After an 18-year struggle to build an upscale mall on the 39-acre former Cerro Wire property in Syosset, Taubman Centers has thrown in the towel and sold the land to rival mall developer Simon Property Group.
The sale is part of a larger deal that also has Taubman giving up its 50 percent interest in the Arizona Mills mall in Tempe, Ariz., to Simon.
Simon paid Taubman $60 million in cash and 555,150 partnership units in Simon Property Group Limited Partnership.
As part of the sale, Taubman will be relieved of its $84 million share of the current $167 million mortgage loan on Arizona Mills, bringing the transaction’s total value to $230 million.
“Despite our best efforts and continuing enthusiasm for the opportunity, it became apparent that we were not going to be able to move forward anytime soon in Syosset with development of The Mall at Oyster Bay,” said Robert S. Taubman, chairman, president and CEO of Taubman Centers. “Given the excellent progress we are making with a number of other properties in our development pipeline, we are pleased to be able to redirect our resources at this time.”
The 39-acre parcel will give Indianapolis-based Simon control of about 93 acres in Syosset, after its controversial $32.5 million purchase last year of 54 adjacent acres sold to the mall developer by the Town of Oyster Bay.
For that acquisition, Simon headed a group that included Castagna Realty in Manhasset and Garden City-based Albanese Organization, and those partners may also be part of this newest purchase.
Taubman had spent in the neighborhood of $160 million on the former Cerro Wire land and its quest to build a mall on the site. Stiff community opposition funded by rival Simon never let the Michigan-based Taubman get town approvals for the project.
Its not yet known what plans the Simon-led group has for its massive Syosset holdings, though the company will be issuing a statement later today.
“This has been a long regional nightmare,” said Desmond Ryan, executive director for the Association for a Better Long Island. “People have met, fallen in love, married, had children and sent them off to college since this site was first proposed for redevelopment. The question now is will a company known for building retail malls be allowed to build on this property for the purpose of creating jobs, investment and new tax revenue that will benefit the town and our region. If this is merely the first act of a second saga then the tragedy of so much lost time will be elevated to catastrophe.”
Arizona Mills, which opened in 1997, was developed in partnership by Taubman, The Mills Corp. and Simon. The deal now gives Simon 100 percent ownership of that mall.