MERIDEN — The Namdar Realty Group paid $12.5 million for the former Westfield Meriden mall in a cash transaction last week that has city officials concerned.
The mall property is assessed at $52 million and appraised at $75 million, according to city records. The comparatively low sale price has led city officials to examine survey maps and documents in City Hall to see precisely what was included in the sale. They are hoping more documents are forthcoming.
“I was quite surprised to see those numbers,” said City Council Majority Leader David Lowell, who chairs the Economic Development, Housing and Zoning Committee. “For me, it raises suspicion because of the disparity. The outcome (on the city’s Grand List) is significant if they try to appeal their assessment based on that price. But it’s premature to judge it. We don’t have any documentation I’m aware of. I’m waiting on good faith information from both parties.”
Prior to the sale, Westfield Meriden was the city’s second-highest taxpayer, behind Eversource, and makes up 1.7 percent of the city’s total collected taxes.
Namdar representatives said they do not discuss acquisition prices, but want to work to improve the mall.
“The Meriden Mall is a centrally-located shopping destination, and we were excited by the property’s potential. We feel that the Meriden Mall is at a crossroads, and we have the experience and capabilities to bring the property into the next phase of its life cycle,” Elliot Nassim, of Mason Asset Management and Namdar Realty Group, said in a statement.
Nassim added that neither the vacant Sears nor Macy’s stores were included in the sale, but the company is “committed to working with both brands to suggest some of the concepts that have worked in these types of malls in the past,” the statement continued.
Mayor Kevin Scarpati said he has been in contact via email with representatives from Namdar and a meeting is imminent. He agrees with Lowell that the deal demands more scrutiny.
“I think we need to wait and see what all the documents show,” Scarpati said. “I’m excited for a change. It’s clear, Westfield has not invested in the Meriden mall for several years. We need a partner who is willing to invest. It can give us much needed growth and opportunity.”
The Westfield Meriden purchase is among seven Namdar made this year, bringing its total portfolio to more than 55 malls across the country, primarily in the Northeast, the Midwest and the South. Namdar has a strategy of purchasing average to lower performing malls and leasing them at low rents to maintain tenants, according to media reports.
Namdar also owns the Enfield Mall and recently won town approval to subdivide the struggling center to attract tenants. Company officials said they are currently working on a strategy to improve the Enfield mall and will reveal details when they are available.
City Councilor Daniel Brunet, who is also a member of the Economic Development, Housing and Zoning Committee, said the low sales price doesn’t necessarily trigger an appeal.
“I do not believe an appeal is imminent,” Brunet said. “There are several market forces that drive an actual sales price that are unrelated to the appraised value.”
City Economic Development Director Joe Feest said he had meetings with Westfield general manager Chris Powers, who reassured him the new owners were eager to invest.
“Regardless of the valuation, $12.5 million is still a significant investment in the property,” Feest said. “Hopefully new life will be brought into the mall. If you’re going to spend, you’ll rejuvenate it and make it succeed. Not relating it to the value, it’s a decent chunk of change. We’re hoping for good things.”
During a conversation with Feest prior to the sale, Powers indicated Namdar is a bigger player in the U.S. mall industry. Feest will be meeting with the owners and its management team — Mason Asset Management — to discuss future plans.
The transaction was recorded in city land records Monday, according to information in the City Clerk’s office. The Sears property transferred to an Illinois partnership, TF Meriden LLC, in March of last year.
The shopping center will be rebranded as the Meriden Mall.
Namdar, founded on Long Island, N.Y., in 1999, is a privately-held commercial real estate investment firm that owns and operates some 31 million square feet of commercial real estate throughout the U.S.
Westfield Meriden mall was struggling prior to the pandemic and state executive orders that forced it to close temporarily in March. Sears shuttered two years ago, and Macy’s closed just before the pandemic hit the region, proving that department stores were facing uphill battles, said John Clapp, a retired finance/real estate business professor at the University of Connecticut School of Business.
Clapp works with local governments to help malls adapt by changing zoning to high-density residential or entertainment and recreation. Most malls are in prime locations, near highways or transit centers.
He said the probability that Namdar would apply for a reduced tax assessment is “almost certain” and said he hopes state economic development officials “will do some planning for the large amount of vacant retail space in Connecticut.”
“This is a perfect time to develop policies for this type of problem,” he said.
The city has anticipated potential swings from retail to other uses at the mall property by implementing flexible zoning in its most recent Plan of Conservation and Development. Clapp said the city is moving in the right direction and Feest has expressed optimism about the mall’s potential to redefine itself.
“We would always love to see a restaurant, movie theater. A college could use it,” Feest said about the Macy’s closure in March. “It does open up other avenues because of the size.”