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February 13, 2017 - 10:14pm

Settlement agreement places downtown mall maintenance, operations into City of Batavia's hands

posted by Mike Pettinella in news, city of batavia, City Centre Mall Association.

An agreement between the City of Batavia and the City Centre Mall Merchants Association -- outlined by an 11-point "settlement framework" that calls for the city to retain ownership of the downtown facility's concourse, pay 100 percent of capital improvements and take care of mall maintenance and operations -- will provide the impetus for private investment in one of the city's priority areas, said City Manager Jason Molino at Monday night's City Council meeting.

"The mall is a major part of our downtown, we can't ignore that," Molino said. "This is an opportunity to facilitate and lead cooperative and successful partnerships ... and lead new development and investment in our downtown."

"For long-term investment in the mall and the 17-acre area around it, this is the best-case scenario," Molino said. "We're looking at a project with at least a $5 million value."

The settlement comes after a decade of lawsuits by both sides over responsibility for the City Centre Mall. Per its terms, all previous agreements -- which have been clouded by four rounds of litigation since the late 1970s -- will be terminated and become null and void.

Additionally, the city will:

-- Retain ownership of the concourse;
-- Complete roof, silos and skylight capital improvements (estimated at $650,000) no later than March 31, 2020;
-- Pay 100 percent of capital improvements, with future capital improvements paid by all property owners with revenue from a user fee (which would replace the current mall maintenance fee);
-- Perform mall maintenance and operations (coordinated by the Department of Public Works and Batavia Development Corp., respectively, with the latter focusing on marketing and redevelopment strategies);
-- Establish a user fee by local law based on square footage for property maintenance fee;
-- Continue to maintain budgeting and accounting;
-- Charge single-parcel owners who own more than 11,500 square feet the set user fee at 11,500 square feet;
-- Set the user fee at $2 per square foot for years one, two and three; $2.04 per square foot for year four, and $2.06 per square foot for year five. After year five, the fee will be based on the projected budget.
-- Eliminate all parking restrictions in city parking lots, with the city to restripe in 2017;
-- Turn over the fund balance as of March 31 to the Merchants, with the Merchants returning any fund balance to the city on April 1, 2022.

Molino, who along with City Attorney George Van Nest presented the plan to Council, said terms of execution of the settlement will be presented to City Council and the full membership of the Mall Merchants Association for approval later this month (at the next Council meeting on Feb. 27).

The settlement agreement must be ratified and executed by City Council, the Mall Merchants Association, parcel owners and JCPenney, and in the event that any parcel owner or JCPenney refuses to sign the agreement with 10 days of approval, both parties shall support an application to the court by motion or Order to Show Cause to gain approval of the settlement or have the agreement ordered.

"All must sign off on past agreements and sign the new agreement," Molino said. "Until then, these cases (pending litigation) are still open."

Molino said both parties have been meeting over the past 18 months, with a mediator playing a significant role in forging this settlement agreement and putting an end to suits and countersuits, claims and counter-claims over which party is responsible for maintaining the mall concourse and capital improvements, including the perennially leaky roof.

During negotiations, three other solutions were considered, Molino said. They were (1) having a private developer buy the mall; (2) having the Mall Merchants Association buy the mall concourse at fair market value, and (3) having the city lease the concourse to the merchants for fair market value.

All three were "taken off the table" as restrictions in the current agreements would render those options as not feasible from a financial standpoint, Molino said.

Pier Cipollone, president of the Batavia Development Corp. Board of Directors, said the settlement "opens up future discussions" by removing the prior agreement and its restrictions -- and "paves the way to bring developers in and gain ideas as to what they would want to do with the mall."

He said he would like to see retail, such as boutique stores, T-shirt shops ... anything where somebody could come in and buy something and walk out the door. What we have now is a mix of retail and medical, and the mall was never designed for the medical world. We need foot traffic downtown."

tom hunt
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Great....the home owners and taxpayers of Batavia get to foot the bill for a new roof. Let us see what this does to the tax rate. They should have put this white elephant down years ago.

John Roach
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Well, you and many others said the City has to do something. They did. And your idea would require the City to take away private property by Eminent Domain and have to pay probably hundreds of thousand dollars, and be tied up in court even longer than we are now, when the owners refuse to go along with their property just being sized by the government.

