Berkshire Business Outlook: Future of Berkshire Mall at crossroads

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LANESBOROUGH — Private enterprise or public property?

The Berkshire Mall's future could rest with who owns the county's largest enclosed shopping center and if it becomes something other than solely a retail complex.

Under pending state legislation, the Baker Hill Road District, the Lanesborough-based entity that has legal jurisdiction over the mall's property, has asked that its bylaws be changed so it can own and maintain real estate, which means it could buy the struggling shopping complex from its current owner, Mike Kohan, the principal of Kohan Retail Investment Group, which owns shopping centers in 15 states (the company is known locally at Berkshire Mall Realty Holdings LLC). Kohan purchased the 30-year-old shopping complex for $3.5 million in September 2016.

Under its current bylaws, the Baker Hill Road District owns and maintains the mall's connector road between routes 7 and 8. It can monitor activity at the shopping complex, but has no say in how the privately-owned complex is run. If the legislation is approved, and the Baker Hill Road District actually buys the mall, it would be financially responsible for owning the 720,000-square-foot property not the town of Lanesborough.

District, town and local state lawmakers all believe that the mall's fortunes can be revived under public ownership.

"The conventional mall is a thing of the past," said Bill Prendergast, chairman of the Baker Hill Road District's Prudential Committee. "Hopefully we can start bringing things back to the mall."

State Rep. John Barrett III, D-North Adams, and state Sen. Adams Hinds, D-Pittsfield, have backed the Baker Hill legislation that was originally proposed by late state Rep. Gailanne Carridi. Barrett, who replaced Carridi after her death last year, believes the district has the best chance to make the mall successful.

Since 2015, the Berkshire Mall's occupancy rate has dropped to around 50 percent. Four of the mall's anchor tenants, Best Buy, Macy's, J.C. Penney and Sears have left (J.C. Penney and Sears were the mall's two remaining original anchor tenants.) Target remains the mall's lone prominent national retailer, but that chain owns the building that it is located in, which is attached to the mall.

In Lanesborough, Select Board Chairman John Goerlach said neither the town nor the district can continue to sit and watch what's left of the mall decline.

"I don't want to wait another year and have everyone gone," said Goerlach, who is also a member of the Baker Hill Road District's Prudential Committee. "As a leader of the town, I can't watch us fall further behind in revenue."

At $19.5 million, the mall is the town's most highly assessed property. That sum is more than six times what Kohan Retail Investment Group paid for the complex. Kohan, which specializes in purchasing and trying to revitalize distressed shopping malls, has had problems in meeting the deadlines for its financial commitments to both the town and the district. The mall's owner currently owes $770,000 in back tax revenue: $337,000 to the town and $433,000 to the district, for the current fiscal year that began July 1. Kohan has had similar problems at other shopping complexes that it owns. Those are not encouraging signs.

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So whether it's privately or publicly owned, the Berkshire Mall needs a transformation to revitalize it as a destination for locals and visitors alike.

"One of the biggest advantages is everyone on the [prudential committee] is a lifetime resident and we want to do what's best for the community," said committee member Linda Pruyene.

In a recent survey, 75 of the 237 participating town residents agreed that revitalizing the mall is crucial to the town's future economic development.

"The mall should be a large focus," one respondent wrote. "People go out of their way to go to the outlet mall in Lee. That should be our mall bringing business to Lanesborough."

The mall's woes are not exclusive to Berkshire County. The problems that have effected brick and mortar retailers nationally, have led to similar problems at malls across the country. Some communities have found creative ways to revitalize these large complexes. A mall in Antioch, Tenn., re-opened in 2013 with a satellite campus of Nashville State Community College, a recreation center, a library and an ice skating rink, in addition to 617,000-square-feet of retail space.

The Berkshire Regional Planning Commission has embarked on a $70,000 18-month project to find ways to fill the Berkshire Mall's empty spaces.

Housing, indoor agriculture, and family-friendly activities are among the options the study might consider after research is conducted on how other malls across the country are surviving the problems that national retailers face.

The way the Berkshire Mall was constructed makes it a candidate for a variety of possibilities.

"You, in essence, have rectangular spaces. You can go in, take out the fixtures; you're really dealing with a shell," said Berkshire Regional Planning Commission executive director Nathaniel Karns.

Laura Brennan, the agency's senior planner for community and economic development., said retail could still be a vital part of the mall's future.

"One of the many scenarios is a re-imagined retail component," she said.

Selectman Robert Ericson still views the mall as a shopping destination.

"When it's not a good day for skiing, you could always go to the mall, but we need a place that attracts tourists," he said. "A certain percentage of online shopping will continue, but others want to feel and see what they are buying."

Mall revival

Three examples of re-purposed shopping malls.

Arcade Providence: The country's oldest enclosed mall, this complex in downtown Providence features micro apartments on the two upper floors and 17 retail establishments on the ground floor.

Hickory Hollow Mall: This complex in Antioch, Tenn. re-opened in 2013 as Global Mall at the Crossings. It contains a satellite campus of Nashville State Community College, a recreation center, classrooms, a library and an ice skating rink along with 617,000-square feet of retail space.

Rotterdam Square Mall: Formerly owned by the Berkshire Mall's current owner, this shopping center in Schenectady, N.Y. was purchased by the Turkish company ViaPorter Properties for $10 million in 2015. Renamed ViaPort Rotterdam, the complex now has an aquarium, and an office for a state government agency that is located in a former department store. The retail presence has increased. The occupancy rate has gone  from 60 to nearly 80 percent

Dick Lindsay can be reached at rlindsay@berkshireeagle.com and (413) 496-6233




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