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Pasco's Gulf View Square mall put up for sale

PORT RICHEY — Simon Property Group has put long-struggling Gulf View Square mall up for sale in a move to purge marginally performing properties from its portfolio.

The move is a clear sign that Simon, the world's biggest mall owner, has given up trying to turn around west Pasco's largest shopping center.

While it's possible that Simon could sell to an institutional investor and be paid to continue managing and leasing the property, the company historically has preferred to be both owner and operator.

The Indianapolis-based mall giant, which values the 61-acre property at $74.1 million, is packaging Gulf View for sale on its own or with Boynton Beach Mall and other malls in Knoxville and Memphis, Tenn.

With a combined book value of $350 million, the four properties could be one of the biggest post recession retail real estate deals. Real Estate Alert's Deal Database lists only four sales exceeding $100 million, led by Simon's $300 million purchase of controlling-interest in several California malls a year ago.

Les Morris, a company spokesman, said the company "does not comment on the potential disposition" of its real estate.

Local retail real estate agents think the Gulf View sale is a larger offshoot of spreading decline in a once prosperous, but now aging hub of U.S. 19 commercial activity in Pasco County. Some nearby chain restaurants have closed and an adjacent 300,000 square foot shopping center fell into receivership when its Target discount store closed. Average household income among the 122,000 people who live within 5 miles is a modest $45,000.

"It's as much a reflection of the local market," said David Conn, who heads the retail practice at CB Richard Ellis in Tampa. "Simon did not see the mall improving to a level it expects from its portfolio. On the plus side there will probably not be another regional mall ever built in west Pasco, so longer term this could become a catalyst if new owners are found to do a major renovation."

County Commissioner Ann Hildebrand said part of the county's long-term plan is to revitalize the U.S. 19 corridor, adding that the mall would be an "excellent candidate" for urban renewal.

"I think it would be ripe for a refurb," she said. "But I don't think you want to tear down that mall."

The mall, which lost many of its specialty chains years ago, is 18 percent vacant, a rate more than twice the national average of 7 percent for regional malls.

It generates annual sales of less than $300 a square foot. And many of its storefronts are occupied by local tenants on short term leases. The 31-year-old mall has not been remodeled since 1998.

Two of the mall's anchors, Dillard's and Macy's, own their stores, but JCPenney, TJMaxx and Best Buy are renters.

The news of a potential sale didn't surprise many merchants, who were hoping for a quicker recovery from the economic downturn.

"It seems to be a more laid back and walk slow kind of place with a lot of retirees," said Chris Elwell, who manages a kiosk that sells "full-body balance bands" made from volcanic ash.

"Since Spring Hill developed (with more retail), fewer people come this way to shop," said Linda Gucciardo, co-owner of Avanti Jewelers.

"This mall has a lot of work to do," added Estefania Urrea, who works at Noa Perfume Collections kiosk, adding that discount stores like TJMaxx "don't belong in a mall."

While strong malls remain a dominant player in retailing, the relentless growth of discount stores, big box chains and online shopping made weak malls obsolete. That's what doomed five enclosed malls in Pinellas and three in Hillsborough that closed in the past 20 years.

Shoppers agreed Gulf View needs a jolt.

"This is not as busy as it should be," said John Biederman, a regular Pasco winter visitor from New Jersey. "It would be sad to see it close."

"It could use more restaurants," said Hudson retiree Dawn Atkins.

"Maybe it isn't appealing to young people," said Paullette Roberts, a snowbird from Rockland County, New York. "I come here with a group of ladies. We do pretty well when we come here."

Mark Albright can be reached at albright@sptimes.com or (727) 893-8252.

Pasco's Gulf View Square mall put up for sale 04/07/11 [Last modified: Friday, April 8, 2011 10:13am]
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