Rich Richmond
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Yes, the Mall is a white, pink, polka-dot elephant; choose your colour or pattern. The longer we are in court the more the Mall deteriorates for lack of necessary repairs.
We could lose in court, have to pay court cost and pay much more, and taxes go up even more.

I attended the meeting. The presentation explaining the history of prior Mall agreements going back the mall’s inception was quite informative. If both parties; the Mall Merchants and City agree to this good faith agreement, all previous outdated agreements from the 1970’s are dissolved, including the current lawsuit brought against the City by the Mall merchants, and pending counter summary judgments filed by the City. It appears to be a reasonable solution for a problem. City Council, the City Manager and the City Attorney have hopefully brought court litigation to a close.

Jason Crater
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Eliminate all parking restrictions in city lots?

Does this mean overnight parking will be allowed?

John Roach
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Jason, no. That was related to parking in the mall lot. Parking needs to be changed to allow a faster turn over for businesses and allow some to be closer to the building.

Mike Pettinella
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From Jason Molino this morning. "The agreements that currently exist require a specific number of parking spaces, 1,140. This is something that is being disputed in the litigation. The settlement agreement would eliminate this requirement. Overnight parking policy would not change."

Jason Crater
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Bummer

Mary E DelPlato
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I worked in the mall in 1992 and I remember the buckets then...prayed no ceiling tile would fall on any one sitting in the concourse....now that the city will take it..seems like a great area for the police department....and perhaps rent to the county for space....we do pay county taxes already....I miss the downtown we once had....how sad that Batavia is sooo boring and quiet the only time its busy is during rush hour traffic....town of Batavia has it rignt...bringing business in....id like to see a big lots...a wegmans...but that's a dead horse right there....no one wants to do business with Batavia...why?

John Roach
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Mary, read the article real carefully The City will not own the Mall. Each property will still be privately owned.

Dave Olsen
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So Batavia continues to grow its government. This will be an ongoing issue based on the same premise used to build the stupid thing in the first place. If we build it, they will come. LOL. Fortunately for me, I don't pay taxes to the city of Batavia, but if I did, I'd want to know how many new employees is the public works dept. going to hire to take over this additional property management? What other projects or issues will get ignored? Is there a cap on how much is going to get spent? How come the merchants can sign off on prior agreements to enter into this one, but couldn't for the other options? Who says the city has to sell the concourse at "fair market value" which can't be a whole lot at this point, just sell to the merchant's assoc. for a dollar or whatever, if they really can just sign off on old agreements? If this truly is the only financially feasible option, then how about a provision that the city will repair and maintain the concourse to the point that it's value is determined to be whatever covers the city's investment, then sell it to the association or a private entity? Now That would be reasonable. What happens when they are not able to attract new tenants? (which is the real root of the problem) Are they going to offer discounts to retailers to move in there? Won't that cause some further discontent with the current tenants? Good reasons why a government should not be a landlord or property manager. I realize there are probably no answers, and it's not my problem. Just an inquiring mind.

John Roach
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Dave, New York State law says you have to sell at fair market value. Then it goes on the tax rolls for all the property owners to pay

What is your suggestion for resolving this whole mall issue, once and for all? And where will the money come from?
.

Rich Richmond
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Dave Olsen, until the LAW SUITS and OLD AGREEMENTS are set aside; until the REPAIRS ARE MADE, nobody with any business sense is going to be flocking to the Mall with the exception of seagulls to do their seagull business.

This is the first reasonable good faith agreement after years and years of loggerhead and acrimony.

For the sake of argument, the reasonable proposed good faith agreement that apparently you don’t like is not reached. Theoretically, Mr Olsen, you’re now in charge and have absolute free rein to solve the problem of the Mall. Theoretically, you have all the facts, figures and paperwork afforded to the Mall Merchants, City Council and the City Attorney. How would you solve the problem within the confines of New York State Law?

