Local politicians, businesses call on governor to reopen indoor malls

Enterprise file photo — Michael Koff
Crossgates Mall had eerily few shoppers on the last day it was allowed to stay open. 

GUILDERLAND — Crossgates Mall in Guilderland, like large indoor malls across the state, continues to exist in an extended state of limbo as there appears to be no timeline for when they will be allowed to fully open. 

Governor Andrew Cuomo on March 19 ordered the state’s malls to close. 

Mall stores with their own exterior entrances were allowed to reopen during the second phase of the state’s four-phase reopening plan, which the Capital Region entered on June 3

Other businesses that were prohibited from reopening in Phase 2 included event venues, gyms, indoor movie theaters, gaming parlors, places of public amusement, and indoor restaurants and bars.

If the Capital Region continues to meet state-required COVID-19 metrics, the eight county region could enter Phase 3 by June 17.

Standing in front of Crossgates Mall in Guilderland at a press conference on Thursday, Assemblywoman Patricia Fahy said, “Shopping malls have not been included in phase 2, 3, or 4; there has been little word on shopping malls.” 

Colonie Center is the other indoor mall in Albany County affected by the closure.

Fahy said that she and other upstate Assembly members co-signed a letter that was sent to Governor Andrew Cuomo about two weeks ago, urging the governor to include malls — along with other retail businesses — in Phase 2.

“We are waiting [for] word on that letter,” she said.

It appears that most elected officials were not privy to the governor’s reasoning for excluding interior malls as part of the Phase 2 reopening. Although, Fahy said, “We have seen some comments about the fact that it is indoors.”

At his press briefing on Saturday, Cuomo spoke of how global health experts continue to learn new aspects of coronavirus disease 2019. One of the newly observed characteristics of the virus that he reported on is, in indoor spaces, the virus can live in the air for three hours, which Cuomo termed “frightening.”

He said, “It means if I am infected and I am speaking and we have air molecules that I am dispersing, they could linger for three hours.”


Health concerns

It’s estimated that as few as 1,000 COVID-19 particles are all that is needed to infect another person. A single cough or sneeze from a person with the virus could contain as many as 200 million dispersible COVID particles, Erin Bromage, a biology professor at the University of Massachusetts, explained in a wildly popular blog post from May that has now been viewed over 18 million times.

And virtually every non-contact activity — for example, coughing, sneezing, or talking — when done indoors, acts as a superconductor for the virus. Studies of virus outbreaks in Japan and China show the risk of being infected skyrockets indoors. 

Researchers in Japan found the odds of being infected with COVID-19 in a closed environment were nearly 19 times higher compared to open-air environments. The study of 7,324 infected individuals in China identified 318 outbreaks of three or more people — however, only one outbreak occurred in an outdoor environment.

Public indoor spaces, like malls, are environments where the risk of infection increases “due in part to the possible buildup of the airborne virus-carrying droplets, the virus likely higher stability in indoor air, and a larger density of people,” according to research published this month in the peer-reviewed scientific journal, Environment International, on the airborne transmission of COVID-19.

A group of professors from the universities of Oregon and California, have found that public indoor environments are at an added risk for spreading the virus because of their heating, ventilation, and air-conditioning systems.

“Viral particles can be directly deposited and resuspended due to natural airflow patterns, mechanical airflow patterns, or other sources of turbulence in the indoor environment such as foot fall, walking, and thermal plumes from warm human bodies,” the professors write in mSystems, a research journal from the American Society for Microbiology  

“The delivery of recirculated indoor air,” the researchers argue, “could potentially increase the transmission potential.”

Other recent research that has examined the airborne transmission of COVID-19, notes that many public indoor spaces have very low ventilation rates, the rate at which fresh outdoor air flows into the space, meaning, “The likelihood of infected persons sharing air with susceptible occupants is high, posing an infection risk contributing to the spread of the infectious disease,” according to the study’s 35 university co-authors.

Pyramid Management Group, the owner of Crossgates, recently released 14 pages of guidelines for how it will combat COVID-19 in the interior of its malls.

