Plans to transform underperforming Burlington mall
January 24, 2015
Over the next two to three months, officials in Burlington Township will be getting architectural and civil engineering drawings of what the new Marketplace at Burlington - formerly Burlington Center Mall - will look like, as well as a count of the traffic it is hoped it will generate.
By mid-spring of next year, owner Moonbeam Capital Investments L.L.C. of Las Vegas says, groundbreaking will begin to convert the underperforming mall into a must-see destination off Exit 47A of I-295 for shopping, dining, and entertainment.
If all goes as planned, the $230 million-plus phased conversion will also include manicured green spaces with benches and fountains that seamlessly tie a traditional mall with an open-air town center.
The full build-out is expected to take from two to three years and will be done in stages. The mall will stay open the entire time.
Moonbeam chief executive officer Steven Maksin first unveiled the vision for the center last April. He described it as "one of the largest and most exciting projects on the East Coast, and the most successful."
Sixteen new tenants and seven restaurants are negotiating letters of intent to become part of the reincarnated mall, Shawl Pryor, senior vice president and director of real estate for Moonbeam, said this week.
"We had a lot of interest from nontraditional enclosed-mall tenants - those typically found in power strip malls or lifestyle centers," he said. "We are creating a hybrid concept with some of those tenants, and tying them in with enclosed mall tenants."
Pryor said site work on the outer parcels for the restaurants could begin in late summer.
The hybrid mall will also feature a restaurant-entertainment venue. Pryor said more details would be forthcoming in the months ahead. He joked that one thing it won't have is a Dave & Buster's.
"What we're trying to do is re-create the Burlington mall concept once again as a family destination," Pryor said. "We don't want to build just a retail destination. We want to make sure we create a place to shop, have fun, sit down and have dinner with your family, or enjoy one of the themed restaurants."
Maksin, a mall turnaround specialist, said he saw opportunity where others saw failure.
"Many people would have looked at Burlington Center Mall and saw it as a mall that was on a downward spiral," he said during a conference call on Friday. "Moonbeam Capital Investments looked at Burlington Center Mall and saw it for its future potential, with it being centrally located with strong household income and demographics.
"Redeveloping a mall is not for the faint of heart," Maksin said. "Although we have encountered some small obstacles, Moonbeam understands that it is a process. The shopper is not looking for the same old mall."
Moonbeam, a private equity fund that has no debt, goes after failing malls, pumps money into them, and waits for a nice return on investment.
Among its recent acquisitions are Gwinnett Place Mall in Duluth, Ga.; Century III mall near Pittsburgh; Shoppingtown Mall in Syracuse, N.Y.; and the Cortana Mall in Baton Rouge, La. In addition to nine malls, the company owns 14 strip centers, including the Shops at Pennsville Center in Pennsville, Salem County.
Pryor said Moonbeam recently won rights to acquire the space where the Burlington mall's former JCPenney store was. The anchor closed in early May because of weak sales.
"With control of the JCPenney property, it gives us more opportunity to expand the development," Pryor said. "It allows us to re-tenant or repurpose the building, and offers a set of options on how we could utilize the land and the building."
Moonbeam is working with Peter Hovnanian of J.S. Hovnanian & Sons of Mount Laurel and developer Patrick G. Heller of Diamond Real Estate Investments L.L.C. of Limerick, Montgomery County, on the project.
Pryor said he liked what he heard at the International Council of Shopping Centers conference in New York last month, where Moonbeam shared renderings.
"The project was very well-received among the retailers and restaurants," he said.
The revived mall will total over 1.2 million square feet. Pryor said one phase will be to explore a nonretail use for the site "that could be a job generator for the area." The idea is still being reviewed by Moonbeam.
Another phase is to incorporate wetlands to make the site more environment-friendly. Moonbeam has 150 acres in addition to 50 acres of "green space" to work with.
"We're looking at areas that have wetlands," Pryor said. "We're more intuitive to the project than when we first started, and realize we can't build on certain open areas like the wetlands."
The two-level mall, which opened on Aug. 5, 1982, has struggled for years. On a recent walk-through, swaths sat dark and empty, while shoppers were few.
The mall has a vacancy rate of 57 percent, far surpassing the national average for U.S. malls of just over 8 percent. It has only one anchor store, Sears, after JCPenney and Macy's closed.
With the lack of foot traffic, the mall began closing at 8 p.m. Monday through Thursday in 2013, while all other malls in the region close at 9 p.m. those days.
On the upside, the mall sits near I-295, the New Jersey Turnpike (Exit 5), and Route 541. and has great demographics (average household income is $82,833 within a three-mile radius. Last year 75,000 cars traveled I-295 per day, 81,000 traveled the New Jersey Turnpike, and 33,000 cars traveled Route 541, according to the mall's website.
Maksin, who liked all those numbers, bought the mall for $4.4 million in late 2012. The price - dirt-cheap by industry standards - was largely due to the mall's fallen value as tenants and shoppers bailed. It had an assessed value of $29.3 million in 1991, and $13.5 million last year.
"We realize the importance of this project, not just to the community, but also to the township and the state of New Jersey," Maksin said. "We will remain committed to seeing it through till the end. Our vision is to create a renaissance project that will offer a variety of amenities."
Maksin said Heller and Peter Hovnanian approached him in 2012 as he was securing financing to buy the mall, to form a partnership to resurrect it.
There were 1,100 malls in the United States prior to the recession, which started in 2008. Since 2010, more than two dozen enclosed malls have closed, and an additional 60 are on the brink, according to Green Street Advisors, which tracks the mall industry.
Still, 14 national retailers, including Kay Jewelers and T-Mobile, have stayed on at Burlington to be part of its revitalization.
"We're looking forward to it," said Jasur Kirdizbaev, 29, manager of Kay Jewelers, on another slow Friday night. "Everyone is trying to get their business up."
Parmley, S. (2015, January 24). Plans to Transform Underperforming Burlington Mall. Philadelphia Inquiry (January 26, 2015). http://www.philly.com/philly/news/20150124_Plans_to_transform_underperforming_Burlington_mall.html