Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: THURSDAY, March 16, 1995 TAG: 9503160062
SECTION: BUSINESS PAGE: BUSINESS EDITION: METRO
SOURCE: MAG POFF STAFF WRITER
DATELINE: LENGTH: Medium
Owners of Tanglewood Mall on Wednesday announced a $3 million expansion and renovation project that should bring its center's occupancy rate to 95 percent by fall.
Mickey Clark, chief financial officer of KTI of North Carolina, the Raleigh-based owner of the Roanoke County shopping center, said that the renovation is part of a three-year plan to upgrade the mall's image.
The arrival by early fall of Stein Mart Inc., a Jacksonville, Fla., department store chain,will signal the start of "major changes," he said.
Some people view Stein Mart as an upscale apparel shop and others see the chain as a discounter, Clark said.
It's a little of both, he added, and the store will give a unique flavor as the fourth anchor - after Brendle's, Leggett and J.C. Penney - at the mall and "a catalyst for higher traffic." Stein Mart's store will be on the lower level across the center of the mall from the interior Leggett entrance and the elevator.
KTI, a corporation primarily owned by developer John Kane, also is negotiating with the TJX Cos. for expansion of its TJ Maxx discount store into the upper-level space formerly occupied by CMT Sporting Goods Co. An in-store escalator would connect the two levels.
Clark said the mall owners have, over the last several months, deliberately left store spaces vacant when leases expired because his company was engaged in long-term negotiations with Stein Mart. Those negotiations have lasted for more than a year.
About four smaller shops will relocate within the mall to make way for the 35,000-square-foot Stein Mart store.
The addition of Stein Mart and expansion of TJ Maxx would result in 95 percent occupancy for the mall, Clark said.
If those changes are completed, the only major location still available for leasing would be a former restaurant site on the adjacent strip near a Kroger supermarket and Tanglewood Mall Cinema.
As leases on small stores expire during the next three years, Clark said, he expects certain tenants to expand under the long-term development plan. Other leases will be allowed to lapse, he said, and will be replaced by new merchants.
"We are in active discussions with several more nationally known stores and restaurants," Clark said.
Although Stein Mart has said that it locates in malls surrounded by high-income neighborhoods, Clark denied that the mall owners have that sort of merchandising in mind in attracting Tanglewood's new tenants.
A regional mall like Tanglewood, which pulls shoppers from a wide geographical area, needs a good mix of tenants, Clark said. Tanglewood needs small upscale shops, he said, but also discount stores, such as Goody's Family Clothing.
That opinion was echoed by Wendy Howell, who handles leasing for J.M. Kane & Co.
A regional mall, Howell said, must "consider both markets." Tanglewood, she said, must provide outlets appealing to higher-income markets nearby, but it must also offer "value-oriented retailers."
Richard Rowe, president of Construction Management Services Inc. of Raleigh, said the mall's renovation will include changing the finishing materials in the center court area for flooring and columns. Also, lighting, signs and "the overall appearance of the mall" will be updated.
Stairways at each end will be removed and replaced by escalators, Rowe said, and fixed plantings will be replaced by movable potted greenery.
Rowe said most of the remodeling will be completed by fall. Work will be suspended during the Christmas shopping season and resume early next year.
About 17 percent of the mall will be renovated, and 6,000 square feet of construction will be added. Tanglewood has more than 700,000 square feet of leasable space and about 100 tenants.
John Lambert, Roanoke spokesman for KTI, said the company is negotiating with lenders for permanent financing of the mall. Lack of permanent financing forced the owner to file for protection from creditors in a North Carolina bankruptcy court last November.
Lambert said a hearing on the permanent financing plan will be held in about 30 days, and all creditors are to be paid in full. He said the company should emerge from bankruptcy within a few months.
All new remodeling and leasing must be approved by the court, but Lambert said KTI expects no problem obtaining permission for the new improvements. Most of the financing for the project already has been obtained, according to Lambert, and the owners expect no difficulty in arranging for the balance.
by CNB