Dave Olsen
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Don't wag your all capital letters at me ! :)
I certainly wouldn't leave the whole thing open-ended with no end in sight. There's no closure to this. I would find a way to end the city's ownership of the concourse. If you have to spend some money on repairs due to the years of neglect, then whatever, but I would have a cap on the amount of money (need a proper estimate first) and there would be a terminal date of ownership.
The solution to problems caused by government intervention is never more government intervention. and that's exactly what is being proposed.

Dave Olsen
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John; OK, fair enough if that's the law. Where is the money coming from for this proposal?

John Roach
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Dave, clearly you have not seen any of the legal tie-ups here. What makes you think the merchants will take ownership of the councourse? If they do, the law requires them to pay taxes on it.

Why would anyone spend money to fix anything without a legal, binding, plan to maintain it in the future. That would be a bad idea.

And the "terminal date" of ownership will be in court, like future maintenance responsibility, on top of the ongoing cases, and we'll get nothing done.

Dave Olsen
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John; what makes you think if the city repairs and maintains the concourse and makes it all nice again, that that will draw more retailers in? Taxes will go up in Batavia to pay for this, mark my words. $650 grand will not be enough. The DPW will want to hire more people. It will still be half empty. This plan has all the makings of a worse albatross than it is right now, except without the risk of the roof falling in on someone. The city needs to get out from under this, however it has to happen.

Howard B. Owens
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I don't see how it would be financially feasible for the mall merchants to take over the concourse. It's not like any of them are rich and can afford to squander buckets of money on essentially a charity case. Even if they had the money, it's not like the ROI is there to justify the investment.

Even if they got it for $1, which as pointed out, isn't legal, there is still insurance, maintenance, repairs.

And doing nothing is a horrible option for the city residents since the mall is right in the middle of the main business district and until this is resolved, there is no moving forward with any option to make things better down the road. I don't know what those options are, but none are possible with these issues unresolved.

Using hindsight bias to judge a deal none of us were involved in, it's easy to cast aspersions and boldly proclaim the mall a bad deal for everybody involved. But that thinking is what economists call a sunk cost fallacy. What's done is done. The time, effort and money that brought us all to this point are all in the past and the only logical course is to do the most sensible thing to move forward.

John Roach
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The only way to get from under this is Eminent Domain. By now you should know that will cost a lot more than the proposed plan, and the City could be tied up in court over it for years to come. And the current cases would still go forward also, maybe for years. And, the City might not win in court on Eminent Domain, so what then after all that lost time?. So, you really have no real workable plan except , no plan to end the number of current court cases. But you do not like the one plan that has a chance of working.

Rich Richmond
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Be more specific, Mr. Olsen; exactly how will you end the City's ownership of the concourse? Will you hire another law firm? How much will it cost, etcetera? How will the roof be repaired and who will pay for it. I'm not intimidated or offended by capitalization to annunciate a point, so feel free to "wave your capital letter at me" with your response on how you will end the City’s ownership of the concourse.

Dave Olsen
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Rich, how would I have the answers to that when the city council, manager and the expensive legal counsel can't even come up with those? My point is that there is no provision to get the city out of this, not even an effort. The proposal is open-ended and will continue on and on. Besides why should I attempt to figure this out? That's their job, it's what your taxes pay them for and the citizens of Batavia should hold them to getting it right.

Dave Olsen
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Yep, Howard this is most surely a sunk cost. I can concede that the city will have to spend some money to make repairs, but leaving it open in expense and time is just ensuring that more money gets sunk and stays sunk.

Dave Olsen
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John, no Eminent Domain. This would never be a proper use of that.

Dave Olsen
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Howard: "Using hindsight bias to judge a deal none of us were involved in, it's easy to cast aspersions and boldly proclaim the mall a bad deal for everybody involved"

Those who cannot remember the past are condemned to repeat it. - George Santayana

John Roach
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Dave, that is the only way to get the City out of this. And without Eminent Domain, we can continue the present course and stay in court for how many more years, or end all the court cases, have a new agreement between the City and the MOA, and move on. Nothing you suggest will be done for years to come, if ever. This plan could have this all done in 3 years (2020)

Rich Richmond
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Dave,
They've made every effort to get us out of this. If you had attended the City Council Meeting you'd be aware of this.
The options were explained, including the downsides to each.
In order to have a provision; both sides have to agree to the said provision and the Merchants don’t want the concourse.

