mulherin said, is to attract tenants for what he said the company envisions as a “fashion mall” with some mixed-use possibilities.
The company is in negotiations with Health Quest to occupy the former Macy’s space for future medical use, according to Mulherin.
Another step would be to improve Regal Cinemas to give moviegoers a “first-class theater” experience, he said.
Mulherin also noted that options like a grocery store or entertainment complex–forces that are market-driven– could be part of the mall’s future.
“We’re not opposed to any of that, but first and foremost, we want a fashion place where folks can go get their fashion in a first-class environment, and we’re talking to several folks in that regard because, certainly, we’ve got the space.”
Town leaders, meanwhile, are patiently watching and waiting.
“I would like to see Hull take their time and get it right,” said Ulster Town Supervisor James Quigley.
“Redevelopment is a tricky process, and a developer could get seduced into jumping at what they think might be the first great tenant. They throw a lot of money into that first tenant and then it doesn’t work and now, they’re further and deeper in the hole than when they first started out.
“At this point in time, they’ve only owned it for a year. I’m not upset that they haven’t come to me with 15 different ideas. I don’t expect them to walk in here and say, ‘We’ve had a discussion with X, Y and Z’ because that’s not productive for either of us. If they walk in the door and say ‘I’ve got a lease with X Y and Z, and I need site plan approvals or building permits,’ that’s an entirely different conversation,” he said.
“They’re trying to evaluate all options, and it takes time for things to rise to the top. This mall has had a storied history, and a lot of people have left that location, including the three anchors, so when you’re trying to sell that parcel to another retailer, you’ve got a doubly hard battle to win because of all the dead retailers on the floor.”
Mulherin said Hull is in it for the long run and is now “doubling down.”
“We’re here to work, and we’re going to make this thing successful again,” he said. “Is it going to dominate like it once did? No. But can it be relevant and can it compete? Absolutely.
“Of course, everybody wants it done yesterday, but these are complicated properties. We would like to say, ‘Hey, now that we’ve renovated the property and created all this momentum, we have folks lined up at the door.’ We don’t control that. That is controlled by the marketplace.
“We’re now a very viable retail offering, and when opportunity knocks, 95 percent of the time, we’re going to get the deal done. We can’t make somebody come. It’s like going to the prom. You’ve got to have a date that wants to go with you. We’re working on that. We have a lot of national contacts,” he said.
“We have 30 of these mall properties across the country, and we’re reaching out to those tenants that we have these national relationships with. Until now, we didn’t have a lot to offer, and now that we do, the hard work starts.”