For 10 years, the developer of Palisades Center, Pyramid Management Group of Syracuse, made considerable progress toward building the Rockland County mall.
By 1996, the company had acquired neglected industrial land along Interstate 87 in Clarkstown, rezoned the property, got site plan approvals, excavated the site, cleaned up two landfills and started work on the foundation. The developer had secured a $50 million construction loan and had spent millions of dollars.
There was just one formality left. The town had to abandon two “useless” roads that would become obsolete when the mall opened.
Clarkstown officials, according to a lawsuit filed in U.S. District Court by EklecCo NewCo LLC, Pyramid’s ownership entity at Palisades Center, used the road issue as a “bargaining chip” to block the developer from building an even bigger mall.
EklecCo demands that restrictions imposed by Clarkstown be declared unconstitutional and unenforceable. It is asking for $50 million in damages.
Town Attorney Lino Sciarretta objected strenuously to how the lawsuit characterizes the town’s actions.
“The procedures that they complain about are the very procedures they in fact agreed to do 20 years ago,” he said. “So, for the mall to say now that it was unconstitutional, we take exception.”
Progress stalled in 1996 when Pyramid tried to amend its site plan to increase Palisades Center from 1.9 million square feet to 3.05 million square feet. The planning board held public hearings and opponents objected to the expansion.
Then the town board set conditions for abandoning the roads. Pyramid would have to buy the roads, withdraw its expansion plans, agree not to sue the town and agree to seek town board approval for any future expansions, subject to a referendum by town voters.
The developer capitulated.
“EklecCo faced devastating financial and reputational consequences” if it couldn’t open on schedule, the lawsuit says. The company “had no choice other than to acquiesce to the conditions.”
EklecCo got its building permit. It paid $1.5 million for the 3.5 acres that composed the roads. In 1998, Palisades Center opened.
The town had allowed the developer to modify its plans. EklecCo built a 250,000-square-foot shell to even out the roof line where the design had transitioned from two floors to four. The unoccupied shell spaces, near Lord & Taylor and an ice rink, have no utilities or finishes.
In 2002, the company asked the town board to lift the restrictions so that it could expand and use the empty spaces. The board agreed, subject to a voter referendum.
Town officials acknowledged during a public meeting that the developer “was being treated differently and unequally when compared to other commercial property owners,” the company claims in the lawsuit.
Voters rejected the proposal. Palisades Center’s owner could not expand.
“A fundamental right of property ownership in New York is the right to lawfully use one’s property,” the lawsuit says, “subject to validly enacted zoning regulations and restrictions.” EklecCo claims that Clarkstown officials had no legal basis for blocking expansion or requiring voters to approve the development.
The company has tried to work with town officials over the years to lift the restrictions, EklecCo attorney Craig Leslie said. “They have taken the position that there has to be a public vote. Our opinion is that they are not within their rights. We want to be treated the same way as any property owner in town.”
Leslie said the statute of limitations, the law that sets the time span after an alleged offense in which a lawsuit can be filed, does not apply because the harm is continuing. Every day the owners are prevented from exercising their rights.
Stephen Congel, vice president of EklecCo and CEO of Pyramid Management Group, the 45-year-old Syracuse company that manages 13 upstate New York shopping malls, including the Poughkeepsie Galleria, said Palisades Center must improve to compete more effectively with other retail centers.
“For the center to remain strong, we must continually upgrade and enhance the retail, restaurant and entertainment options for our customers,” Congel said.
Malls have changed since Palisades Center opened, Leslie said. “Now they are entertainment and dining destinations. You have to bring in new tenants and new concepts to entertain, feed and serve your retail customers.”
Sciarretta, the town attorney, said Palisades Center can still expand by following the agreed-upon procedures: Ask the town board for a resolution to lift the restrictions and put the issue on the ballot for voters to decide.
“There’s a long history here with respect to the characterizations they’ve made,” Sciarretta said. “We look forward to our day in court.”