Plaza 3000 owner Azure Properties has landed Hobby Lobby, a big win for a mall that’s languished for years.
The biggest retail lease transition of 2013’s fourth quarter wasn’t at a trendy lifestyle center like the Shops at West End or a mega-shopping destination such as the Mall of America.
Rather, it was at a largely vacant, 1970s-style neighborhood mall in Maplewood, whose fortunes are being transformed with the landing of a new, 48,000-square-foot Hobby Lobby store.
The Plaza 3000 Center at 3000 White Bear Av. opened in 1975, shortly after the completion of Maplewood Mall across the street. Its owner, Little Canada-based Azure Properties, has seen its fortunes ebb and flow with the ever-changing patterns of local retailers and small-scale chains.
The 111,810-square-foot shopping center started life as a grocery-anchored neighborhood mall, and is probably best known as the former longtime home of Larkin Dance Studio, which was its anchor tenant for 35 years before moving to a new quarters elsewhere in Maplewood.
It currently houses an Old Country Buffet restaurant, a Petco pet supply store and other tenants, such as Party City, Regency Beauty Institute, Salon to Shay and Allstate Insurance.
The most noticeable thing about the center nowadays, however, is its big vacant spaces and largely empty parking lot. Its idle space includes a large chunk just vacated in March by the value retailer Tuesday Morning. Some spaces in the mall have been vacant for as long as three years.
The center also must contend with a wide interior pedestrian hallway. Such hallways were commonly built as amenities in ’70s-era centers as a way to battle the Minnesota climate. Now they are considered little more than unproductive space, and only a few remain in existence.
But with the coming of Hobby Lobby, Plaza 3000’s vacancy rate will plunge from 41 percent to just 2 percent, said Anita Johnson, who along with Lisa Christianson of Christianson & Co. Commercial Real Estate Services represented Azure Properties in the transaction.
Johnson said the deal came together two years after she reached out to the 600-store, Oklahoma City-based arts and crafts retailer, which is planning to open up to 15 locations in the Twin Cities. Its first metro-area store debuted in February in a 50,000-square-foot former Sportsman’s Warehouse space in Woodbury.
“In June, I got a call from [retail broker] Bob Minks [of Colliers International], who was handling the Hobby Lobby account,” she said. “He said they were interested in coming to Maplewood.”
What followed was a series of negotiations over the lease rates and how to pull off the biggest transformation in the neighborhood mall’s history, essentially converting a big part of it from multitenant to single-tenant space.
Johnson said the amount Hobby Lobby ultimately signed for remains confidential, but added that the changes made to the mall will be profound, including eliminating much of the troublesome interior hallway, boosting rentable space by nearly 10,000 square feet.
Tom Schuette, Plaza 3000’s longtime property manager, said Azure Properties is kicking in a significant amount of “replacement power” to land the big deal, including walling off the new space from the rest of the mall and construction of a new entrance.
“The electrical service will be all new, and is extremely large,” he said. “We have to build a loading dock behind the building that they can back semitrailers up to. We will have to reroute underground gas lines to do that.”
Hobby Lobby, meanwhile, will be responsible for building out its own space.
“We’re shooting for an Oct. 1 opening,” Scheutte said, assuming the long winter freeze abates soon enough to allow for underground utility work.
The pair said the deal shows that owners of long-vacant retail space in even the hardest-to-fill malls can ultimately find takers in the current market if they occupy prime locations and are willing to perform upgrades.