Syracuse, NY. – After two court victories, Onondaga County is swiftly flexing its eminent domain power to seize control of the former Macy’s store at the vacant ShoppingTown Mall.
The Onondaga County Industrial Development Agency filed an eminent domain action in state Supreme Court in Syracuse on Thursday to take title to the shuttered department store.
The filing comes just a week after the Court of Appeals, the state’s highest court, refused to hear an appeal of a preliminary action the development agency took on Feb. 15, 2024, as a first step to taking the former Macy’s and Sears stores at ShoppingTown by eminent domain.
The Appellate Division of state Supreme Court had previously ruled against the owner of the Macy’s store -- 3649 Erie LLC, an offshoot of Benderson Development -- and the owner of the Sears store, Transform Saleco LLC, a Sears-created entity. The two companies contended that the agency was overstepping its authority by using its eminent domain power to seize property for a private development.
The development agency responded that its action was well within its authority and was necessary for the redevelopment of the mall into a proposed mixed-use center called District East that would contain retail and office space, entertainment venues, and housing.
Most of the mall would have to be demolished under the plan by OHB Redev, the local development group behind the District East project.
The mall off Erie Boulevard East in DeWitt closed in 2020. Soon afterward, Onondaga County bought the 60-acre property from Moonbeam Capital for $3.5 million and agreed to waive nearly $10 million in back taxes and $3 million in interest and late fees.
However, the former Macy’s and Sears stores were separately owned and not included in the sale, and efforts by the District East development team and the county to purchase the stores were unsuccessful.
Thursday’s court filing by the county was limited to the former Macy’s store. Onondaga County Executive Ryan McMahon said the county is holding off on filing an eminent domain action against the owner of the former Sears store because the two sides recently agreed on a sale price for the store.
Under the state’s eminent domain procedure law, the county’s development agency can take ownership, with court approval, of a property to facilitate its redevelopment. In the case of ShoppingTown, the proposed District East development would transform a blighted former shopping mall into a vibrant new community center, according to the county.
The agency will be required to pay Benderson fair market value for the former Macy’s store. If Benderson and the county do not agree on what that value is, the court would decide.
McMahon said Friday he is hoping Benderson and the county can reach an agreement on a sale, eliminating the need to go further with the court action.
He said he wants to push ahead with the redevelopment of the mall. And he reiterated his statement last week that he would like to see high-tech research and development and light manufacturing, along with the District East project, at the ShoppingTown site.
McMahon announced in 2021 that he had reached a deal to sell the mall to OHB Redev for $8 million. He told syracuse.com | The Post-Standard on Friday the agreement with OHB Redev expired early this year.
He said he is open to signing a new deal, but one that would allow for the development of a portion of the site into a park for high-tech companies drawn to the region by the giant semiconductor factory that Micron Technology plans to build in nearby Clay.
Micron announced its selection of Clay for the $100 billion investment in 2022, a year after McMahon reached an agreement to sell the mall to OHB Redev. He said the Micron project has changed his perspective on the ShoppingTown site, given the demand for real estate that the county is likely to see from the semiconductor and other high-tech industries.
“I think District East is a good concept, just not a good concept for the (whole) 60 acres,” he said.