Chief among them are enhanced cleaning and sanitization guidelines for restrooms, common areas, high-frequency touch points, food courts, and seating areas. 

Environmental Protection Agency-approved sanitation cleaners will be used every 30 minutes in restrooms; every 60 minutes on entry handles; three times per day — or more, if needed — on elevator buttons, escalator handrails, railings, trash bins, as well as other touchpoints; and throughout the day on seating areas and food court tables, chairs, and counters. 

“Properties will be thoroughly cleaned, sanitized, and disinfected during non-operating hours” as well, according to Pyramid, “meeting or exceeding CDC guidelines and recommendations.” 

Additionally, an electrostatic sprayer will be used weekly to disinfect numerous locations throughout Pyramid’s properties; the company’s guidelines state, “This cleaning process bonds the disinfectant to surfaces and is reported to be a highly effective way to supplement regular cleaning procedures.”



At Thursday’s press conference, the focus was on the health of the local economy.

“This is one of the largest economic generators in the Capital Region, it needs to be open as soon as possible,” Assemblyman John McDonald said of Crossgates, noting that Crossgates Mall’s 225 tenants, with a collective annual payroll of $41 million, employ well over 2,000 workers.

Approximately 20 businesses in Crossgates are currently open or offer curbside service. 

Crossgates alone generates $34 million in sales-tax revenue — of which Guilderland receives $6.87 million (and another $7 million in property taxes); Albany County collects $10.3 million, and New York State keeps the remaining $17.17 million, according to Fahy’s office.

Guilderland Supervisor Peter Barber told The Enterprise the best estimate of projected second-quarter sales-tax revenue from the county — from April, May, and June — would be down by about 30 percent.

Barber also said that sales-tax receipts from the first three months of the year had been up compared to 2019, and pointed out that part of 2020’s first quarter  had been affected by the pandemic.

Albany County announced its first two cases of COVID-19 on March 12.

The sales-tax revenue for the first three months of 2020 were up in part due to more online sales being subject to the state’s sales tax, he said.

Guilderland, in the second quarter of this year, could take a $1 million hit due to the pandemic. But Barber said that shouldn’t be an issue right now because the town has other revenue streams, and Guilderland is taking added precautions like letting positions go unfilled if there’s a retirement or if an employee leaves for another job, unless the position is absolutely necessary.

He also said capital projects have been put on hold in addition to the town probably cutting back on paving and sidewalk projects. Barber added that Guilderland has healthy reserves, which he described earlier as being “in the millions of dollars,” should the sales-tax shortfall last longer than expected. 

The Office of the New York State Comptroller announced in May that statewide sales-tax collections in April were down almost 25 percent from April 2019. The decline in Albany County’s revenues had been even more stark, with sales-tax collections dropping by nearly a third in the same period, from $23 million in April 2019 to $15.6 in April of this year. 

This month, the comptroller announced statewide sales-tax collections for May were down by nearly a third over the previous. In Albany County, sales-tax collections went from $21.9 million in May 2019 to $15.4 million last month.

Budget modeling from the Wharton School of Business shows that next year New York State could see a COVID-induced year-over-year drop of nearly 5 percent in its $1.75 trillion gross domestic product, loss of $84 billion — an amount of money that is larger than the economies of 11 states in the country

The state’s budget for this year is about $177.5 billion; taxes collected by the state covered 42.5 percent of that bill, about $75.5 billion. In early April, the state forecasted tax revenues to fall by $12 billion next year and by $16 billion the following year.

Should the recession be deeper than expected, tax receipts are projected to decline by $13.3 billion in 2021 and by $17.8 billion ($15.9 billion of which is related directly to COVID-19) in 2021, according to a preliminary COVID-related economic-impact assessment performed in April by the Boston Consulting Group for the state

Not lost on Barber had been what lay at the heart of all the calls for reopening.

“Before we even get started, I want to recognize one thing: This is a health pandemic, so I don’t want anybody to think we aren’t taking this seriously,” he said during the June 11 press conference. “[But] every time you have a rule, there seems to be, every so often, an arbitrariness to it.”

