Cordish acquires N.Y. shops Company pays $40 million for discount complex

November 15, 1995|By Kevin L. McQuaid | Kevin L. McQuaid,SUN STAFF

The Cordish Co., continuing its push into value-oriented retail projects, has invested $40 million to acquire a Long Island, N.Y., shopping center.

The 500,000-square-foot Islandia Shopping Center marks the Baltimore development firm's second discount retail project this year, after the opening of a $10 million factory outlet center in Ocean City in September.

"This is an extension of what we see largely as the future of the company, because this is what customers want," said David S. Cordish, the firm's chairman.

"It's one of the most successful and attractive power centers in the United States. The sales are phenomenal, the architecture is off the charts, and it has a great location," he said.

The 5-year-old center, fully occupied by T. J. Maxx, Gap-owned Old Navy, supermarket chain Finast, home improvement store Pergament and others, generates sales of about $150 million annually. Mr. Cordish said the firm expects a 15 percent return on its investment annually.

The Cordish Co. bought the center from the Chase Manhattan Bank, which had seized it from Polimeni Enterprises after the Long Island developer defaulted on its roughly $80 million loan.

The acquisition was financed by Donaldson, Lufkin & Jenrette. The New York investment house intends to convert the commercial real estate loan to securities for sale to the public.

"From the lender's perspective, this is a secure and institutional quality project," said Blake L. Cordish, the company's vice president of development.

The Islandia project marks Cordish's second involvement with Polimeni. In January 1994, Cordish took control of Polimeni's Tollgate Mall in Bel Air and invested $23 million to transform the languishing project into a 440,000-square-foot power center with tenants such as T. J. Maxx and Staples.

The company also plans to expand the Islandia project by roughly 100,000 square feet beginning early next year, after negotiating with the local government to trade rights for a future office tower for added retail space. The firm is negotiating with Homeplace and other discount tenants.

In addition to Long Island, Cordish is working on a $50 million entertainment complex in Houston; a $20 million upgrade to the Park Plaza hotel in New Haven, Conn.; and is one of three candidates to redevelop the derelict Power Plant on Pier 5 downtown.

Under Mr. Cordish's plan, the Power Plant would undergo an $18 million renovation and be converted to an urban entertainment center complete with restaurants, shopping and nightclubs. The company has redeveloped similar projects in Niagara Falls, N.Y.; Charleston, S.C.; and Salt Lake City.

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