Apartments, offices, entertainment complexes and even casinos – there’s been a wide range of new uses for declining Pennsylvania shopping malls.
State Rep. Jim Rigby, R-Ferndale, said former Galleria property manager Zamias Services Inc. approached him eight months ago to discuss attracting a casino, but law currently forbids further casino expansion.
Rep. Frank Burns, D-East Taylor, said The Galleria in Richland Township is “prime real estate” and believes the mall is one of several Cambria County locations that can attract big companies through the state’s tax incentive program.
An agriculture expert with Penn State University said using the mall’s high ceilings for indoor hydroponic growing of hops and or microgreens for restaurants would be possible.
When any redevelopment of the 894,646 square-foot Galleria may happen is also uncertain.
At the beginning of February, Zamias Services Inc. turned over property management of The Galleria to a receiver at the request of banks foreclosing on the debt-laden mall. The total payoff due to mortgage lenders by The Galleria’s former owner and landlord, Florida-based ADAR Johnstown, is $14.6 million, The Galleria’s mortgage foreclosure documents show.
Pittsburgh Mills mall in Frazer Township, Allegheny County, was another former Zamias property. Pittsburgh Mills foreclosed in 2015.
Frazer Township secretary Lori Ziencik said Friday that a receiver had also been in place at Pittsburgh Mills before a new developer bought that site. The receiver “kept it running” with no big change, she said. About two years after the receiver took over, a developer bought the property, but today the mall is still largely vacant and the developer remains unclear about its plans, Ziencik said.
“We are hopeful the plans include housing, entertainment – all of that,” she said.
Zamias Services Inc. President Joe Anthony boasted the capabilities of the receiver taking over in Johnstown. Spinoso Real Estate of Syracuse, New York, specializes in stabilizing malls prior to sale.
Anthony said it was a mutual decision to bring in Spinoso.
Aside from Spinoso’s capabilities to turn malls around, Anthony also said Richland Township would be attractive to a developer.
“Richland is a dominant submarket in Johnstown,” he said. “Nothing is even close. This is a hot spot. This will be a dominant commerce area.”
The Boscov’s factor
A developer buying The Galleria could tear apart the mall’s enclosed configuration and turn it inside out, giving people more entrances from outside, Anthony said.
“Overhead goes down, heating, cooling ... You can add green spaces, amphitheaters, trails,,” he said. “… Most of the projects being redeveloped have a component of mixed use. For example – senior living, student housing, hotels and entertainment from axe throwing to trampoline parks and virtual reality. You find synergies among your users.”
In Delaware County, the Granite Run Mall was returned to a lender in 2015. But under new ownership, it is now phasing in apartments along with retail stores and restaurants, according to a 2019 article from the Delaware County Daily Times.
Smaller examples of redevelopment include Erie County’s Mill Creek Mall that filled 50,000 square feet in 2018 with an entertainment complex, including a bowling alley, according to GoErie.com.
And casino construction began last year at the Westmoreland Mall in Greensburg. Similarly, Hollywood Casino York is expected to open in late 2020 or early 2021 at the York Galleria, according to The York Daily Record.
In all of those malls under redevelopment, Boscov’s department stores remain open.
And Boscov’s will buttress whatever new development comes to the Johnstown Galleria, too, said Jacob Stein, Boscov’s senior vice president for communications and real estate.
“We’ve seen all kinds of new uses for malls,” Stein said, “some good, some terrible.”
The continued presence of Boscov’s, as well as JC Penney, will help Spinoso Real Estate as it prepares The Galleria to be sold, Stein said.
“If you can point to Boscov’s and say ‘they’ve done extremely well here,’ it gives Spinoso credibility,” Stein said. “It says there is business to be done here. If people didn’t like it, they wouldn’t be going to Boscov’s. Spinoso just has to find other users to accommodate the community.”
Hops and hydroponics
Hydroponic growing of hops for breweries in the northeast, or “microgreen” vegetable greens for salads at white-tablecloth restaurants, could be a strong business at The Galleria, Anthony believes.
“This is a perfect location because you are close to Pittsburgh, and a close drive to New York City,” he said, adding that hydroponic projects have taken root at another Zamias property in the Midwest.
Hydroponic growing is a process of raising plants indoors in sand, gravel or liquid, as well as a mix of natural and artificial light.
The northeast region in general is a hot market for hydroponic crops production because of the population centers along the East Coast, according to Thomas Ford, a horticulture expert with Penn State Extension, which delivers science-based information to businesses and communities.
Ford called hydroponic hop production a speculative venture right now. But there’s potential and “very few competitors in the marketplace.”
The number of brewery licensees in Pennsylvania today – 455 – reflects an increase of nearly 190% from six years ago, according to the Pennsylvania Liquor and Control Board. But a majority of the hops production comes from West Coast states because of the climate. Hydroponic growing opens the door for more locally grown hops in the East, Ford said.
“If a hydroponic operation of any type is initiated at the mall, in my opinion, there needs to be an agritourism tie-in,” Ford said, “or it needs to be integrated with a farm-to-table restaurant, a brewery or entertainment complex.”
Casino not possible now
Malls in Westmoreland and York counties were chosen as casino sites after the 2017 mini-casino law opened a bidding process to larger casinos interested in adding smaller locations.
Although it has been discussed between The Galleria’s former property manager and a state lawmaker, nothing has materialized in Johnstown at this point.
Rigby said Zamias officials had previously approached him to see if he would support the possibility of a casino in one of the vacant anchor stores of The Galleria.
“I met with Zamias representatives from The Galleria about eight months ago in reference to trying to get a casino to possibly come in and possibly take over where the Bon-Ton or Sears location was,” Rigby said.
Rigby said a casino would have some positive affect for the local economy and keep people from taking their money to Rocky Gap in Maryland, but he also said he was wary of the dangers that come with gambling addiction.
But in September, another statewide auction for one license came and went without a single bidder. That was the gaming board’s second unsuccessful attempt to auction a license since 2017, and there are to be no further auctions under current law.
Another state lawmaker said he is promoting Cambria County to representatives of e-commerce company, Amazon.
Burns said he met with Amazon governmental affairs representatives in Harrisburg last summer in the hopes of enticing the company to create jobs in Cambria County.
That meeting ended, he said, with plans to arrange another visit in Cambria County this spring. However, nothing is scheduled, he said.
Burns pointed to a state program that gives new industries substantial tax incentives to locate in the region – the Keystone Opportunity Zone, or KOZ, program.
“We had a meeting in my office about the benefits if they located in a Keystone Opportunity Zone,” Burns said. “We piqued their interest. This type of thing is never easy. It’s one step after another.”
The state government boasts that Business Facilities magazine called the KOZ program “the No. 1 economic development strategy in the nation.”
As of Dec. 31, 2017, KOZ applicants had created 7,278 jobs and invested $2.6 million in private capital into KOZ properties in the state, according to the Department of Community and Economic Development.
Burns pointed to Amazon distribution centers that aren’t located in big cities – some in communities the size of communities in Cambria County, he said.
Burns said he wants to show the company’s representatives places along routes 22 and 219. With The Galleria going on the market, that’s another option, Burns said.
“The Galleria is prime real estate,” he said. “I would show it to anybody.”