Plans for redeveloping SouthPark Mall in Moline continue to move forward with the owner, Macerich Corp., despite a report that the owner has put SouthPark and NorthPark malls up for sale.
According to a news report by Reuters.com, the Moline and Davenport properties are among 17 non-core, or Class B, malls that Macerich has listed for sale.
Plans to sell the malls were announced by Macerich executives during the company’s fourth-quarter conference call. However, when contacted Tuesday by the Quad-City Times, Karen Maurer, senior manager, corporate communications for Macerich, would not confirm nor deny that the properties are for sale. In an emailed statement, she said “We are not able to comment on rumors in the marketplace.”
Moline City Administrator Lew Steinbrecher described the announcement as “unexpected,” given the progress the city has made in working with Macerich on redeveloping SouthPark.
The city and Macerich “have had a very positive relationship” since Macerich took full ownership of the mall in December 2011, he said. After reaching his Macerich contacts Tuesday, he added, “Macerich has confirmed they are still committed to renovating SouthPark in partnership with the city.’’
According to Reuters.com, Macerich has put more than $1 billion of its mall assets on the market and has received a significant amount of interest in the properties. Reuters reports that larger real estate investment trusts have been trying to sell off lower performing malls as the gap widens between malls with the highest sales per square foot and the others.
Fourteen of the malls are wholly owned by Macerich and average sales of about $321 per square foot, according to marketing documents obtained by Reuters. Most of the Macerich malls up for sale are more than 90 percent leased.
Paul Rumler, Quad-Cities Chamber of Commerce’s executive vice president, who sits on the chamber’s SouthPark Mall Task Force, said he thinks the malls might have been put on the block “to see what interest there is in the market.”
“But we are continuing our conversations with Macerich,” he said, adding that several task force members traveled to Des Moines last month to meet with Macerich at its Southridge Mall property. “It’s going to be one of those projects like we’re talking about at SouthPark,” he said of the Des Moines property. It’s an older mall that needs a lot of investment.”
The task force, made up of city, chamber and business representatives, has been in discussions with Macerich since it became the sole owner of NorthPark and SouthPark. Macerich had co-owned the properties for nearly a decade in a 50/50 venture with Simon DeBartolo Group.
Rumler pointed out that the Quad-City malls have been on and off the market for a decade. “The difference this time ... from last time is past owners have stopped talking about investing in the property while the mall was for sale,” he added.
Rumler said there is no sign of talks stalling now. “We don’t look (at a potential sale) as a stop in the ongoing work we’ve started with the company.” Upgrades that Macerich has been making at both SouthPark and NorthPark show the owner sees the potential value of the properties, he added.
The chamber task force was formed 2 1/2 years ago to put a focus on what now is an aging, but major, retail property in the Quad-Cities, Rumler said.
Steinbrecher said the city tried for several years to work with Indianapolis-based Simon on a redevelopment plan but with little success.
The city has been pursuing the creation of a tax increment financing, or TIF, district, to assist Macerich in its planned renovation. The TIF district, which would include the 121-acre SouthPark Mall Redevelopment Project Area, was tabled in November by the city council due to a pending appeal by the mall owners of its property tax assessment.
The TIF district will return to the council for a vote in late April, Steinbrecher said. In addition, he expects Macerich to present conceptual schematics of the renovations to the task force before the end of June.
Located at two of the Quad-City area’s largest traffic thoroughfares — Interstate 74 and John Deere Road, Rumler said “It’s a declining asset, that is a real issue ... you look at that property and know it can be doing better.”
“It doesn’t matter who owns the property; we want to work with any ownership group in maximizing their return ... right now, Macerich is a willing partner,” Rumler said.