HAMBURG, N.Y. — 2 On Your Side has learned exclusively from Hamburg town supervisor Randy Hoak that the McKinley Mall will be up on the real estate auction block come April.
The auction websites list the starting bid at $3 million.
It was seemingly a normal weekday at McKinley Mall with some cars and lots of empty spaces in the parking lot. The mall is indeed usually very quiet since many retail tenants have pulled out over the years and the mall went into foreclosure back in 2018, according to Buffalo Business First.
It was bought in 2021 for $8.5 million by developer Michael Kohan's Long Island-based real estate firm.
But now there is a major new development as the McKinley Mall is on the auction block with listings for the 75-acre property, which is said to be just over half-full with retail tenants.
Supervisor Hoak says he first learned about the auction as he was contacted by a sharp-eyed resident.
"I was able to go to the website and confirm that indeed the property appears to be up for auction. We were not able to connect with anybody from the Kohan Group regarding the sale of the mall," Hoak said.
Hoak says he tried to reach out to Kohan's firm but got no response.
2 On Your Side asked Hoak what he feels about the future of the mall, which was a significant taxpaying property for the town and school district.
"It's a business, and developers are looking to make money. But we want services for our residents," Hoak said. "We want a thriving business community, so whatever happens with the future of the mall, our hope is because of the development that has happened around the mall and throughout Hamburg that there's renewed interest."
Hoak would like to see Benderson Development, which owns the thriving strip mall across McKinley Parkway, come back with some purchase interest. That would be just as it did in 2021. Benderson lost out when a judge ruled their bid came in too late. Benderson and the town were unsuccessful in their efforts to legally block the mall sale to Kohan.
Again, the supervisor says he has not heard back from Kohan or his firm. He did say Kohan's firm is current on their taxes. In the past Erie County had problems with the former owner, and the tax assessment for the financially troubled retail complex mall was significantly reduced.
In the meantime at the mall, there are still stores like JC Penney, Barnes and Noble, Best Buy, and other small attractions such as Dipson Theaters.
But also there is a new retail wrinkle from industry analyst Burt Flickinger, who says Costco, which is opening a store sometime next year in Amherst, really likes Western New York. So we asked if he thought McKinley Mall could ever work for a Costco location.
"Too early to tell, but I would expect from our worldwide knowledge of Costco for Costco to seriously look at McKinley Mall and build in the Southtowns," Flickinger said.
Flickinger went on to further explain that he thinks the affluent Southtowns market with Hamburg, Orchard Park, and East Aurora lines up nicely in a comparison, just like Naperville, Illinois, where Costco has actually put in two very successful stores. He does acknowledge that BJ's Wholesale Club is located nearby in Hamburg.