City Centre Mall Association

City officials are wondering what's up with the settlement they reached with attorneys for the City Centre Mall Merchants Association. They thought the matter would be resolved by now, but apparently, the attorneys for the merchants haven't even shown the membership the final draft of the settlement agreement.

While City Manager Jason Molino said he has no reason to believe the settlement won't eventually be presented to the merchants and the settlement will be approved, the delay just means the city can't work on structural deficiencies in the concourse.  

"I would like to think that there is nothing that suggests the deal is going to fall apart," Molino said. "The issue is how do we get to the finishing line and get to the finishing line as expeditiously as possible, which is in the best interest of everyone in the community, the best interest of the property owners in here in the mall, and then we can start to talk about what we can do to trigger new growth and new investment in this concourse and in this mall. That's the most important thing to keep our eye on."

Mall Manager Madeline Bialkowski, who scheduled her retirement for April 1 to coincide with the settlement of the mall merchant's lawsuit being in place, said that merchants are waiting for a final draft of the settlement agreement from the attorneys.

Hugh Carlin is the attorney representing the City Centre Mall Merchants Association. 

Yesterday, we asked Carlin when the merchants would approve the settlement.

"I can't say yet," Carlin said. "Hopefully in the near future. There are a few more details we're working on."

Asked what those details might be since his side had already agreed to a settlement, Carlin said, "I can't comment." Pushed for clarification, he repeated, "I can't comment."

According to documents obtained by The Batavian through a Freedom of Information Law request, the merchants have paid their attorneys $212,056 since starting the litigation against the city in 2009.

In February of 2015, The Batavian reported that the association had spent $103,317 on the lawsuit. The tab has gone up another $108,738 according to documents obtained through the FOIL request.

The city, through the same period, has spent $168,070 on attorney fees, with $63,872 being added since February 2015.

"The city has done everything it can prior to the lawsuit (to reach an agreement), during the lawsuit and now, having entered into terms we've agreed to to end the lawsuit in a way that is expedient and in the best interest of everyone," Molino said. "Now, we're still having challenges with the mall's legal counsel."

The lack of an agreement is delaying Bialkowski's retirement. She's agreed to stay on until the settlement is finalized, but she and her friends are still going ahead with a retirement party at Ken's Pits on March 30 because she anticipates she will be retired not long after that, she said.

The association and the city had a long-simmering dispute over who is responsible for repair and maintenance of the mall concourse. According to a 1987 settlement, the merchants' association was supposed to take control of the city-owned concourse on April 1, 2000.

The settlement agreement the city and the attorneys for merchants agreed to during the first week of February puts the burden back on the city to repair and maintain the concourse. That's a task Molino said the city is eager to take on because that's the only way all of the necessary repairs will take place so the mall becomes once again a viable business investment.

The City Council approved the settlement Feb. 27.  Each owner of properties in the mall must individually sign off on the agreement or submit a motion to the court to show cause for not agreeing to the settlement.

The city is ready to get started, he said, as soon as the merchants approve the agreement.

"The city is in position and we're ready to move," Molino said. "We're ready to take this 17-acre area and take on the responsibility to move it into a better position so that in the future it triggers investment."

There's a lot of work to be done but that doesn't apparently include mitigating mold.

Contrary to reports in other media outlets, there is no evidence of mold in the mall, Molino said.  

The speculation for mold in the mall apparently comes from an interview Ron Viele, a local contractor, gave to a reporter. We placed calls yesterday afternoon and early this afternoon seeking clarification but Viele has not returned our calls.

We did speak to Paul Viele, Ron's son and a member of the City Council. He said he didn't participate in the interview with his father but did say "it's possible" there is mold in the mall, especially given the leaks and moisture in the mall.

He said the city should hire a professional to evaluate whether there is mold.

"We don't do that kind of work," Viele said. "We're contractors."

Until the merchants' attorneys move forward with the settlement, it would be up to the mall association to hire a contractor to deal with any potential mold, Molino said.

However, he said, as part of the settlement process, a third-party consultant was brought in to evaluate the mall concourse. Molino said he can't release that report, even as part of a FOIL request, because it's part of the technically ongoing litigation, but that consultant found no evidence of mold, he said.

As for whether it's possible, of course, it's possible, Molino said. It's also possible, he said, that if you have forced-air heating in your home that you have mold in your home. In fact, if you haven't had your ducts cleaned in a long time, it's likely. That doesn't mean the mold is harmful. It depends on the type of mold and a person's sensitivity to it.  It would take a professional, not just somebody looking up at the ceiling, to determine if mold is present. (Here's what the CDC says about the health risks of mold.)