A municipality/city owning a Mall is an enigma, let alone a terrible business model. I've seen no evidence or legal precedent or ruling to the contrary. If it continues in the courts; and after all the appeals are exhausted, a precedent will be set as a matter of case law; with or without a provision, but at what cost?

Until now, neither side has agreed on anything. There is a chance that after the repairs are made an outside developer may purchase the Mall.

John Roach
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Good point Rich. What was in the paper could not show all the other information on this that was given. Only 6 citizens attended the meeting to hear it all.

Bob Price
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You can't polish a turd(the Mall)....wait a minute-I think Mythbusters proved that a turd could be polished. Why can't someone purchase this oversized turd of Batavia and turn it into affordable living space for people?Wall off the businesses along Main St.-it's only a matter of time before Penney's closes,then knock it down. Years and years of neglect to the roof -I can't wait to see how much mold is found in the ceilings of the place,and wherever else the water leaked. What a disgrace to the city........

Brian Graz
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Why not do a consolidation with the City, County, Towns, and Villages and renovate and convert the Mall into a new BPD, County Jail, and Community Court facility? The City is planning on spending $14+Million for the PD and the County is planning on spending $40+Million on a Jail [which is ludicrous!]. Plus the justice system spends tons of $$ on carting inmates all over the countywide for court proceedings. With this plan the close proximity between Jail and City and County Courts would greatly reduce the cost of transporting inmates to and from hearings and trials. And the further consolidation that would be prudent is to incorporate a "community court room" within the renovated Mall that would be used for hearings and trials for the outlying jurisdictions [towns & villages] of incarcerated persons. Rather than continuing the extremely costly process of transporting inmates back and forth from the jail to the various jurisdiction's courts, the various judges would come to a community courtroom on a rotation basis to handle their court proceedings of jailed individuals. With this arrangement all the inmates and the courts would literally be "within walking distance".

Let's be a trend setter, let's make use of the Mall property that would be a sure thing rather than chasing risky propositions. Plus... Problem of what to do with the Concourse solved!

John Roach
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Bob, twice before offers were made to purchase the place. But, not everyone wants to sell or sell at the price offered. Both deals went no place. And nobody has made a third offer. That simple

John Roach
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Brian, good idea. I suggest that you get the ball rolling and you go to your local Town Board at it's next meeting and ask them to pass a resolution in support of it, and send it to the County. They can also send a copy to the other jurisdictions. This might start it.

Ed Hartgrove
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While fully realizing it's only February (so, it could possibly change), my vote for Comment of the Year goes to Dave Olsen's, "Don't wag your all capital letters at me!"

In the words of my two favorite ad characters, "Brilliant!"

Ed Hartgrove
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Who knows?

A thousand years from now, perhaps archaeologists will be amazed, and perplexed, by the discovery of Batavia's City Centre Mall. Why, it might rival the ancient ruins of Rome.

Can you hear their conversations?

"What do you suppose it was used for?"

"Well, it appears to be a place where merchants might have plied their wares."

"OK. But, if that were so, why isn't there any apparent signs of foot travel? And, furthermore, what was the purpose of the roofing system? Do you think they had created some sort of an interior waterfall attraction? And, if that were the case, where is the drainage system for it? Very strange, indeed!"

Dave Olsen
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LOL, thank you Ed. I'm sure someone will top that for you.

Dave Olsen
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Rich; You agree that government involvement in the mall concourse ownership is a bad idea. I think just about anybody in Genesee County would agree. My question then is, why would you want the taxpayers to take this on for infinity? If it's too much of a financial burden for the merchants or a private concern, then why put it on the backs of the citizens? I'm saying fix it if you must, then get out of it as quickly as possible. Just my two cents and I do appreciate your and John's insights and opinions, even though I disagree, I don't pretend to have the answer, but In my opinion, this is a bad move.

John Roach
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I think Ed has hit on an idea. Make the concourse a Water Park.

Rich Richmond
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Dave,

I made several posts previous to this one. They are Post #3, Post #12, Post #19 and Post #25.

Your question to me is, “Why would you want the taxpayers to take this on for infinity?” My answer-(I never stated or implied that I did).

