News story made available courtesy of Poughkeepsie Journal

Controversy surrounds mall proposal

Shopping spot would be built in prime site

Sunday, March 2nd, 2008

By Craig Wolf
http://www.poughkeepsiejournal.com

Another major mall will be added to the region's roster if all goes well for a Westchester developer who wants to build the Market Place at Newburgh.

So far, the Wilder Balter Partners Inc. of Elmsford have taken title to the 120-acre tract near Interstate 84 and the state Thruway; gained preliminary site plan approval from the Town of Newburgh planning board and gotten a fair amount of buzz about their plan.

They say it includes a Costco Wholesale Corp. outlet, a members-only discount house currently missing from the mid-Hudson scene. The mall would have other big-box stores and a "village"-themed section of smaller retailers, called a "lifestyle center."

The project would build 850,000 square feet of stores. That's bigger than the South Hills Mall but smaller than the Poughkeepsie Galleria, both in the Town of Poughkeepsie.

Some opposition starts
Wilder Balter Partners have also attracted opposition from a group of neighbors organized as Save Open Space, or SOS, and from a corporate neighbor, Newburgh Capital, owner of the Newburgh Mall on the other side of Route 300, Union Avenue. The developer and the planning board face two lawsuits from these parties.

One suit is novel. The developers refused to allow opponents to come on the land with their own consultants; the opponents sued to get access. It's still in the courts.

The developers need several agency permits, including road connections to Route 52, Route 300 and the Exit 8 interchange on Interstate 84. They need permits for utility connections and permits from the state Department of Environmental Conservation and the Army Corps of Engineers, the latter of which relates to wetlands that would be disturbed and that would have to be replaced by new ones elsewhere.

John Bainlardi, senior development manager for Wilder Balter, said the property was bought three years ago and that the planning board was approached in July 2004.

Return to planning board
The next step is to come back to the planners for a final site plan approval, probably this spring, Bainlardi said.

The whole project is likely to cost $130 million, he said.

No store names were given beyond Costco, and probably Best Buy, but Bainlardi said six or seven large stores would be there.

"We're close to finishing up deals with a couple of other larger boxes," Bainlardi said. On the lifestyle center, "The response is positive," but no deals have been signed.

Such tenants usually want assurance that other tenants will be neighbors.

"Nobody wants to be the first one to sign," Bainlardi said. "Once you hit that critical mass, I'm expecting that the leasing of the lifestyle center will go pretty well."

While Costco is known to have interest in the area, the company would not confirm a deal with the Market Place.

Staff at the Issaquah, Wash., office passed along a standard comment from Costco Chairman Jeff Brotman: "Our corporate policy is to not comment on specific markets."

The Wilder Balter Partners have taken a big gamble on their Market Place plan.

Though they have long experience in residential work, including apartments, this is their first real commercial project. And it's not a slam-dunk.

"A lot of major retail developers had looked at the property throughout the years," Bainlardi said. They passed.

The partners "saw an opportunity, a piece of property that was available that had a lot of potential but a lot of issues to overcome," he said.

One retail expert in the area said the mall's size of 850,000 square feet "is a lot of square footage to absorb," even with Costco taking a large chunk.

Because it's not far from the Hudson River, it's sort of boxed in, said David Livshin, president of Dagar Group in Fishkill. The Market Place will have a primary customer base that's relatively close by, given the store saturation in Middletown, the Kingston-Lake Katrine area and the well-stored Route 9 strip tending to keep Dutchess residents from crossing.

However, Costco, if that pans out, would be a major draw, Livshin said. Delays on development could jeopardize the plan.

"If things are not done and finished, you could have people pulling out," he said.

Joel Sachs, an attorney for Newburgh Capital, owner of the Newburgh Mall, said that company has concerns about the projected traffic impact on Route 300, which gives access to the Newburgh Mall.

Plan addresses concerns
Michael Donnelly, attorney for the planning board, said the board's position is that those concerns have been adequately addressed in the environmental study and site plan.

But asked whether fear of competion were a factor, Donnelly said, "I can't imagine that isn't some part of their motivation," but that it's not a part of the lawsuits.

Delays caused by the lawsuits could emerge.

Laura Kohlman, a spokeswoman for Save Open Space and a nearby neighbor, said, "We've been fighting it and fighting the issues since 2004 when they first announced the mall was coming in."

Neighbors are worried about the blasting of thousands of cubic yards of hillside rock to make level ground, a move that will leave some neighbors looking over the roofs of stores, she said. Private water wells may be affected, they fear.

The town's ambulance corps is located between two of the entrances to the proposed mall.

"They often now get stuck in traffic," Kohlman said.

A huge traffic increase, potentially 2,400 vehicles per hour at peak, is projected, she said. "That's a big concern with the flow of traffic. It's already backed up now."

The developers' environmental impact statement came up with answers to all the objections and the planning board accepted it, giving preliminary approval in October.

"Those issues, we feel, have all been addressed and mitigated by modifications of the design of the property," Bainlardi said.

Sachs, who is attorney in both suits in which SOS and Newburgh Capital are plaintiffs, said the second suit, venued in state Supreme Court in Westchester County, was filed in June and is just beginning. It asks the court to review the board's environmental findings statement and site plan approval, arguing that the State Environmental Quality Review Act's requirement for a "hard look" at impact had not been adequately met. Papers are due in May.

The earlier suit, venued in Orange County, state Supreme Court, with the same plaintiffs and defendants, is one that will not only be important in this case but could set a precedent in state environmental law.

In a move Sachs said is very unusual, Wilder Balter denied SOS and Newburgh Capital permission to go on the lands.

"We submitted reports from our consultants saying they had doubts about the developers' information and they needed to go on the site to make an independent investigation," Sachs said. "The developer refused to allow us to go on the site."

Suit dismissed
Justice Joseph Allessandro dismissed the lawsuit for procedural flaws without reaching the merits of the claim, which was that state law gives a right of access in such cases.

Sachs said a consultant in the case stated that he's been in 100 land-use applications but that this was the first time he'd seen a developer refuse to allow independent consultants.

SOS and Newburgh Capital appealed to the Appellate Division. Tuesday, a four-judge panel heard oral arguments. Sachs expects a ruling in perhaps 30 to 60 days.

Should the panel overrule Allessandro's decision and reinstate the suit, it could take the Market Place case back to an early review stage, Sachs said, with evidence presented again in a new environmental review. "You may end up with a very different site plan," he said.

"The more they protest, the more it seems like there's something they want to hide," Sachs said.

That suit also names the planning board as a defendant. Donnelly, the board's attorney, said the board declined the plea from SOS and Newburgh Mall to order the developers to allow access.

"We said we didn't have the legal authority to do that," Donnelly said. He expects legal and permit issues will likely delay the mall considerably.

Despite the challenges, Wilder Balter's Bainlardi sounds optimistic.

"We have a comfort level that we're going to get a shovel in the ground this year," Bainlardi said.