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."

Update, 11 a.m., Feb. 8:

Contacted by The Batavian this morning, Robert Chiarmonte, Mall Merchants Association board chairperson, would not comment on Tuesday's meeting.

"I've been advised by counsel (attorney) to not speak about the negotiations," Chairmonte said.

He did say that another meeting is planned and it will be "soon."

City Centre business owners and managers met Tuesday afternoon with Mall Merchants Association leadership and attorneys to learn the details of a proposal to end a 10-year dispute with the City of Batavia over the condition of the structure's roof.

A person close to the negotiations said a mediator had been called in to facilitate an out-of-court settlement over who is responsible for the maintenance of the mall's leaky roof.

City Manager Jason Molino said the two sides "continue to work toward a mutual agreement, with ongoing discussions" focused on settling the issue "outside of court, if possible."

Both sides have agreed to drop their lawsuits against each other in the years-long battle over who is responsible for the condition of the roof over City Centre, City Manager Jason Molino told WBTA this afternoon.

The City Centre Mall Merchants Association is scheduled to meet tomorrow to discuss a proposed settlement, according to a document acquired by WBTA.

The agreement will include an out-of-court settlement, Molino said, but he declined to reveal when the settlement will be made public.

The merchants have long maintained that the city is responsible for repairing the mall's leaky roof while the city has asserted that the mall association failed to keep up with routine maintenance. 

Via The Batavian's news partner, WBTA.

A lawsuit over the state of the dilapidated City Centre mall that began in 2008 may be nearing a settlement according to a source who provided information to WBTA.

The document is a notice for members of the City Centre Merchants Association to hold a special meeting tomorrow to discuss a possible settlement with the City of Batavia.

A vote on the possible settlement would reportedly come at a meeting on another date.

City Councilmembers have told reporters that there has been discussion behind closed doors about a possible resolution.

Via our news partner, WBTA.

The New Year's Eve party at City Centre to celebrate Batavia's centennial has given rise to a new point of contention between the city and the Mall Merchants Association.

While there is a long simmering dispute over who is responsible for a troubled roof and other repairs to the structure, and with a city-filed lawsuit pending over alleged unpaid rents, Mall Director Madeline Bialkwoski says you can now add "trespass" the the association's list of complaints.

Prior to Wednesday's event, Bialkowski sent a letter to City Manager Jason Molino that said as far as the association was concerned, using a portion of the mall concourse for a dance floor and photo studio was never authorized by the association.

"Therefore, we are once again letting you know that you do not have permission to use our insured and leased concoure space for your New Year's Eve Celebration and respectfully request that the City gate remains closed and locked," Bialkowski wrote to Molino.

Reached at his office this afternoon, Molino said, "We own the mall."

Asked if that isn't a bit like a landlord saying "I'm going to use your house for a party," Molino said there's a difference between a residential property and a commercial property. The city owns the space and therefore doesn't need the permission of the merchants to use it.

Bialkowkski said the association's big concern is over its insurance. She said the association's policy, like most mall policies the past few years, forbids the consumption of alcohol in the concourse.

"It voids our insurance," she said. She's concerned, she said, that now that the party has taken place, what the ramifications might be for the association's policy.

Molino said the city had insurance to cover the event.

"We had everything we needed in place," Molino said.

The event included a cash bar in the second floor community room and partygoers were free to carry drinks, if they wished, into the portion of the concourse being used for the party.

Bialkowski thinks the conflict could have been resolved if the organizers had been willing to put up signs and station one or two people in the stairway to ensure drinks were not carried down stairs.

"There justification is that they had insurance," Bialkowski said. "A million dollar policy with an additional insured is nothing in today's atmosphere."

Bialkowski said she first alerted Vibrant Batavia to the potential problem as far back as August and raised concerns then.

Leanna Di Risio, of Vibrant Batavia and a member of the Centennial Committee, wrote a letter to Bialkowski on Nov. 7 outlining celebration plans and requesting the mall association's support of the celebration.

The association's operating committee voted Dec. 4 to deny the committee permission for use of the space. (Dec. 4 is a late date for such a decision, Bialkowski admits, but said the committee couldn't meet in November because of travel and vacations of members).

The city has filed a suit against the merchants claiming the association owes more than $800,000 in back rent for the concourse.

As for the claim of trespass, Molino said, "The mall merchants are just being obstructionists."

Bialkowski said she realizes she could have called the police on the trespass complaint, but felt that would just be unfair to any officer who responded, putting the officer in awkward position.

"No one here wanted to ruin the event," Bialkowski said.