UPDATED: Judge Stern Approves Paolino and Pyramid's $133 Million Bid for Providence Place Mall

UPDATED: Judge Stern Approves Paolino and Pyramid's $133 Million Bid for Providence Place Mall

 

 

As economic development director for the state of Rhode Island in the early 1990s, Joe Paolino was instrumental in the development of Providence Place Mall. It was a bold development — building a major upscale shopping center in the middle of a Northeast city.

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Now, 35 years later, the story has come full circle.

On Wednesday, Paolino was part of an investment group with Pyramid Group, which received a recommendation from the receiver, Mark Russo.

After a break, Superior Court Judge Brian Stern approved the recommendation.

The deal must be finalized and approved by the court sometime in the future.

The previous owner, Brookfield, had defaulted on more than $250 milllion of debt.

Paolino and Pyramid's bid was $133 million. Another bidder was $152 million.

Russo said the higher bidder (SR Capital) was not selected as it has not operated malls in the past. Pyramid has been one of the largest mall operators in the northeast over the past 50 years.

 

Providence Place Mall Helped Lead the Renaissance

When the Mall opened in 1999, the anchors were Filene’s, Lord and Taylor, and Nordstrom.

Now, it is a Macy’s and a Boscov’s

“My father-in-law was also instrumental in the revival of Providence, turning it into a retail and tourist destination.  He loved to tell me the story of how he and then-Mayor Buddy Cianci traveled to Seattle to try to persuade Nordstrom to open up shop in what was believed to be a dying New England city.   It worked.  Nordstrom now anchors the Providence Place development, which has attracted national retailers, upscale condominiums, and companies that have relocated to Providence because it has become very cool city,” wrote Dennis House, the late Sundlun’s son-in-law.

 

Recent Years — Store Closures and Receivership

In July, GoLocal exclusively reported:

KBRA, a global full-service rating agency, has announced they have downgraded the rating for Providence Place Mall due in part to what they say is notice that Macy's will close.

“KBRA downgrades the ratings of the six classes of PM certificates from DBUBS 2011-LC3, a CMBS conduit/fusion transaction. The PM classes are rake certificates that derive 100% of their cash flow from the non-pooled components of the Providence Place Mall loan,” said the rating agency.

Further, KBRA reports, “The mall is currently anchored by Macy’s (non-collateral), Boscov’s (19.4% of collateral sf), which backfilled the former Nordstrom anchor space in October 2019, and Providence Place Cinemas 16 & IMAX (9.8%). According to the servicer, the borrower has indicated that the non-collateral Macy’s is on the list of locations planned for closure.

Roy Chun of KBRA confirmed the report with GoLocal. 

Then, on Halloween Day, 2024, Providence Place Mall was placed into receivership.

Since then, Providence Place has suffered through a series of store closures and some wins. It was able to replace the movie theatre vendor with a local company.

A critical step in stabilizing the property.

STORY UPDATED at 12:24 PM