I said in Post #3-(It appears to be a reasonable solution for a problem. City Council, the City Manager and the City Attorney have hopefully brought court litigation to a close). There was no mention of infinity; stated or implied.

I said in Post #12-(This is the first reasonable good faith agreement after years and years of loggerhead and acrimony). There was no mention of infinity; stated or implied.

In Post #19-There was no mention of infinity, stated or implied.

I said in Post #25- (If it continues in the courts; and after all the appeals are exhausted, a precedent will be set as a matter of case law; with or without a provision, but at what cost? Until now, neither side has agreed on anything. There is a chance that after the repairs are made an outside developer may purchase the Mall). Again, there is no mention of infinity, stated or implied.

You said in part- “Just my two cents and I do appreciate your and John's insights and opinions, even though I disagree, I don't pretend to have the answer, but in my opinion, this is a bad move.”

Fair enough Dave and back at you, although I see it as the first step for getting the City out of the Mall entirely. On this subject, we’ll agree to disagree to infinity and beyond.

Howard B. Owens
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Dave, I have no idea why you think anybody would buy just the concourse. Who would be the buyer? Why would they want it? What would they do with it? How would they make money from it?

John Roach
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Howard, that's the point. He has no real plan. Saying just "sell the concourse", when there has never been anyone who wants it, is not a plan. And you're right, how would they make enough money on it, overlooking that if anyone buys it, they then have to pay School, County and City property taxes on it.

For years, people have said just do something with the mall. Now, there is a real plan on the table, and many of the same people now say it should not be accepted. They have no plan to end the current court cases and no plan to address future issues. And while some say the City should just take private property, they then say they do not support Eminent Domain. They also have no clue how long we would be in court over that, while still having the current cases going on, costing us even more money.

Sounds like bitching just to bitch

Dave Olsen
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OK,, this my last comment because Rich is right this will just go back and forth forever with no end in sight.
John, not just bitching to bitch, this is a wrong headed plan that will be a money pit for the taxpayers with no end in sight. I call that an injustice and I will speak out if I want whether you like it or not.
Rich, I didn't say you said it would go to infinity, I said that because there is no end built into this plan.
Howard; the city is leasing the concourse space to the tenants, that's what an owner would do. The best scenario is for the merchants to take ownership.
You guys love this and you're going to pay for it. Not me.
Done. Peace. Out

Howard B. Owens
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Dave, according to the story, the city IS NOT leasing the concourse to the merchants.

So, Dave, with nobody to buy it and nobody to lease it and the city already owns it -- now what? Just let it continue to rot?

Dave Olsen
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Fine, User fee.

Howard B. Owens
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That's part of the settlement, as the article states:

-- Establish a user fee by local law based on square footage for property maintenance fee;

John Roach
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Dave, a "user fee"? Your idea is to charge people for walking on it?
And a user fee still has the City owning it.

Mary E DelPlato
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not just the roof either..the entrance ways are deplorable...maybe the city church will buy it for a penny

John Roach
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Mary, this agreement includes the entrance ways

Jim Urtel Jr
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The city should be ashamed of themselves for allowing the mall to get in such poor and hazardous shape to begin with! If a taxpayer has something wrong with their house, they have to fix it. How it is allowed to stay open like it is is beyond ridiculous! They have a better shot at someone buying it, tearing it down and building something new! Does anyone on this thread actually spend any time in the mall? Buckets and falling tiles, embarrassing!

John Roach
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Jim, it's in the shape it is because the private property owners did not take care of it. They own the roof. And, sadly, while all this is still in court, nothing gets done.

Twice there were offers to buy the mall, but, again, not everyone wanted to sell or sell at the offered price.

Jim Urtel Jr
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Well they should be forced to either fix it or sell it or be fined like any other property owner in the city would have to. It`s a hazard! Why are they getting away with it?

John Roach
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Jim, why do you think this is currently in court? And like any other property owner, if you take the issue to court, you wait for the court to make a decision. The proposed plan is the result of arbitration to end the court case and avoid another one.

Brian Graz
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The GCEDC should buy the concourse and then give it a tax abatement, and then it will no longer be a point of contention... rather it can become another failed venture for the experts at GCEDC.

Post #28 still makes the best sense to me.

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