It has been 17 months since the Hull Property Group submitted their request for a Tax Allocation District financial package to tear down 107,000 square-feet at the Sears’ end of Mount Berry Mall. Those plans have changed.
Rome’s Southeastern Mills has been using approximately 70,000 square-feet, virtually all of the Sears space, as a warehouse for months. SEM Business Unit Manager Josh Trammell said with the growth of the company’s Better Than Bouillon product the company needed some outside warehousing.
“There is a lack of warehousing available for food manufacturers in Floyd County. We searched Floyd, we went to Calhoun and there just wasn’t any accessible space for that,” Trammell said. “From a food manufacturing perspective you have to make sure that everything is buttoned up tight from a pest perspective and dock doors perspective. It has to be clean, air-tight and we’ve got to be able to have doors closed, locked and code-accessed. You can’t allow just anybody to walk in.”
The arrangement turned out to be a win-win for both SEM and HPG. However, that will be coming to an end, probably around the end of the year, as SEM transfers product to its new warehouse and distribution center on Superior Drive in the Floyd County Industrial Park.
In spite of the impending loss of a revenue-generating client, John Mulherin, vice president for government relations with HPG, said the company’s plans have changed with respect to demolition of the Sears send of the mall.
“Without the TAD, we are going to go in and do an upgrade and interior renovation of the mall,” Mulherin said. “It’s just a strategy at this point, not to say we won’t come back to it at some point in the future, but we’re going to continue with the improvements with the mall without the TAD assistance.”
That said, the issues that led HPG to make the initial decision to tear down the Sears’ end of the building not only continue to exist, but have gotten worse with the loss of two more retailers in this year. In his 2018 letter requesting the TAD financing, Mulherin wrote, “The Mall’s disconcerting current 37.6% total vacancy rate presents an insurmountable obstacle to keeping current tenants in the mall, much less attracting any new tenants to the mall if not addressed immediately. However, demolishing 107,000-square-feet of chronically unleasable space would decrease the vacancy rate to 20.46%, and while not ideal, this vacancy is a far more manageable level that allows for the property’s stabilization. Many of the mall’s current tenants have upcoming lease renewals, making the proposed redevelopment absolutely time-critical to this property’s future success.”
The TAD request indicates that, aside from the four anchor slots, Sears, Dunham’s JC Penney and Belk, the mall has a 51.94% vacancy rate among it’s smaller tenants. Since that time, two more stores have left the mall. Finish Line, an athletic shoe store and Lids, which sold sports caps, both closed earlier this year.
Mulherin explained that HPG still has to make incremental improvements at Mount Berry mall to keep it viable and an attractive place for people to come shop. He said that work in the mall will not start until sometime after the first of the year.
“It’s going to be a total refresh of the property,” Mulherin said. According to the original TAD request, HPG plans to invest over $4.5 million to position the mall with the intent of eventually attracting new tenants.