That Mall is sick and that Store is dead!

February 9, 2006

From a big-box mall to a ‘town center’

Filed under: "coliseum mall" — Anita @ 12:01 am

From a big-box mall to a ‘town center’

Hampton officials and the owners of the Coliseum Mall are planning its transformation.

BY PATRICK LYNCH AND KIMBALL PAYNE
247-4534

February 8 2006

HAMPTON — Hampton officials and the owners of Coliseum Mall are nearing a deal that would transform the 33-year-old indoor mall into a “town center” with city blocks, park space and multistory buildings with offices, apartments and retailers.

Facing years of sharply declining sales, a bleak future for traditional enclosed malls and stiff competition from newer retail centers, New York-based Mall Properties wants to pursue the town-center concept first laid out in a 2004 master plan commissioned by the city, said Howard S. Struletz, the company’s vice president.

Plans for potentially more than $200 million in changes – with $65.5 million generated through special taxes on the new center – would build an outdoor shopping district similar to those that have emerged across the country to compete with indoor malls. Public squares and street-level parking combined with restaurants, stores and apartments would convert the boxy mall and sea of asphalt into several city blocks that the developers are calling the Peninsula Town Center.

“If the city hadn’t come to us we would have gone in a different direction. I don’t think we would have instigated something this dramatic,” Struletz said. “We want to get to what it was when it opened in 1973 – the place to be. This is a very big vision. But it’s a very doable vision.”

Mall Properties and Hampton officials have not reached an agreement on how the development would take place and how it would be paid for. But getting to that point hinges on a City Council vote scheduled for tonight.

Council members will vote on whether to create a Community Development Authority that could sell bonds and set special taxes in the mall area to help pay for an expected $65 million in costs for land, public spaces, parking garages and roads. Early in 2005, mall officials said the redevelopment would cost about $200 million, but with the final details still in the works, Mall Properties would not confirm if that number still stands.

In the past, the City Council typically signed off on a broad agreement and then left the specifics to staff, according to Councilman Randy Gilliland. He said that this time around the most important vote would come when council signs off on a detailed contract with Mall Properties and the Community Development Authority. “We’re going to say grace over the development agreement – deal point by deal point,” Gilliland said. “We’re being a lot more hands-on … there basically will not be any public money.”

The Community Development Authority would be a City Council-created entity, but the city would not be responsible for the debt created by the bond sale. The authority would pay off the debt by setting special real estate and property taxes on tenants within the redevelopment district – essentially, the current 76-acre mall property. City officials could also agree to dedicate a percentage of sales, meals and amusement taxes generated in the mall district toward the debt. But the details of that proposed tax structure have not been made public.

Several City Council members expressed tempered support for the deal. “Business is a cash cow, but you’ve got to invest in infrastructure,” Councilman Rhet Tignor said. He said the deal would not resemble the city’s $24 million investment in the Power Plant. “It’s a very different animal for the city.”

The mall’s sales and vacancy numbers in recent years pointed toward the need for changes.

More than 40 percent of the mall’s retail space stands vacant today. Attempts to lure stores such as Kohl’s, Best Buy and Stein Mart to the vacancy left by Dillard’s closing all failed. More than 100 tenants have left over the past five or six years, and only half have been replaced. As for overall sales, they’ve dropped from just under $140 million in 1999 to about $112 million in 2004, according to data from Mall Properties and the city’s Commissioner of the Revenue office.

“You’re talking about the city of Hampton’s largest taxpayer,” Hampton Economic Development Director Jimmy Eason said. “We’ve got to pay attention to that.”

Struletz said Mall Properties wants to begin construction work this summer and open the new center for business by the fall of 2008. The construction plan also remains up in the air, but will require shutting down large sections of the mall at a time. Based on current plans, the only buildings that will be part of the new development would be the Hecht’s, soon to become a Macy’s, and three restaurants along Coliseum Drive – Outback Steakhouse, Bennigan’s and Steak and Ale.

Store owners and tenants at Coliseum Mall are aware of the pending changes, but few know any details. Struletz said he has spoken to tenants, but only in general terms.

Dan Kelleher, executive director of the Coliseum Central Business Improvement District, said retail owners in the district “resoundingly support” the concept of redeveloping the mall.

Copyright © 2006, Daily Press

(first article about it from 2005)

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