TOWN OF NIAGARA (WBEN).......To Jason Krempa, it was a no-brainer to provide a series of tax breaks for the struggling Fashion Outlets of Niagara Falls shopping center.
"We didn't want another Bethlehem Steel on our hands," said Krempa, Niagara County Industrial Development Agency chairman.
Fashion Outlets, with more than 100 stores, eateries and retailers spread among its more than 700,000-square-feet, is not only one of the region's largest shopping centers, in Niagara County is its one of its largest employers and tax payers along with sales tax revenue generators.
To see Fashion Outlets close, or severely scaled back could have a deep, negative economic ripple effect on the county, Krempa said.
That's the NCIDA directors, during its June 17 meeting, approved a series of tax breaks that will save the mall's owner - the publicly traded Macerich Corp. (NYSE: MAC) - $15.4 million during the next decade.
Fashion Outlets, according to documents Macerich provided to the NCIDA, is suffering a retailing perfect storm including a significant drop in Canadian shoppers, increased operating costs and more competition from e-commerce sources.
Canadians, as recently as 2019, accounted for more than 65 percent of Fashion Outlets customer base.
Covid, a weak Canadian dollar and political pushback has drained that customer base.
The mall employs more than 800 workers and has local payroll that exceeds $35 million.
And, coming this October, Macerich is facing a $75 million balloon payment of a CMBS loan that dates back to 2010.
Krempa said Fashion Outlets creates significant spinoff impact.
"Look at all the activity around the mall," Krempa said.
While such major retailers as Bob's Discount Furniture and Costco opted to open their first area stores in Amherst and the Walden Galleria just landed the region's first IKEA store, Fashion Outlets has seen major anchors like Saks Fifth Avenue outlet close but, it has also landed such new tenants as the area's first Urban Planet outlet along with such retailers as Toy Kingdom, Arroyo Boutique and Cinnabon.
"They came to us and asked for help and we were able to work something out," Krempa said.
Total tax breaks amount to $15.4 million during next decade.
Total tax breaks amount to $15.4 million during next decade.
