The developer of Destiny USA, a proposed $2.2 billion retail and entertainment center in Syracuse, N.Y., says that the project is on track to open in 2006 — and will rival Minnesota's mammoth Mall of America. But retail experts are questioning Destiny's viability: Pyramid Cos., the locally based mall owner behind Destiny, has yet to announce lease commitments with major retailers.
Pyramid, which announced plans for the project about two years ago, has visions of creating a replica of the Erie Canal in a 90-acre, glass-enclosed park, where shoppers would be ferried to the center's 400 stores. Visitors would also be able to choose from 30 restaurants, attend concerts at a 15,000-seat amphitheater and bring the kids to a saltwater aquarium and water park.
Amanda Nicholson, assistant professor of retail management and consumer studies at Syracuse University, notes that the recent poor performance of the retail sector, which reported flat holiday sales, will make it more difficult for the developers to line up lease commitments. “This is not an expansionary time for retailers,” she says. “The type of retailers Pyramid is trying to line up, like Nordstrom, are not exactly rushing to build stores right now.”
Still, Nicholson points out that the company has proven to be doggedly determined in the past and local real estate players point to the impressive track record of Robert Conger, Pyramid's general partner.
For example, Conger overcame 12 years of delays and local opposition to complete the 1.85 million sq. ft. Palisades Center Mall in West Nyack, N.Y., which opened in March 1998. “Bob Conger has got the means, the vision and the connections to get it done,” says Larry Socia of Pyramidin Syracuse, a firm not affiliated with the mall developer. “He's that kind of guy.”
While the local real estate community debates the feasibility of the project, Pyramid is simmering the project over a low flame. For now, Pyramid, which has already pushed back the projected completion date of the project from 2004 to 2006, is focusing its efforts on laying the legal and financial foundation for the.
The Syracuse Industrial Development Agency, a non-profit corporation created by the city to foster economic development, has agreed to issue tax-exempt bonds for the project so Pyramid can lower its borrowing costs. Pyramid plans to make the Destiny USA project an expansion of its Carousel Center, a popular regional shopping mall located south of Onondaga Lake. According to mall management, the 1.2 million sq. ft. center generates annual sales of about $400 per sq. ft, significantly higher than the national average of $316 per sq. ft.
Pyramid officials, who declined to comment on the project, have said that Destiny will become a tourist attraction comparable to the 4.5 million sq. ft. Mall of America in suburban Minneapolis. Mall of America, which opened in August 1992, attracts between 35 million and 42 million visitors annually and generates annual sales of approximately $890 million.