ITHACA, N.Y.—The Shops at Ithaca Mall has been struggling with high vacancies for years. Cayuga Health is ready to give business activity at the mall a healthy shot in the arm with the purchase of two storefronts for a long-term, multi-use operation.
In a public event scheduled for later this morning, Cayuga Health, which operates Cayuga Medical Center and associated regional medical offices, is set to announce renovation plans to create a multi-use operation to be based out of the Ithaca Mall. The plan comprises about 108,000 square feet in the former Sears, BonTon, and a couple of smaller interior corridor storefronts.
The Sears and BonTon spaces were purchased outright for about $8.5 million in two transactions last week, while about 9,000 square feet of interior corridor storefront space will be leased on a 25-year term with an executable option for a second 25-year term.
“We engaged some consultative analyses of what would the costs of square footage be built-out, and we calculated it would be an efficiency over time if we were to consolidate certain operations that currently exist scattered throughout our community, and to locate them at the mall. Operationally and in raw price per square footage, there will be efficiencies. So it’s better operations, convenient parking, supporting businesses at the mall, we felt it was a win-win-win,” said Dr. Martin Stallone, President and CEO of Cayuga Health System.
The story of the Ithaca Mall at 40 Catherwood Road in the village of Lansing is like many in the nation. As shopping trends have moved online and towards the latest and greatest lifestyle centers, mid-sized regional indoor malls like the Ithaca Mall, which was built in the mid-1970s, have gone the way of disco and bellbottoms. They’re no longer popular as retail destinations, and fighting to stay financially afloat as their tenants closed up or went elsewhere.
Namdar Realty, which acquired the mall in 2017, has made a concerted effort to shore up the Ithaca Mall’s finances by putting larger retail spaces like end-caps up for sale, and creating agreements to pay for upkeep of common spaces and help support the smaller retail spaces that line the interior corridors. The results have been mixed at best, and the mall continues to be plagued with high vacancy rates.
According to Stallone, it was the pandemic that first drew Cayuga Health’s interest in the mall property.
“Effectively, we started a relationship with the mall at the beginning of COVID,” he said. “We shut down our building at Craft Road and made a smaller-scale drive-thru sampling testing site that would have grown up to 300 individuals a day. It was not ideal for what we needed to do as a community. We looked around and realized that the mall, which was underutilized, provided the perfect location for our testing operations. Later, it would provide an excellent location for our vaccine operations.”
“In both instances we worked with the mall owner through (Property Manager) Gina Speno, and they orchestrated a lease to use that location, and we have continued to dialog with them since then,” Stallone continued. “We found it was very easy and effective to ask people to go to the mall to receive services. We found that the parking was convenient, it provided for flexible operations, the presence of a food court was helpful. We saw the response of small businesses in the mall to our presence, and that was meaningful to us.”
The plan is for a multi-phase renovation of the former retail spaces to accommodate Cayuga Health’s existing needs and planned future expansion. In the first phase, which will largely be located in the 54,000 square-foot former BonTon space, there will be a shifting and expansion of existing Cayuga Health medical practices, administrative offices, and the provision of rentable space to related vendors. The exact mix of practices to be contained in the renovated space is still being determined.
A second phase planned for the site calls for an expansion of Cayuga Health’s business, into healthcare education and training.
“The third arm of what we wanted to accomplish was a place where we could be more serious about professions training,” Stallone said. “If you’re keeping up with what the governor’s priorities are, you’ve heard an acknowledgment that there is a workforce crisis in health care, that health systems like ours are going to need to face. While it is true that Tompkins County is rich with education capabilities and resources, we feel strongly about or ability to provide real-life learning labs. With this space, we can provide what we’re terming ‘a health professions learning center’. We have a grant submitted to NYS for this purpose, and there’s a substantial amount of the space in Sears that we envision will be for that purpose.”
In terms of economic benefits, there’s the obvious reuse of space in a mall suffering from high vacancy, and the stable, long-term foot traffic that provides to retail neighbors large and small. Stallone added that a “three-digit number” of personnel would be operating out of the new location, some of which will be new jobs, as well a construction jobs with the renovation, and if the health professions training center is successful, that too would be a driver of job growth. Cayuga Health will be partnering with the neighboring YMCA to provide childcare services for staff and potentially childcare services training, and is seeking partners to collaborate on behavioral and psychological services on-site.
This is largely an interior renovation and the footprints and roof height of the mall will not be altered. Interior design work for the renovation is being handled by Ithaca’s HOLT Architects, a frequent partner in Cayuga Health’s interior renovations and new construction projects. Stallone was hesitant to give an exact timeline on the process, though noted the first phase is further along in planning. The project will need to go through the planning board of the village of Lansing and go through the construction bidding process, and will take about a year. The second phase with the training center is more flexible and partly depends on potential state grant funding. Costs for both phases have yet to be finalized, though Stallone emphasized that it was economically advantageous to them on a cost-per-square foot basis.
For the record, Cayuga Health intends to hold onto its space at 1020 Craft Road, as well as its recently-completed facility at Community Corners in Cayuga Heights, though there may be some movement in which specialty medical practices are operating out of each location.
So let’s summarize. Cayuga Health is maintaining existing facilities while pursuing plans to occupy portions of the Shops at Ithaca Mall in a multi-phased approach first focusing on reutilizing the BonTon space to serve a range of operations related to Cayuga Health. A second phase is exploring and potentially pursuing a workforce training center dedicated to professions that Cayuga Health relies on for its personnel. Cayuga Health has spent $8.5 million to acquire 108,000 square feet of space to serve those goals, and is consolidating some practices and planning to add a substantial number of jobs as it grows into the space.
For a mall that was the subject of much concern about its future in the Tompkins County community, it’s a welcome piece of news. The village of Lansing may also breathe some sigh of relief that the mall will be at much lower risk of going out of business, though there may be some tax-exempt entities in some of the space, so how much it will pay in property taxes in the future is not yet clear.
In the meanwhile, however, it’s a positive sign and a vote of faith in the mall’s location and space; in an era where malls are increasingly reused for purposes other than retail, Cayuga Health is willing to put its money down and show an example of how the Ithaca Mall can still serve the community beyond shops and stores.
“To round it out, it’s an effective use of space, it’s convenient for patients in a way that supports retail at the mall, really preventing the mall from becoming a blight and falling into disrepair, and dually uses space in a flexible way to accomplish workforce redesign and redevelopment,” said Stallone. “We’re excited about this; we think any one of these reasons is positive for the community, and all of them together makes this a real home run.”