Wednesday, January 24, 2007

2003 Mall Auction, 2001 Peebles Closing

*The following articles were retrieved from The Daily Times archives on January 23, 2007

Old Mall on Sale
By Daniel Valentine

Daily Times Staff Writer
SALISBURY -- An auction Thursday of the old Salisbury Mall failed to attract a single bidder for the city's former retail center.

Though the auctioneer dropped the asking price five times, no developers were willing to make the minimum $3.5 million starting bid for the 55-acre site.

"Is there any interest at all?" Real Estate Broker John Hanenfeld asked the crowd of about 15 developers from Salisbury and other areas.

The potential bidders stood quietly in the mall space once occupied by a Peebles store as auctioneers reduced their opening bid of $5 million to $3.5 million before calling off the sale.

"I don't think we're going to reduce it any more," Auctioneer Bill Bunch told the crowd after he made repeated calls for a bidder.

Hanenfeld said owners have received several private offers for the former retail center on Civic Avenue that they will review.

"It's going to be sold," Hanenfeld said.

The silence at the auction Thursday is the latest in the ongoing struggle owners have had with the old Salisbury Mall.

Built in 1967, the mall was the retail center of the city for two decades.

But when a new mall was built on north Route 13 and retail businesses flocked to the new commercial corridor in the 1990s, the shopping center fell on hard times. In recent years, several of the old mall's anchor stores moved out.

Today, the mall is mostly empty except for a few shops and a martial arts academy.

Owners have been trying to sell the mall for several years, along with a proposed residential development off Saint Albans Drive.

Real estate sources in Salisbury say owners had originally asked for $9 million for the property. Tax assessments place the mall's value at about $5 million.

Unable to find a dedicated buyer, owners put the site up for auction.

The pending sale had attracted interest from across the country. Several local developers also had eyed the property, hoping to use the site to build a hotel or commercial complex to complement the neighboring Wicomico Youth & Civic Center.

Several officials in the area say the mall will require extensive work to redevelop, however. Carpets in the building are stained from leaks in the roof and the parking lot outside is cracked.

"It would cost ($3.5 million) just to plow it under," one official said Thursday.

But owners say the mall could become a lucrative investment. Two acres near the site bought for $600,000 in 1997 were sold again this year for $1.1 million.

At the auction, owners also were unable to sell 21 acres already approved for a residential development. The auctioneer lowered the original $3 million starting bid to $1.5 million with no takers.

Bunch, an auctioneer from Pennsylvania, said it is not uncommon for no bids to be made at a real estate auction.

"It isn't like selling antiques or art," he said after the sale. "But it helps get people interested in the property. People come out and see it. That usually leads to a sale."

The auction was attended by several residents who live near the site. Area residents say they are tired of seeing the large building lying dormant.

"It has to be developed," said Virginia Elliott, who watched the non-sale with her husband.
* Reach Daniel Valentine at 410-749-7171, Ext. 320, or

Peebles closes doors in old mall
By Angie Basiouny
Daily Times Staff Writer
SALISBURY - Peebles, the last department store in the old Salisbury Mall, will close within two months because of lackluster sales, company officials announced Thursday.

"Every year, we evaluate our position in each of the markets we serve relative to sales and profitability," said Mike Moorman, chief executive officer of the Virginia-based company. "In our analysis of the Salisbury store, compared to other locations, we felt it best to reallocate those assets to better serve our customers overall."

He did not give further details about the store's financial health.

Peebles Inc. owns more than 120 stores in 15 states. The closing will not affect locations on Delmarva in Seaford, Rehoboth Beach, Onley, Milford, Chestertown, Elkton and Easton.

"We have been very pleased with the performance of these stores," Moorman said. "We are grateful for the customer support we have received in Salisbury and for the outstanding job our associates have done in the store."

The store's 20 full-time and part-time employees were notified Saturday and offered positions at other Peebles in the region, general manager Diana Parsons said.

She did not know how many employees accepted the offer.

"I haven't made up my mind yet, either," said Parsons, who has been with the company for four years. "To be honest with you, the morale right now is pretty good."

The closing brings focus on the future of the deteriorating mall, which has about a dozen remaining tenants, including Food Depot and a branch of Sojourner-Douglass College.

An exodus of stores began in 1990 when Hecht's and Sears relocated to the newly built Centre at Salisbury. Last July, a leaky roof sparked an electrical fire in a vacant wing of the 35-year-old building, and some areas were condemned.

Salisbury Mall Associates - the company that purchased the building and adjacent land for $4 million in 1997 - planned to convert the mall into a retail strip with a courtyard.

Though the project was approved three years ago, no construction has taken place.

Steve Smethurst, attorney for the company, said his clients still intend to renovate.

"The difficulty has been in order to get the financing, you've got to get anchor tenants," he said. "Big banks don't give big money without that."

Smethurst cited the nationwide economic slowdown as reason for the slow progress.

Major retailers from JCPenney to Kmart have announced closings and cutbacks in the last year. Montgomery Ward shut down its 250 stores, including one in The Centre, earlier this year.

Moreover, a retail boom at the town's northern end during the 1990s has saturated the market, Smethurst said.

"Right now, trying to recruit a nationally recognized department store to Salisbury is nigh to impossible," he said. "The Peebles closing is not desirable from the owners' standpoint. It's another loss in revenue."

Plans to build St. Alban's Commons - a $20 million mix of condominiums, apartments and townhouses across from the mall - also hit a snag.

Construction crews broke ground on the project in March, but heavy spring rains stopped the work. Smethurst said they will return to finish laying the infrastructure within 60 days.

The company has been negotiating to sell the land to developers who will build the homes. However, only Hebron Savings Bank has purchased a corner parcel.

"The direction in which the owners would like to go is still the same," Smethurst said of both projects. "They simply have to ride it out until conditions improve."

Peebles will begin a liquidation sale July 4.
*Reach Angie Basiouny at 410-749-7171, Ext. 320, or


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