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McKinley Mall's financial problems could hurt taxpayers

Town of Hamburg/Frontier Central Schools worried
Posted at 1:17 PM, Jan 10, 2019

HAMBURG, N.Y. (WKBW) — Town of Hamburg Supervisor James Shaw tells 7 Eyewitness News that a bankruptcy court has placed the McKinley Mall into receivership.

Petitions have also been submitted in New York State Supreme Court to have the mall's aggregate assessment reduced from $55 million to approximately $15 million, said Shaw.

If that is approved, it would result in a substantial loss of tax revenue for both the Town of Hamburg and the Frontier Central School District.

Hamburg, Frontier Central Schools and Erie County are defending against the petition, but Supervisor Shaw said he expects to see some reduction in the assessment because the mall, like many mall's, has lost value now that more people shop online.

Supervisor Shaw is hoping to meet with the appointed receiver for the mall to discuss its future.

Shaw said there is good possibility that the mall will be put up for sale in 2019.

In an effort to take proactive steps against the loss of tax revenue and minimize the prospect of having to raise property taxes, Hamburg is now looking at selling some of its property, including an old train station on Scott Street and the former Blasdell Public library.

Shaw said Erie County Clerk Michael Kearns has been in contact with the new receiver about moving the Southtowns DMV office inside the mall to help increase pedestrian traffic.

Frontier Central Schools are also having to make adjustments for the future.

Superintendent Richard Hughes said the district will now begin putting money into reserve so there is a "cushion" should the mall's assessment be reduced by the court.

"The mall is our largest taxpayer," explained the superintendent.

The worst case scenario, said Superintendent Hughes, would be if the court ordered Hamburg and the Frontier School District to refund tax money that had been previously paid by the mall over the last few years.

Voters in the the Frontier School District will have to vote on a new proposed budget in May.

It is still unclear how the mall issue will impact the budget, said Hughes, because of unknown state funding variables.

However, Superintendent Hughes encourages families of the 48,000 children in the district to reach out to legislators to make sure Frontier Central Schools receive "fair funding" in light of the pending issue with the McKinley Mall.

McKinley Mall had been operated by Pennsylvania-based Stoltz management. The company said it had no comment on the receivership or the mall's future.

7 Eyewitness News Reporter Ed Reilly has more in the attached report.