Greeley Mall owner recruiting tenants, planning upgrades

As excitement builds over the pending renovation of the Foothills Mall in Fort Collins, redevelopment plans at the Greeley Mall are progressing as well.

The Greeley shopping center was purchased during a foreclosure auction a year ago for $6.15 million by Moonbeam Equities, which owns six other regional malls nationwide. Since then, Moonbeam has worked to find new tenants for the 504,822-square-foot facility, especially in the anchor spaces.

In 2010, the former owners, Barrington, Ill.-based GK Development defaulted on a $40.4 million loan on the property.

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The anchor spaces have attracted “quite a bit of interest,” but the company is not yet ready to name tenants, according to Sandra O’Clock, general manager of the mall.

The owners are doing a retail market analysis in conjunction with UNC’s Monfort College of Business, O’Clock said. The results of that analysis, which are expected in May, will help determine which tenants are the right fit for the space.

O’Clock hopes to have the results back in time to take them to the annual conference of the International Council of Shopping Centers in May. The conference will provide access to hundreds of potential tenants, and O’Clock hopes the market research will help identify the right ones for Greeley.

“We don’t want to just fill space,” she said. “We want to get the right tenants for this market.”

The mall’s ownership and management wants to focus on Greeley’s student population, according to O’Clock. Similar to efforts made by the Greeley Downtown Development Authority, the mall will seek to attract some of UNC’s approximately 13,000 students, many of whom live just minutes away.

“Right now, Greeley is a town with a university in it rather than a university town,” O’Clock said. “The city would like to become a university town, and we would like to help with that.”

The Greeley business community is “thrilled” that Moonbeam is going to make an investment in the community, according to Greeley Chamber President Sarah MacQuiddy.

MacQuiddy agreed that there is a lot of untapped potential stemming from the UNC campus.

“There are students there looking to adventure into retail if they have the place to do it,” she said.

In addition to focusing on students, the new owners are also planning upgrades to the exterior of the 40-year-old building. Part of the plan is to add directional signs and redesign the parking layout. Plans also include a digital display along Highway 34, which runs past the mall, O’Clock said.

The southeast side of the mall needs the most attention, she said, and to that end, a new access point will likely be added along 30th Street.

Tax increment financing may be used to finance the parts of the project.

The mall sits inside one of Greeley’s five TIF districts, according to city economic development director Bruce Biggi. The use of tax increment financing has to be approved by the Urban Renewal Authority.

Tax increment financing is used by municipal governments to finance redevelopment projects, mostly in blighted areas.

In order to be declared blighted, an area must meet at least four of 11 criteria set forth by Colorado statute, then be approved as such by the governing body, usually a city or town council, as well as by taxing entities within the area.

Once that area has seen improvement, it can begin generating higher property taxes, which go back to the city and other taxing entities such as counties and school districts.

Other TIF districts in Greeley include the site of the Leprino cheese plant and the Downtown Development Authority boundaries, Biggi said. TIF is used occasionally in Fort Collins to help fund large projects such as the construction of Summit, a student housing project within the Midtown Urban Renewal Area.

Right now, the Greeley Mall is about 65 percent occupied, according to O’Clock. Like many regional retail centers, including the Foothills Mall and Twin Peaks Mall in Longmont, the Greeley Mall saw a marked decrease in shoppers, and therefore tenants, during the recession.

After GK Development defaulted on its loan, auction dates for the property were pushed back several times because of a lack of bids.

The mall then sold in an online auction for a fraction of the original $40.4 million loan in March 2012.

Moonbeam Equities has done this sort of deal in other markets as well, purchasing struggling malls for a song, and then revitalizing them.

In the Orlando, Fla. area, the company purchased the West Oaks Mall, with a loan balance of $60 million for just $15.9 million in November 2012. Prior to that, the company turned around a mall in Houston, taking it from 30 percent occupancy to 85 percent occupancy in just seven months, according to published reports.