FLORENCE, Ky. — The City of Florence has hired a consultant to chart a new course for Florence Mall, where the vacancy rate is approaching 50% and all four anchor-store buildings are now seeking buyers.
“Some people might say, ‘Stores are closing. This is a bad thing.’ We look at this as an opportunity,” said Florence Mayor Julie Aubuchon. “If the mall goes away, that doesn’t mean our business district goes away. And I think that (makes Florence) very different than a lot of other cities.”
Montrose Group consultant Wade Williams, a former economic development specialist for REDI Cincinnati, will be paid up to $50,000 for his analysis of potential new uses at the 49-year-old mall property.
Aubuchon said the city expects a report by May that will be used by city officials to seek interest from developers at the International Council of Shopping Centers Convention in Las Vegas.
“What we want to do is leverage these properties being for sale into something that really will be desirable for this area,” Aubuchon said. “Maybe (we can) create a mixed-use type of development where there’s walkability, there’s entertainment, a sports focus, possibly hotels and residential.”
Florence City Administrator Josh Hunt said the mall lost many of its national tenants and its vacancy rate in non-anchor spaces increased to 45% since new owners took control in 2022.
Those owners, led by New York-based Namdar Realty Group, did not respond to WCPO’s questions for this story.
Namdar led an ownership group that paid $38 million to lenders who took control of the mall in 2021 after Brookfield Properties defaulted on $90 million in commercial mortgage-backed securities debt. As recently as March 2020, Florence Mall had an occupancy rate of 87%, according to Brookfield’s annual report.
Aubuchon said Namdar has expressed interest in bringing new retailers to outlets on the Florence Mall property, but those deals never panned out. In September, Hunt said a $60 million proposal to buy and redevelop a long-vacant Sears store fell through, partly because Macy’s put its two Florence Mall stores up for sale in July.
The home-furnishings and department store were not among the 66 store closures that Macy’s announced this week, but the retailer is still working to identify 84 additional stores that will close in the next two years.
In the meantime, buyers are being sought for Florence Mall’s JC Penney store, as part of a 120-store offering from Copper Property CTL Pass Through Trust. It was created to reimburse investors who lost money in the retailer’s 2020 bankruptcy by selling off real estate.
The 120 stores in 34 states are expected to fetch a price tag in excess of $100 million. Because 90 of the properties are adjacent to malls and 30 are inside malls, the portfolio is being sold as a way to be involved in mall redevelopments all over the country, according to CoStar.
With so many variables in play, Florence will have a very little control over what happens next at Florence Mall, said Nick Egelanian, president of SiteWorks Retail Real Estate Services in Silver Spring, Md.
“It’s somewhat chaotic,” Egelanian said. “You’ve got four different owners and they're all looking out for their own best interest. There's no indication that any of them are trying to redevelop it. There’s no indication that any of them are trying to control it. There's no indication that any of them are working with Namdar.”
Egelanian said it could take 15 years for the mall to be redeveloped. He thinks the city would be better off waiting to see if private investors can acquire a controlling interest in the mall.
“It’s ultimately going to be who controls the majority of the parcels that determines the long-term use of it,” said Egelanian.
