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Can Metrocenter rise from the ashes? Again

Metro-sign_rgbJackson’s 36-year-old Metrocenter Mall is set for yet another second act.

This one will be stage managed by a group of veteran Kansas retail developers from Colby Capital and Walter Morris Cos. as well as Jackson commercial real estate broker Scott Overby. They have adopted the name Jackson Commons, LLC.

The Kansas developers have redone distressed retail centers in nine states and see an opportunity to position the mall and the nearly 90 acres on which it sits as both a local draw with frequent visits from nearby Southwest Jackson residents and periodic visits from shoppers living farther away.

The owners say they are banking on the mall’s resurgence through exterior and interior improvements, a strong mix of large and small retail stores, a food court offering an A-list of local restaurateurs, a possible movie theater and other family entertainment draws such as a bowling alley or skating rink.

Representing forecloser First Credit Bank of Los Angeles, Overby had the 548,000-square-foot enclosed mall on the market for $6.5 million for several months starting last fall. By midsummer he had the property under contract — to himself and his Kansas partners.

Overby, referring to his firm The Overby Co., said: “We had such a familiarity with the mall we were able to get a good grasp of it.” The partners’ “assessment of it and ours was very similar: an extremely well-built, solid property.”

Before putting the property back on the market after First Credit Bank’s 2012 foreclosure on Texas-based owners  Jackson Metrocenter Mall, Ltd., Overby had to catch up on a large amount of neglected maintenance and undo the damage from 10 years of flawed decision making by the former owners.

Walking through the mall before agreeing to take on the listing, “My first response was ‘no’,”Overby said in an October 2013 interview.

The mall’s “downfall was bad management from the former owners who bought it in 2002,” he said.

One of their worst mistakes, he said, was  failing to step-up marketing after the loss of a couple of anchors, giving the impression the mall was dying a little more than eight years after an extensive renovation. “They should have done a better job advertising what was still in the mall. They were still over 75 percent occupied.”

Today the mall is about 40 percent leased, with around 60 tenants, including anchor Burlington Coat Factory, some national and regional retailers,  city administration offices, a police precinct headquarters and a Hinds County sheriff’s substation.

Getting the mall to today’s occupancy levels required removing mildew throughout the lower floor and repairing other damage caused by the former owners shutting down air conditioning on the vacant floor, Overby said.

Over its 10 years of ownership, the Texas group’s cutting of corners “erased over half the mall’s value,” he added.

Nonetheless, the mall’s chiller is in good working order and the roof is in good shape, according to Overby. “The new owners have a mall that is ready to go,” he said.

Tyler Oliver, a Colby Capital principal and managing partner of Jackson Commons, said elements are in place to reverse Metrocenter’s fortunes. “When you have a well-built property, a demand for retail and a community eager to support growth and redevelopment, you have everything you need to correct years of mismanagement and neglect,” Oliver said in a press statement Tuesday.

Work on the roads around the mall and exterior cosmetics will come first, Overby said, and be followed by exterior cosmetic upgrades.

“Then we’ll decide on interior changes” based on leasing, he added, though he is certain an overhaul of the food court will be among the changes. “We have some [local] restaurants in mind that we are going to offer lease arrangements that they can’t pass up.”

As a bank-owned property, the mall’s improvements in the last year or so have largely been aimed at stabilizing the property. Now, with owners able to invest in the structure and its surrounding, extensive upgrades can be made, Overby added.

Meanwhile, Jackson’s city government will be a key partner in the Metrocenter’s rebound, Overby noted, citing the need to remove city restrictions on signage and new development such as a movie theater and other family entertainment venues on the mall’s outside property.

A lot of the restrictions came in what Overby described as hastily made zoning decisions as part of former Mayor Harvey Johnson’s  Go-80 Initiative, a strategic plan to revitalize Jackson’s  U.S. 80 corridor.

City officials have indicated a willingness to redo the sign ordinance to allow Metrocenter to advertise its retail and restaurant offerings, according to Overby.

“The zoning needs to be tweaked” and the signage ordinance modified, he said.

Mayor Tony Yarber said in a press statement Tuesday that  he is eager to see the Metrocenter development plan. “This is a progressive group of investors,” he said, adding he is encouraged by the new owners’ willingness to “clean up the area to make it presentable to the current tenants and enhance efforts to recruit new tenants.”

Overby said Metrocenter’s tax bill is nearly $100,000 a year.  With the improvements to come, the taxable valuation can be expected to rise. A tax increment district, or TIF, could help the new owners bankroll some of the improvements through rebating some of the tax money derived from the higher valuations .

“We have talked to the City about exploring the possibility of a TIF,” Overby said.

Also, since the mall is situated within a designated redevelopment zone, the new owners may be able to get assistance from the Jackson Redevelopment Authority. “We’ve talked to the JRA. They’re on board,” Overby added.

“The consensus from everybody we speak to is that this one project will have a major impact.”

The name Metrocenter Mall will remain,  Overby said, “because it is exactly what we want it to be — the metrocenter.”

He hopes to land a supermarket as well as a health clinic to join a soon-to-open pediatric dentistry office on the premises. These would help make the mall a local draw, while a mix of medium and large retail will help to extend its appeal beyond Southwest Jackson,  Overby noted.

“We see a place some people will come to two or three times  a week and one others will come to every two or three months.”

Electronic counters at doorways into the mall show the Metrocenter has drawn slightly more than one million visitors over the past 12 months, according to Overby. Halloween night drew around 8,500 visitors for a Hinds County Sheriff’s Department “trunk or treat” party, he said, citing the turnout as evidence “the community will come.”

For now, added Overby, the task at hand is preparing the mall for Santa’s arrival the weekend after Thanksgiving.

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