At some point in the not-too-distant future, after the hubbub of the holidays have faded, your next trip to the mall may be to renew a driver’s license, attend a municipal meeting or for some other governmental service, a guy who buys and sells distressed malls predicted this month.
A glimpse of that future is coming soon at the Moorestown Mall and Rockaway Townsquare, which were designated by the state as mass coronavirus vaccine inoculation sites.
Could a leisurely stroll to Auntie Anne’s for a hot pretzel or an impulse buy at a clothing boutique be next?
Steve Maksin, CEO of a privately-held company that sold a New Jersey mall last year, said figuring out what they are good for now is going to be job-one for the brick-and-mortar retail-sales industry and dozens of towns in New Jersey and elsewhere that depend on the hefty tax revenues. “I’ve repositioned some malls into call centers, department of motor vehicles, entertainment centers with a significant component of governmental, state and local use,” he said. “We are no longer depending on foot traffic from the shoppers. The retail is no longer the driving force, it is a backstage actor.”
New Jersey’s former Burlington Center Mall was sold by Maksin’s Moonbeam Capital for $22.5 million in 2019. It is being transformed into an e-commerce warehouse complex fronted by retail shops and restaurants. “The world has learned it can work remotely and we can work from home and order online,” Maksin said. “So the mall concept is no longer viable, period. They will need to go through a cleansing process, go through foreclosure, be sold at a bargain price and redeveloped into something else, by someone else, not the existing landlords.”
Eleven miles south of the former Burlington Center Mall is the Moorestown Mall. It has lost three of its four anchor stores in recent years, including Sears, Macy’s and Lord & Taylor. A Boscov’s remains. It is owned by PREIT, a company that emerged from bankruptcy this month. The township is not waiting for PREIT to come up with a plan for salvation. It just approved a measure to build nearly 400 apartments in a parking lot of the former Lord & Taylor and a hotel is expected to rise on an adjacent mall parcel nearby. The development is expected to be a lifeline for the mall by providing foot traffic from residents and hotel guests and also helps Moorestown meet its state-mandated affordable housing obligation.
Mayor Nicole Gillespie said even if PREIT does not develop the property, the township believes it can maintain the 50-acre site as a viable economic hub. The 375 apartments already approved is phase I of a project that could eventually replace the mall with 1,065 apartments if retail totally fails, township officials say.
“The old version of the mall, as a place where you go hang out and shop all day, is a thing of the past,” Gillespie said. “We, along with PREIT, recognized that a while ago and started moving away from that some time ago.”
PREIT also owns the Cherry Hill and Cumberland malls in New Jersey and is considered a premium mall owner in the Philadelphia region.
Requests to PREIT for comment last week were not immediately returned.
Maksin said companies like PREIT, which own about 22-million square-feet of mall properties in the Mid-Atlantic region, concentrated in Philadelphia, may have a hard time recovering.
“Landlords with high mortgages will have to give the properties back to the lenders or declare bankruptcies with hopes of reducing liabilities and reorganize into something else,” Maksin said. “But it’s going to be very challenging to do so.”
PREIT painted a rosier picture for its investors in a statement earlier this month.
“Having quickly and efficiently completed our financial restructuring, PREIT is now a more resilient company with additional resources and financial flexibility to continue delivering terrific experiences for consumers and outstanding service for our retail partners,” said Joseph Coradino, CEO of PREIT.
Gillespie and other officials in Moorestown said they are preparing for scenarios with and without PRIET. The township Planning Board is scheduled to vote on a measure declaring the mall an area in need of redevelopment, which provides financial incentives, including tax breaks to attract new businesses.
“It’s a big part of our town,” Gillespie said. “It has been looking dated, in need of love for a long time. But we think can be a model for what becomes of malls as a central entity in a vibrant town.”
Then she added: “We have no reason to believe PREIT is going away.”
Rockaway Townsquare, located 101 miles northwest of Moorestown, already has a name that sounds like it can weather the coming storm, Maksin predicts.
But its owner, Simon Properties, completed an interior renovation last year that only focused on remaking the food court area into a bistro seating style and improved lighting and flooring. Now food court seating has largely been prohibited by state executive order.
Simon, the largest mall owner in New Jersey and the country, has announced no plans for residential development or other governmental use beyond the vaccine program.
A request to Simon for comment was not immediately returned last week.
Rockaway Township Mayor Mike Puzio said local officials are still focused on maintaining their most valuable tax asset.
“The retail landscape has been changing for years,” Puzio said. “We have to rethink what malls mean to consumers. We have to be creative to make it more of a destination center. Whatever it fleshes out it is going to have to be repurposed away from the retail.”
The mall covers more than 100 acres and is centrally located in the northwest section of the state in Morris County. Simon’s website describes it as “a super-regional shopping center” that is “family-oriented” and offers abundant retail options that cater to children.