Syracuse, N.Y. – Pyramid Management Group said Thursday it has reached a deal that will allow it to continue operating western New York’s largest shopping mall while it seeks new financing for the center.
The Syracuse-based company, which counts Destiny USA among its shopping mall holdings, has been fighting a foreclosure action on the Walden Galleria filed May 29 by holders of a $220 million mortgage loan on the Buffalo area mall.
Judge Emilio Colaiacovo, of state Supreme Court in Erie County, appointed a receiver for Walden Galleria on June 5. And on July 16, he approved the appointment of Syracuse-based Spinoso Management Group to take over operation of the mall from Pyramid starting Wednesday of this week.
Pyramid has been fighting the takeover of the mall by lenders in court. But Thursday, it issued a news release saying it has reached an agreement allowing it to continue managing the mall while it seeks new financing.
“This agreement enables us to maintain full operational oversight of the Walden Galleria while we work to secure new financing that will support the ongoing success and future vitality of the center,” the company said. “We have been actively engaged in discussions with several prospective lenders and are confident in placing new, long-term debt.”
Buffalo Business First reported that the agreement requires Pyramid to make a series of payments totaling $4 million between now and late September, when it must deliver letters from new lenders.
In the meantime, the court-appointed receiver, attorney William Savino, will continue in that role, the publication reported. As receiver, he collects all rents from the mall’s tenants and passes them along to lenders after expenses are paid.
Wells Fargo Bank, acting as trustee for holders of Walden Galleria’s commercial mortgage-backed securities loan, initiated the foreclosure action after Pyramid missed a May 1 deadline to pay off or refinance the loan.
In a foreclosure, a lender takes control of a property and will usually seek a buyer for it.
Pyramid also missed a deadline to refinance or pay off a $300 million loan on Destiny USA in June 2024, putting that mall, New York’s largest, at risk of foreclosure. Despite the default, however, holders of the debt have not initiated a takeover of the Syracuse mall.
Pyramid, which was founded by the late Robert Congel, argued in a court filing Thursday that its failure to pay off the Walden Galleria loan by its maturity date was caused by factors beyond its control. It cited the “unforeseen and unprecedented collapse of the brick-and-mortar retail industry, an extraordinary and unanticipated market disruption that has rendered performance under the Loan Documents impracticable – if not impossible."
In addition, the company said volatility in the financial markets caused by President Trump’s tariffs, both threatened and imposed, has “significantly chilled lending.”
Despite the “catastrophic downfall” of the brick-and-mortar retail industry, Pyramid said Walden Galleria has been performing well under its management, with an occupancy rate that stands at 90.6%.
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