GUILDERLAND — A large project near Crossgates Mall repeatedly delayed by lawsuits appears to be back on track — with a new owner. 

Pyramid, which had owned the property and came up with the original plan for its development, has had trouble paying its bills lately. In May, Pyramid sold a 1.5-acre parcel near Crossgates to a Rotterdam developer before selling the 20-acre parcel, slated for 222 units, to a Troy developer in June.

Previously identified as Pyramids’ Rapp Road residential project, the 222-unit proposal — 192 apartments and 30 townhomes — has been branded by its developer as The Apex at Crossgates.

The project developer, UG Family, is a limited-liability company owned by the United Group of Companies out of Troy, which used another one of its LLCs to buy the nearly 20-acre parcel from Crossgates for $5.43 million in June, according to the deed filed with the Albany County Clerk’s Office.

On July 13, the Guilderland Planning Board will hold a public hearing “regarding a site plan amendment” being proposed for the development.

The initial plan, which received town approval in October 2020, proposed three two-story townhouse-style buildings, with 10 units in each building, totaling 30 units, on the west side of the parcel, or rear of the property running parallel to Rapp Road.

Pyramid then proposed two five-story L-shaped apartment buildings, one with 94 units and the other with 98 units, one either side of one of the two entrances near the front of the development. The project also proposed a total of 362 parking spots: 84 indoor and 278 outdoor.

Pyramid had to overcome legal challenges to proceed with the project.

In May, for the second time in less than a year, an appeals court ruled in favor of the town of Guilderland and Pyramid Management Group in lawsuits filed over the company’s proposed Rapp Road and Western Avenue projects.

The May 5 ruling from the state Supreme Court’s Third Appellate Division upheld a lower court’s decision in a suit brought by Save the Pine Bush in November 2020. The same appeals court in July 2021 overturned a September 2020 suit brought by a group of Westmere residents seeking to halt the projects.

The new Apex at Crossgates project proposes more spacing out of the development in addition to moving the site’s mid-rise buildings farther away from the Westmere Terrace neighborhood where some residents had objected to the projects and filed an unsuccessful suit to stop it.

The project narrative submitted to the town states the “222 residential units will remain consistent with the previously approved site plan,” but it’s also “noted that with this plan that the additional 90 units, designated as future development, will be permanently abandoned.”

UG’s proposed site amendment is to shift the “two 5-story multiple residence buildings approximately 300 feet to the north and further away from the Westmere Terrace neighborhood,” according to the town. The two five-story buildings would be “located on the south side of the project site, a minimum of 150 feet from the property line and Westmere Terrace neighborhood.”

According to the town, “By shifting the 5-story buildings further to the north this will minimize visual impacts from the Westmere Terrace neighborhood.”

The new site layout shows five townhomes with six units each running along the perimeter of the parcel, with two townhomes backing onto the Westmere Terrace side of the development and the other three buildings placed across the rear of the parcel running parallel to Rapp Road. The two U-shaped apartment buildings have been pushed closer to the city of Albany side of the parcel, which is adjacent to a 1.6-acre piece of forever-wild property owned by The Nature Conservancy.

The new project calls for 355 parking spots: 183 outdoor and 172 first-level spaces beneath the 192 apartments, according to the proposed site plan and project narrative, which also says, the new layout of the development “reduces the amount of surface parking needed and the amount of impervious cover on the project site.” 

UG’s environmental assessment form states 5.5 acres out of the site’s overall 19.68 acres would become impervious surface, nearly identical to the 5.69 acres that would have become impervious under Pyramid’s proposal. 

The project’s environmental assessment form states 12.3 of 19.68 acres are to be disturbed for construction, which would take about 24 months.

Crossgates

Pyramid’s June sale of nearly 20 acres to the United Group was the second time in as many months that the company, through one of its affiliated LLCs, has sold portions of its land near Crossgates Mall.

In May, Pyramid unloaded a 1.5-acre parcel to a Viscusi Builders’ LLC for $605,000. In February, the Rotterdam developer proposed building 24 apartments on the site, which is sandwiched between Crossgates Mall and the Hilton hotel on Western Avenue.

The land sales are a departure from Pyramid’s recent development modus operandi. 

