Rebirth for Regency Square Mall? Nearly vacant retail center under contract
Posted by Carlos Renteria on
There could be new life for an old mall and a new beat in the heart of Arlington’s retail center.
Regency Square Mall, developed a half-century ago to fanfare as the largest regional enclosed mall, could be redeveloped.
Commercial real estate developer Rimrock Devlin said it has a contract to buy the 53-year-old largely vacant Regency Square Mall and redevelop the 77.11-acre property into mixed uses.
It’s not a done deal, but it’s on the table.
“We believe the redevelopment of The Regency Square Mall will not only have a significant economic impact on the local and surrounding communities, but also create a unique social impact coupled with new job creation, among other benefits generated with this project,” said a statement from Rurmell Mcgee, Rimrock Devlin vice president of retail development.
Jacksonville-based Rimrock Devlin said the property, at 9501 Arlington Expressway, could serve multiple uses.
Those include medical services, limited service hospitality, fulfillment centers, multifamily space, charter schools, banks, a convenience store, restaurants and retail, the Jacksonville-based developer said in a statement.
Rimrock Devlin declined to disclose the contract price or estimate when the sale could be completed.
“Rimrock Devlin is still early in the due diligence of this project as a property of this size incorporates various challenges,” said the statement.
It said there are active leases in place, easements and other encumbrances that will “ultimately dictate the potential of a redeveloped property.”
The developer said it looked forward to working with the city, elected officials and others on the project.
Rimrock Devlin did not say how the property would be repositioned or if parts of the mall would be demolished for redevelopment.
Duval County records show the property is assessed at $6 million for tax purposes.
Regency Realty LLC, a partnership of Mason Asset Management and Namdar Realty Group LLC, both based in Great Neck, New York, paid $13 million for the mall Feb. 14, 2014.
That purchase included the AMC Theatres property and the Belk store. Regency Realty has since sold both.
The purchase did not include the Dillard’s or Sears properties, which remain separately owned.
Ownership consolidated retailers into the east wing of the mall, which is at 30% occupancy, including the closing J.C. Penney Co. Inc. department store.
Another tenant wanted the west wing, but didn’t open and that deal ended up in litigation.
Seeing opportunity
Rimrock Devlin said mall properties throughout the U.S. are experiencing declines in traffic as consumer purchasing habits changed over the past decade.
It said that created redevelopment opportunities because many mall properties are “in the heart of densely populated retail corridors where people live, work and play.”
Rimrock Devlin called the Regency Square Mall site “a perfect representation of this and unique in its positioning within the Jacksonville market.”
“It’s not often that you find a 70-plus acre tract of land in the heart of a community surrounded by rooftops, local businesses and national brands with frontage on a main thoroughfare encompassing over 100,000 passing cars each day,” it said.
Rimrock Devlin said the mall is central in the Jacksonville market because it is a 15-minute drive to Jacksonville International Airport and the Beaches, not far from Downtown and 10 minutes from St. Johns Town Center.
Property records indicate the mall property under contract comprises at least 960,000 square feet of space in the east and west wings. Mcgee said Rimrock Devlin would buy 77.11 acres.
Rimrock Devlin is a commercial real estate development services firm led by Micah Linton and Wallace Devlin.
Rimrock Devlin has developed residential and retail projects in Northeast Florida and buildings for Jacksonville University’s use.
It also has submitted proposals for Downtown development.
Matt Demir, founder and broker of Xera Realty Inc., is the mall’s leasing agent and broker on the deal.
He said occupancy in the east wing is about 30%, and that includes J.C. Penney Co., which is closing.
The namdarrealtygroup.com site says Regency Square Mall comprises 1.39 million square feet, but that includes the separately owned properties.
Dillard Department Stores Inc. owns the clearance center, which is open for business; ESL Investments Inc. owns the for-sale former Sears store anchoring the west end; and Impact Church of Jacksonville Inc. bought the closed Belk store in the center.
ESL Investments is led by former Sears Chairman Eddie Lampert.
Mcgee declined to comment on those properties because Rimrock Devlin does not control them.
Once a retail leader
Regency Square Mall called itself the largest shopping center in the Southeast when it opened in 1967.
It was the area’s first major regional shopping center outside of Downtown.
Arlington is considered one of Jacksonville’s first suburbs.
The mall was filled with more than 100 department stores, boutiques, specialty retailers and food vendors.
The center doubled in size in 1981-82 and added more space in the early 1990s.
Shopping trends changed. By 2012, occupancy dropped to 60%. When Mason Asset and Namdar took over, previous owner General Growth Properties reported occupancy of about 38%.
Regency Realty’s acquisition six years ago generated optimism that new owners would revitalize the Arlington landmark.
Little changed inside the mall other than brand-name tenants left or relocated. Those included Belk, Kay Jewelers, Victoria’s Secret, Champs and Foot Locker.
Smaller tenants came and went.
J.C. Penney remains the anchor tenant in the east wing, but the department store will close as Penney reorganizes under bankruptcy laws.
J.C. Penney reopened the store June 12 after the pandemic and started storewide sales. The disposition firms handling the closings said all sales are final starting June 25.
Mall ownership said in February 2019 that it was exploring options, including selling the property.
“We understand at the moment that the mall needs to be rethought as to where this property will go in the next 50 years,” said Elliot Nassim, president of Mason Asset Management, in February 2019.
“We want to do what’s best for the city and the area,” he said.
Mason and Namdar specialize in acquiring aging shopping centers and regional malls.
In the past five years, Regency Square also has been involved in litigation.
One case was a lawsuit filed in July 2017 against Regency’s owners by International Decor Outlet LLC, which planned to lease nearly 200,000 square feet in the west wing for sublease to home-improvement tenants.
The lawsuit said the landlord denied access to the space and it alleged the air conditioning didn’t work, there were roof leaks and reasonable housekeeping and security services were not provided.
IDO attorney John Mervin Benton said the litigation is dormant.
Demir said June 17 that mall ownership has control of that space.
“People want to see it turn around,” Demir said.
From: Jaxdailyrecord