Wednesday, August 15, 2018
Real Estate

Big Tampa Bay shopping center, hit with $73 million foreclosure suit, is up for sale

By SUSAN TAYLOR MARTIN

PINELLAS PARK — Faced with a whopping $73 million foreclosure suit, one of Tampa Bay’s largest open air shopping centers is up for sale.

Colliers International has begun marketing Shoppes at Park Place, the 500,000-plus-square-foot center whose tenants include Target, Marshalls and Office Depot along with many other retailers, restaurants and a movie theater.

The shopping center at U.S. 19 and Park Boulevard is 97 percent occupied and appears in no danger of shutting down. Colliers calls it a "trophy asset’’ and a "thriving retail property" in the heart of Pinellas County.

But the foreclosure suit and sale listing will likely lead to yet another ownership change of the 42-acre tract whose history reflects the tumultuous nature of the retail business.

The Shoppes’ forerunner was Pinellas Square Mall, a two-story, enclosed mall opened in 1974 by Edward J. DeBartolo at a time when developers liked to put a multitude of stores under one roof. But by the early 1990s, two of the mall’s anchors — Montgomery Ward and J.C. Penney — were struggling as shoppers turned to stand-alone, big-box retailers like Target and Walmart.

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Ward closed its Pinellas Square store in 1997, the same year that the John Hancock Life Insurance Co. bought the mall and launched a major renovation that included a new ice rink and movie theater. Still, the mall continued to lose customers, many opting for the revamped, open air Gateway Center a few miles away.

Retailing expert Barton Weitz says the growth in online shopping and other factors spurred the decline of enclosed malls like Pinellas Square.

"People used to do more shopping for entertainment," said Weitz, executive director emeritus of the University of Florida’s retail studies center. "Now people are more interested in going to specific stores and getting their shopping done. These open air stores accommodate that kind of shopping behavior better than enclosed malls because you can park closer to the store where you want to go to."

Moreover, he added, "most of the big stores in enclosed malls were department stores, which have fallen out of favor among consumers."

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In 2003, John Hancock sold what was then called Parkside Mall to KB Parkside LLC, controlled by developer Robert E. Schmidt Jr. and his wife, Kelly. Numerous store fronts were vacant and Penney had downgraded its full-service department store to a dreary outlet center.

The mall hung on until 2004 when the last remaining anchor, Dillard’s, finally closed. Everything but the movie theater was torn down, paving the way for Shoppes at Park Place.

Last year, U.S. Bank sued KB Parkside and two other companies. The suit said they defaulted on a $71 million loan taken out in 2006 and due to be paid in full by January 2017. As of that March, interest and fees brought the total debt to $72.95 million, with interest accruing at $19,491 a day since then.

The suit over the loan, which has been securitized, is thought to be among the largest foreclosure suits filed in the Tampa Bay area.

Robert Schmidt, who is mayor of the Pinellas gulf-front town Belleair Shore, did not return a call and emails seeking comment. In a statement, Colliers said it is receiving "significant interest" from potential buyers attracted to the center’s "internet-proof" tenants like beauty salons.

Colliers did not give an asking price for the property, which includes all parcels except those owned by Target and Chili’s Bar & Grill. The brokerage notes that Shoppes at Park Place is in the center of Florida’s most densely populated county with 70,000 vehicles passing by daily and nearly 430,000 people living and working within a seven-mile radius.

Like Shoppes at Park Place, once enclosed shopping centers in Clearwater and Seminole are now open air. Tampa Bay Center, an enclosed mall that opened to great fanfare in the 1970s, disappeared in 2001 when most of its tenants went to the glitzy new International Plaza.

"You can’t afford to build enclosed malls anymore with rare exceptions because the cost of operating them, from air-conditioning to security to marketing to electricity, is just a lot of money," said Craig Sher, executive chairman of the Sembler Co., which redid Clearwater Mall. "It’s very difficult for indoor malls these days."

Contact Susan Taylor Martin at [email protected] or (727) 893-8642. Follow @susanskate

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