Starting in 2017, the company shepherded a 192-room Hilton hotel through the project approval process. The Western Avenue hotel, which required a Pyramid-affiliated LLC to obtain $17.5 million in order to build, sits on land that the LLC continues to own. 

The Syracuse-based Pyramid, through an LLC, had been the original applicant on the 222-unit Rapp Road project as well as the developer of a proposed Costco Wholesale store on a nearby Western Avenue parcel. 

But the pandemic appears to have exacted a toll on the company, which did not respond to requests for comment for this story. 

In between the May and June land sales, Crossgates continued to take legal action against its tenants in addition to readying itself for a showdown with the town of Guilderland over its tax bill. 

As the pandemic raged and consumers stayed home, a number of Crossgates tenants stopped paying rent. As of October 2020, the mall had filed suit against at least 10 tenants owing a collective $1.9 million in combined derelict lease payments. Crossgates ended up dropping most of the suits. 

Crossgates’ tenants in 2020 reported total sales of $266.5 million, down from  $416.8 million in 2019, according to a recent filing in its tax case against the town. 

On June 29, the mall filed a lawsuit against Amazon for approximately $630,000 in back-rent owed on the internet giant’s brick-and-mortar Crossgates store, which had opened in February 2021 — the same month a 10-year lease went into effect — and had been “abandoned” by Amazon as of March, according to court documents.

One court action that continues to embroil the shopping center is its attempt to halve its town tax assessment. 

In July 2020, citing the impact of the pandemic and the yearslong decline of brick-and-mortar retail, Crossgates asked an Albany County Court judge to lop off $139 million from its $282 million tax assessment. In a July 2021 petition, the mall, again citing similar reasoning, requested that Justice Margaret T. Walsh slash $162.5 million from its current assessed value of $282.5 million.

In mid-June, a three-day trial was set for Nov. 14 in Crossgates’ tax certiorari case against Guilderland. If the mall were to win its suit, the amount it pays to taxing jurisdictions — the town, school district, library, and county — could be cut by about half.

In an appraisal submitted to the court, Guilderland estimated Crossgates’ tax bill for 2020 and 2021 would have been $6.98 million and $7.02 million, respectively. However, the appraisal states, “because the assessments are under appeal, the eventual actual real estate taxes are unknown.”

In tax year 2019, the seven parcels of land that collectively make up Crossgates paid about $7 million in property taxes.

Pyramid

Pyramid has had difficulty with paying its bills as of late. 

Over the course of the pandemic, Crossgates missed about $10 million in principal and interest payments on approximately $250.7 million in debt spread across three loans associated with the property, for which the mall has at least $1.68 million in monthly loan payments. The mall received a year’s extension to pay back the loans, which now come due in mid-2023.

In April and May of last year, respectively, The Wall Street Journal and Bloomberg reported the company was struggling to make its massive mortgage and municipal bond payments on Destiny USA, the largest retail center in New York State. 

Pyramid owed $430 million in mortgage loans and another $285 million on bonds issued by the Syracuse Industrial Development Agency to help fund a 850,000-square-foot expansion of the mall in 2007. 

Bloomberg reported last May that Pyramid had “hired restructuring advisers and has sought a meeting with investors” about its municipal bond debt. 

The Post-Standard of Syracuse reported on June 13 that Destiny USA still owed about $278.5 million on the municipal bonds and that the entirety of the mall’s $43o million mortgage had come due on June 6, but that Pyramid had requested forbearance from its loan provider in April. 

The Post-Standard also reported in mid-June, “Obtaining new financing on Destiny has proven to be one of the mall developer’s biggest challenges because the total debt on the property is around five times its present value. Kroll Bond Rating Agency estimated in a March 25 report that the mall is worth just $139.2 million.”

In March, Buffalo Business First reported Pyramid owed more than $237 million on a loan for its Walden Galleria mall, located in the Buffalo suburb of Cheektowaga. 

The entirety of the loan was due in full in May, but Pyramid requested a five-year extension, ultimately receiving a three-year reprieve in June. 

“Of Pyramid’s 14 shopping center properties,” according to Buffalo Business First, the company had “outstanding loans for 11, totaling more than $1.34 billion.”

Locally, Pyramid avoided a $30 million balloon payment on two Crossgates Commons loans set to come due in May by refinancing the loan with a 10-year repayment term.