Lowville P&C's situation complicated

LOWVILLE — Lewis County economic development officials hope the possible foreclosure of Lowville Plaza won't hinder the sale of the P&C store there.

"Those two things happening at the same time might make a confusing situation," Eric J. Virkler, the county's director of economic development, told legislators Tuesday.

Bank of America in August began foreclosure proceedings on the South State Street plaza in state Supreme Court, according to filings in the county clerk's office.

The shopping center is operated by Gibraltar Management Co., Tarrytown, through an agreement with landowners Richard C. Cummings and James L. and Dorothy W. Duflo.

Chase Manhattan Bank, whose assets are now held by Bank of America, in 1996 lent $1,825,000 to GBR Lowville LLC, a subsidiary of Gibraltar, according to legal filings. GBR has failed to make any mortgage payments since October 2008 and owes nearly $1.4 million in principal and more than $300,000 in interest and assessments, the lawsuit claims.

Judge Joseph D. McGuire in October appointed a receiver to handle daily operations of the plaza during the foreclosure process.

That process, expected to take at least three or four more months, should result in the plaza's being sold to the highest bidder or reclaimed by the bank, which then would try to sell it outright, Mr. Virkler said.

Meanwhile, Syracuse-based Penn Traffic Co., which operates 79 stores, including the Lowville P&C, last month entered its third bankruptcy proceeding in 10 years and announced plans to sell its assets.

Price Chopper, a grocery chain headquartered in Schenectady, has submitted a formal bid of $54 million for 22 Penn Traffic stores, but that offer does not include P&C stores in Lowville, Watertown or Ogdensburg. A bid of $36.5 million for all of Penn Traffic's assets has been entered by a group of four companies specializing in liquidation.

According to an article in the Buffalo News, Buffalo-based Tops Markets submitted a bid to Penn Traffic of more than $90 million to purchase all 79 stores, but no offer has been filed yet with the Bankruptcy Court.

While the original deadline for bid submissions has passed, U.S. Sen. Charles E. Schumer announced Monday that the deadline has been extended through at least Jan. 20 by GE Capital, Penn Traffic's largest lender.

Along with the plaza foreclosure, Price Chopper's lack of interest in the Lowville location appears to stem from the presence of a Walmart Supercenter here, Mr. Virkler said.

However, P&C does hold a "favorable lease" at the plaza that should be honored by a new owner, and other food chains might enter the picture by the bid deadline, he said.

"I'd say this is a changing story on a daily basis," Mr. Virkler said.

Ned E. Cole, executive director of the Lewis County Industrial Development Agency, said he's been in contact with six companies that have expressed some interest in the store and other north country P&C locations. He declined to identify them, saying any such announcement should be made by the companies.

The foreclosure proceedings at Lowville Plaza don't "appear to be a stumbling block" to at least a couple of prospective tenants, Mr. Cole said.

Mr. Cole, a past Key Bank executive, said he would expect most companies to wait until the last minute to enter formal bids on Penn Traffic stores to try to prevent competitors from outbidding them. "That is just good business," he said.

Lowville Plaza, which was built in 1979, now includes only the P&C store and a Community Bank outlet as tenants.

McDonald's and Kinney Drugs moved out of the plaza into nearby free-standing buildings in October 2001 and September 2002, respectively. The southern end of the main building was vacated in October 2002 when all Ames Department Stores closed.

A change in plaza ownership should be good, as long as the new owner tries to fix it up and attract new tenants, Mr. Virkler said.

County and town officials earlier this year considered submitting a grant application through the Restore NY program on Gibraltar's behalf to assist with renovation work, but the company declined the offer.