By Owen Pfeiffer
TOWN OF NIAGARA — The mortgage on Fashion Outlets of Niagara Falls USA reached its maturity date this month without being paid off. The roughly $74 million loan has gone back to a special servicer, putting the future financing of one of Niagara County’s largest retail properties in the hands of a bond-trust workout team.
The $73.99 million loan has moved to special servicing with Midland Loan Services, Commercial Real Estate Direct reported on Oct. 15. It is the last loan left in COMM 2010-C1, a commercial mortgage-backed securities trust issued in 2010. The trigger was maturity: the loan came due and is still outstanding, CRE 360 Signal noted in summarizing that report. The trust has had no losses to date, according to the reports. Because it is the last loan in the pool, how this one is resolved will decide the trust’s final result.
Buffalo Business First reported on Sept. 30 that the mall faced a $74 million loan deadline.
The loan
The mall’s owner, California-based Macerich Co. (NYSE: MAC), lists the debt in its quarterly filings with the Securities and Exchange Commission. In its most recent quarterly report, Macerich listed the Fashion Outlets of Niagara Falls USA mortgage at $75.2 million, with an effective interest rate of 6.52% and monthly debt service of about $727,000. A supplemental filing listed the maturity as Oct. 6, 2026, and the center at 685,000 square feet.
This is not the loan’s first stay in special servicing. It was transferred in November 2023, Commercial Real Estate Direct reported at the time. In May 2024, Macerich negotiated another three-year term extension. The new transfer gives the special servicer several options: another extension, a modification, a payoff through refinancing or sale, or, if no deal is reached, enforcement. No outcome has been announced.
The county’s tax deal
The maturity follows a property-tax agreement the Niagara County Industrial Development Agency approved on June 17. Agency documents show two 10-year scheduled tax agreements, one for Macerich Niagara LLC and one for Fashion Outlets II LLC, both at 1900 Military Road. Under the board packet for that meeting, the owners pay a combined $350,000 a year in host-community payments to the Town of Niagara and $600,000 a year in tax payments rising 2% annually. The agency’s cost-benefit worksheets put the combined property-tax exemption at about $17.2 million over 10 years, or about $15.4 million in present value.
The packet says that “mall occupancy has steadily declined since 2019, with more than one-third of existing leases scheduled to expire within the current year,” and that the property’s assessed value “has decreased by approximately $82 million since 2010.” The two applications list 778 current jobs in Niagara County. The Niagara Gazette covered the approval, and WBEN reported the $15.4 million savings figure.
“We didn’t want another Bethlehem Steel on our hands,” Jason Krempa, the agency’s chairman, told WBEN after the vote.
At a May 13 meeting, Kevin Clyne, an attorney for Macerich, told the agency’s directors, “This deal is imperative for the stability and survival of the mall,” WBEN reported. Mr. Clyne said, “We are looking at short term survival.”
“They are an anchor,” Andrea Klyczek, the agency’s executive director, told WBEN. “They are an employer who is very important to the community,” said Mark Gabriele, the agency’s counsel.
Fewer shoppers from Canada
The mall was built to draw shoppers from across the border. Canadians made up more than 65% of its customers as recently as 2019, according to documents Macerich gave the agency, as reported by WBEN. The station has reported that the mall’s traffic has fallen sharply since early 2025, which it tied to a drop in Canadian visits during the trade dispute between Washington and Ottawa, as well as the pandemic, a weak Canadian dollar, online shopping and competition from an outlet center in Niagara-on-the-Lake, Ont.
The Trump administration has said its tariffs on Canadian goods respond to what the White House called a national emergency over illegal immigration and fentanyl crossing U.S. borders, and to long-standing trade imbalances. The Buffalo Chronicle has asked the White House for comment on the effect of the cross-border slowdown on border-region retailers. This article will be updated with any response.
The center has also added tenants, including the first U.S. location of the Canadian retailer Urban Planet, according to WBEN.
What to watch
Macerich is scheduled to report third-quarter results on Nov. 4. That filing may show whether the company has reached terms with the servicer. The Chronicle has asked Macerich and the Niagara County Industrial Development Agency about the status of the loan and whether the tax agreement depends on a refinancing. This article will be updated with their responses.
Leave a Reply