Nevada investors purchase Century III mall

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A Nevada investment firm will try to beam new life into West Mifflin's ailing Century III Mall, plagued by lots of empty space where stores and eateries used to be.

Moonbeam Capital Investments LLC of Las Vegas recently bought the struggling shopping mall from an asset management firm based in Texas. That firm had acquired the 34-year-old, 1.3 million-square-foot mall from Simon Property Group in 2011 after Simon defaulted on a $79 million loan.

"Century III has seen better days," said West Mifflin borough manager Brian Kamauf on Monday. "It certainly has its challenges."

Executives from Moonbeam Capital, led by chief executive officer Steven Maksin, flew to West Mifflin earlier this month to meet with him and other borough officials, including Mayor Christopher Kelly and police Chief Ken Davies.

"We appreciated their visit," Mr. Kamauf said. "This [sale] all happened so fast. It was good of them to fly in and meet with us. We were encouraged. The mall still has a lot of life in it."

Moonbeam officials did not return phone calls.

Moonbeam is expected to hire new top executives for the mall, including a general manager, an operations manager and a marketing manager.

The sale hasn't been recorded yet in Allegheny County records, but local officials said the price could have been as low as $10 million, in part because of the large amount of vacant, unleased space. Moonbeam will almost certainly have to spend much more to restore the facility to its former shopping prominence.

Borough officials said that as recently as 2006, the mall was assessed at a value of $150 million, but as stores left and lease revenues dropped, the value decreased to $27 million in 2012.

Under the recent county tax reassessment, it went back up to $134 million, but that value will almost certainly be appealed. In view of the many empty stores, borough officials expect a court to significantly lower the assessment, thus lowering the tax revenue that West Mifflin derives from the property.

Mr. Kamauf said Century III remains an important part of West Mifflin's economic engine, along with Kennywood Park, a community college branch, the Allegheny County airport and U.S. Steel.

"The mall still has a lot of value and can be the centerpiece for the community," he said.

Mr. Kamauf wasn't sure what Moonbeam's long-term plans are for the mall. "They don't want to make any snap decisions," but for the immediate future, the mall will get some "cosmetic improvements," such as new paint on the walls, new carpeting and improvements to entrances and parking lots.

The interior of the mall is still attractive, with "considerable natural lighting and open space," he said. West Mifflin officials are willing "to give Moonbeam some time to formulate their long-term plans, a vision, for the mall."

Moonbeam, according to its website, specializes in turning around problem-ridden properties.

"Over the years, MCI has acquired distressed real estate and nonperforming loans with the unpaid loan balances of almost $1 billion," its website says.

Its holdings include more than 50 properties around the nation, with more than 9 million square feet of leasable space, including several regional shopping malls, office buildings, apartments and hotels. It owns real estate in several places in Ohio, including Cleveland, Akron and Dayton, and in Pennsville, N.J.

Century III was built in 1979 by Ohio developer Edward J. DeBartolo. The name comes from the fact the U.S. was just starting its third century at the time the mall opened. It was built on a huge former steel slag dump owned by U.S. Steel. It was acquired by Simon in 1996.

For many years it was doing well, with 200 stores and restaurants, but has fallen on hard times in the past decade, in part due to stiff competition from The Waterfront stores in nearby Homestead and a renovated South Hills Village in Bethel Park.

It still has some major anchor stores, such as Sears, Macy's, Dick's Sporting Goods and American Eagle, but a number of stores, such as Dollar Tree, KB Toys, Ritz Camera, the Disney Store and Old Navy have moved out in recent years, leaving about 40 percent of the retail space vacant. It has less than half of the 20 restaurants it once had.

neigh_east

Tom Barnes, freelance writer: suburbanliving@post-gazette.com


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