SJ mall's renovation delayed

Boarded-up storefronts line both levels of the ailing Burlington County mall now called the Marketplace at Burlington.

Plans to revive it were supposed to start in "early 2016," by owner Moonbeam Capital Investments L.L.C., of Las Vegas, which bought the mall two years ago with plans for a three-phase, $230 million turnaround of the former Burlington Center.

But those plans have been delayed until at least fall of this year, said Moonbeam's director of real estate, Shawl Pryor. He cited complicated lease agreements as the main reason.

The mall is a case study in the perils and potential windfalls of turning around an ailing center.

"This is a very large and complex project for us, and it's taking us longer to negotiate leases with current tenants and relocating them to new developments," Pryor said this week. "This is a very fluid situation."

The Burlington Township mall sits just off Exit 47A on I-295. It has ideal demographics for any developer: lots of traffic, high household income, and high population concentration.

That's what got Moonbeam's attention in spring 2014. The firm, under CEO Steven Maksin,buys distressed malls all over the country, pays dirt-cheap prices for them, and pumps a lot of money to make them profitable again. It has similar projects in Colorado (Greeley Mall) and Pittsburgh (Century 3 Mall).

With Burlington mall, Maksin paid all cash - $4.4 million. At the time of purchase, the mall was already bleeding tenants and had a 45 percent occupancy rate. (A healthy mall has a 90 percent or more occupancy.) Two of its three anchors - Macy's and JC Penney - closed, leaving only Sears.

Moonbeam was touting its plans and eagerness to bring shovel to ground early this year as recently as August. "Unfortunately, we have to push back until mid-2016 or early 2017," Pryor said Wednesday.

Pryor said that negotiating "REAs" - reciprocal easement agreements, such one with Sears, the sole anchor - has been particularly tough. He said Sears controls significant mall space and still has rights of approval on any expansion and redevelopment plan by Moonbeam.

"We are still actively engaged with Sears," Pryor said. "It's coming along."

On a more positive note, he said Moonbeam secured a national hotel chain to build a four- to six-floor hotel on four acres "along the lines of a Hilton or Marriott" last November. It is in the final negotiations with national restaurant chains that will be part of the first phase of redevelopment estimated to cost $40 million.

Pryor said confidentiality agreements prevented him from identifying any of the restaurateurs or national retailers that have signed on, but "we will release their names when they notify us it's OK," he said.

"I can say that shoppers will have over 125,000 square feet of apparel, shoe and accessories," Pryor said. "They will have nine national restaurant chains," along with a fitness center, occupying 15,000 to 45,000 square feet.

Pryor said his team had been studying malls nationally and regionally for ideas. He said he likes the retail and restaurant layout at Cherry Hill Mall.

Among Moonbeam's portfolio, he said the Burlington project was the firm's biggest underway because of the amount of "de-malling" - a growing national trend among sub-performing malls. It includes adding features, such as open spaces, new entrances, and restaurants to an enclosed mall. It's part retooling and part deconstruction.

Moonbeam's vision for the Marketplace at Burlington is a combined outdoor-indoor mall with lots of green space in between.

Experts say malls have traditionally held significant roles in their communities, and that's why the death of one can be crushing, both socially and economically.

"Unlike grocery stores, which meet basic human needs like food and drink, shopping centers have come to meet higher, and in some ways, more valuable, human needs," said James Cook, Americas director of retail at Jones Lang LaSalle. "They feed our deeper longings for social connection, personal status and family togetherness."

According to the International Council of Shopping Centers, each shopping center in New Jersey creates on average 145 jobs. They also provide hundreds of millions annually in local property and state sales taxes, according to the ICSC.

"I hope it comes back for the community," said commercial pilot Kyle Minarik, 40, of Burlington Township. "It's not good to have all of this space and nothing here. You can't go to a mall that has no stores."

Minarik was leaving Kay Jewelers, among the few national retailers still at the mall, after buying a Valentine's Day gift for his girlfriend.

Pryor said he wants to reassure Burlington County and the township that the project was moving forward.

"The difference between us and the previous owners of the property is that we truly own the property, so we are leveraged," he said. "We don't have a lender holding our hand.

"We don't have the flexibility and latitude to not make this work," he said.

Moonbeam had to terminate a number of leases to start over again - and that was obvious at the virtually empty mall Thursday. Only about a half-dozen small retailers had lights on and were operating.

"I've been hearing the same thing for the last year, but nothing yet," said Dontrel Swinson, 28, who worked the cash register of Moot's Kitchen on Thursday, one of three remaining food court operators. The mall used to have a dozen eateries.

"The ones who have stayed keep asking me 'when is it going to start?' " Sharma Muskan, 27, owner of Muskan Eyebrow Threading across from Kay Jewelers on the first floor, said of the mall's overhaul.

"I tell them, 'soon.' "

Source: Philly.com