senior vice president of marketing with St. John Properties Inc.
Q: How does Harrisburg Mall complement or differ from other properties in your company's portfolio?
A: We have about 17 million square feet total, (with) close to 1 million square feet of retail. The retail we have right now is a lot of service retail that is ancillary to our business parks.
The questions people ask when they rent space from us in a business park are: "Where do I park?" and "Where do I eat?" We generally try to have some service retail in our business parks.
We also have three open-air strip shopping centers, so the acquisition of Harrisburg Mall is the next logical step in our expansion of our retail portfolio.
Why did the company pursue it now?
It's an extraordinary opportunity. We were the third or fourth prospective buyer. The price kept dropping, and we bought it. We're the happy beneficiaries of a price reduction.
What are some trends in retail, and how do you incorporate them into this facility, knowing $60 million was spent five years ago to upgrade it?
The mall we feel has very good bones and has been mismanaged as a result of being owned by an interim owner. The sole requirement for taking a tenant in the past five years was, "Can they pay the rent?" (It was) not necessarily, "Are they the best for the Harrisburg shopper and do they complement the other retailers in the mall?"
You may be seeing some tenants who we will not be continuing with because they don't add anything to the shopping experience for the Harrisburg shopper.
The low price is going to allow us to say, "We'd rather have an empty space than have a bad space."
We're going to take a rental hit to do it, and we're happy to do it. We want to get some national retailers in there and national food people in there and have a food court that perhaps people would come to (for variety). Right now you can't do that.
If we have to reduce rental rates to fill that food court, that's what we're going to do.
How do you sell this mall to national retailers and fill vacant spaces such as the planned Barnes & Noble bookstore space?
We know the sales of the retailers in Harrisburg Mall. Victoria's Secret's sales-per-square-foot is doing great. The jewelry stores are doing great on a sales-per-square-foot basis. The biggest category we're going to focus on is ladies' fashion and ladies' stores. We have Bass Pro (Shops). Men come there. They walk in, and they walk out.
We hired a national mall consultant by the name of Rene Daniel of The Daniel Group. One of the first things he asked for is the existing inventory of vacant spaces and how are each fitted out. We're going store by store and reaching out to people in those categories to take existing stores with zero tenant improvements (needed).
I think we can with our good bones hopefully attract some of those national folks and bring them to Harrisburg.
This is like eating an elephant. It starts with one bite.
(The bookstore) is a 30,000-square-foot space. We could get Dick's Sporting Goods or somebody big like that. What we're looking for is a junior anchor for that. If they don't have a name that people recognize, we're probably not going to take them.
Can this be the go-to place area consumers want to shop?
That's what we're shooting for.
There will be this interim period where there is going to be some vacancies there where the tenants that we don't feel are conducive to the long-term achievement of that goal … the spaces are going to be empty, maybe for a year.
It's going to be a process. It's not going to happen instantaneously.
What is the community marketing plan?
What we would like to do is events, (maybe) once a week or once a month. For example, a glee competition that invites the local middle school and high school chorus groups and have a competition on Saturday afternoon. That brings 300 or 400 kids and 600 adults. We will treat them to a nice competition and give prizes out.
The previous mall people had the Pittsburgh Steelers here signing autographs and car shows. That's all men's stuff. We want the women and kids there. It's going to be a shift away from muscle cars and jock (stuff) to glee and fashion shows, princess shows, American Idol competitions and (other) talent competitions.
The other outreach we would like to do is to offer free space for the Kiwanis meetings and chamber of commerce meetings. I have doughnuts in the car for our mall walkers. We want those people to come here.
Do you see long-term profitability in this mall, and do you intend to keep it?
We're keepers; we're not flippers. We're going to do stuff for the long-term turnaround of this mall, not to just create value and then sell it to somebody. We don't sell anything. We have 17 million square feet because we built this stuff and we kept it. We don't generally buy other people's properties. This was such a compelling opportunity.
It's a small city that's been allowed to drift for five years. We want to make it vibrant again.
About Gerard Wit and St. John Properties
Gerard Wit has been with St. John Properties since 1990. He oversees marketing and leasing for office, retail space and research and development/flex. He holds a bachelor’s degree in physics and a master’s in financial management from Loyola College in Maryland.
The 64-year-old is a Baltimore resident.
Baltimore-based St. John Properties owns and has developed commercial space throughout Colorado, Louisiana, Maryland, Virginia and Wisconsin. Much of the privately held company’s portfolio is in Maryland.
On July 16, the new owners of Harrisburg Mall held a ceremonial demolition of an unfinished sports bar. The cost was $75,000, Wit said. That space will be landscaped, and the wall of the mall there will be exposed and signed so people driving along Paxton Street can see what stores are in there, he said.
Other plans include additional investments in updated signage, improving mall access and stronger marketing. Landscaping plans and a new entrance have been pegged at $550,000, Wit said.
Last month, the owners hired a mall director to oversee the management of Harrisburg Mall.
Futureland’s prospects rest outside Harrisburg Mall
The news that Harrisburg Mall’s new owners would not embrace the Futureland Project was crushing to the enthusiastic and growing group of technology entrepreneurs.
Although Futureland’s idea for a tech startup co-working and showcase environment in the mall is dashed, the key words here are “growing group.”
Not long after the mall was sold, the group met, and its ranks swelled to include two key advisers: Susquehanna Township business consultant Mark Sussman, who is helping Futureland write its organizational structure, and Leland Nelson, the owner of Harrisburg-based Dirty Dog Hauling.
“The important thing now is to get this thing organized in a way that attracts support and financial backing,” said Brad Thorne, Futureland’s creator and co-founder of Harrisburg-based tech startup Prize Monkey.
Thorne said Futureland continues to look for a landing spot in the region.
Organization was a key urging of Sussman, who has said Futureland needs to establish a founding board, an advisory board and organizational structure, as well as processes for partnerships and equity buy-ins. That will govern how Futureland reaches Thorne’s goals for support and financial backing, Sussman said.
“My opinion is we need something on paper,” he said.
—Jim T. Ryan