He’d been to other open businesses in the area, he said, some of which have been open for a while, and their employees are all following protocols. 

Fahy said Crossgates’ owner, Pyramid Management Group, “to its credit,” had issued detailed protocols for reopening, adding they were “the most detailed protocols we have seen.” 

Some big-box retailers had been open throughout the pandemic and had done so responsibly, Fahy said, adding that there’s no reason to think that Crossgates and its tenants can’t be just as responsible. 

“In fact, if anything, I’ve seen more details from them,” she said.

One of Pyramid’s common-space protocols, Fahy said, “is that they will direct traffic.” A move familiar to anyone who has shopped in a supermarket since the pandemic started, where customers are only allowed to enter aisles from one direction. 

Data from a group of Harvard University and University of Chicago researchers indicates that the pandemic has caused 2 percent of small businesses to close permanently. 

Some stores in Crossgates are “hanging by a thread,” Fahy said.

In May, only about 60 percent of commercial retail rents were paid, down from 93.5 percent the year prior. 

 Asked by The Enterprise if Crossgates’ tenants had not been paying rent, Michael Gately, the mall’s general manager, said, “That is something that we’re working through with each tenant as we go,” adding that tenants had been impacted by their inability to collect revenues.

Gately was then asked if Crossgates is offering tenants some kind of rent relief, to which he responded that was a discussion being had with each of the tenants and not something he could discuss publicly. 

In its latest Securities and Exchange Commission filing regarding the Crossgates-contained $691 million commercial mortgage-backed securities (CMBS) conduit transaction, Wells Fargo states that the remaining $105 million mortgage loan Pyramid holds on Crossgates was 30 to 59 days delinquent with $1.35 million in outstanding principal and interest payments, but still in a grace period. 

The May 29 Wells Fargo SEC filing noted that, because of the governor’s March 19 order to shut down shopping centers, “the mall and its tenants have suspended operations; many are not remitting rent.”

Crossgates saw its net operating income drop by about 18 percent in the first three months of this year compared to the same time last year, from about $8 million in the first quarter of 2019 to $6.78 million in January, February, and March of this year. 

Two other separate Crossgate mortgage loans included in a different commercial mortgage-backed securities conduit transaction total a little under $95 million of additional remaining debt, according to a different SEC filing. 

Those two loans are two months delinquent and carry roughly $1.21 million worth of outstanding principal and interest payments, the filing notes that the loans are in modification. 

A third CMBS conduit transaction containing two Crossgates mortgage loans totaling about $63 million are a month delinquent and about $800,000 behind in principal and interest payments, but are still in a grace period.

The separate SEC filing states, “In response to COVID-19, the Governor of NY closed all non-essential businesses, including all enclosed malls, so the mall and its tenants have suspended operations; many are not remitting rent. [Special servicer] is in discussions w/ the Borrower and formulating a plan.”

The Kroll Bond Rating Agency in May reported that Pyramid, with $1.3 billion in CMBS loans, had been “exploring potential restructuring options or debt relief from lenders.”

But Pyramid is in no danger of declaring bankruptcy, it previously told The Enterprise. 

Guilderland residents Phillip and Andrew Pevzner first opened their sneaker store, Laced Up, in 2016 in Crossgates Mall, and have since expanded their business to four stores. The closure took its toll on their finances, Phillip Pevzner said, because, as owners, the brothers couldn’t apply for unemployment. 

Pevzner said Laced Up had received federal loans but added that the government needed year-old financial records on which to base its decision, which doesn’t reflect the business’s current financial situation. Within three-and-a-half to four years of opening Laced Up, according to the brothers themselves, their business was doing $5 million in sales.

The loan helped some, Pevzner said, but “we need to reopen to stay alive; that’s the bottom line.” 

Over $500 billion in Paycheck Protection Program funds have been loaned out by the federal government, according to the United States Small Business Administration. In New York State, almost 295,000 loans worth $37.5 billion have been handed out.

Joined: 01/01/2015 - 10:51

Excellent piece, tells all we ned to know.

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