Anyone who’s shopped Marley Station, the long-troubled mall on the southern edge of Glen Burnie at the intersection of routes 100 and 2, since the COVID-19 shutdown began won’t be surprised to learn that it was auctioned off in mid-September.
That’s especially true if they’ve cruised the mall in the past 20 years, really.
A gentleman who would only identify himself as a local investor purchased the 364,000-square-foot mall at auction for $1.65 million in mid-September on the steps of the Circuit Court for Anne Arundel County, in Annapolis.
However, owner Marley Station Mall LLC (a holding company of Dallas-based developer G.L. “Buck” Harris) is in foreclosure and filed for bankruptcy just before the auction.
Therefore, the sale is subject to the findings of a bankruptcy court and could be nullified.
The Marley Station property holds two liens – one for $15.6 million and the other for $1.6 million.
The second loan was subject to the foreclosure, which means if the sale is upheld, the investor has to pay the remaining $15.6 million.
But the recent auction is just part of Marley Station’s story. While three of its four anchors – JCPenney, Sears and Macy’s – are still open, as is Gold’s Gym, there are only about two dozen businesses operating in the mall, which sits on 71 acres of prime real estate.
With the viability of brick-and-mortar retail becoming a bigger questions mark, the buzz about redevelopment of the property has intensified.
Indeed, there is opportunity at Marley Station, “depending on who makes the winning bid,” said Wes MacQuilliam, business development/land use and real estate lead for the Anne Arundel County Economic Development Corp. (AAEDC).
He feels that mall isn’t quite the ghost town it’s often made out to be.
“People’s perception that nothing is open there isn’t true,” said MacQuilliam. “It’s home to one of Macy’s better stores and the Gold’s Gym was in line last year for a $2 million renovation. It was doing better than most people thought, pre-COVID-19.”
He said the representatives from the AAEDC and the local business community met with the executives from Marley Station Mall LLC after it was purchased by G.L. Harris, also at auction, in late 2016.
He said, “They had ideas for other concepts. The biggest need was to acquire the Boscov’s building, but that didn’t materialize” because owner Deepak Jain (CEO of Laurel-based AiNET) and the current owners couldn’t agree to a deal.
“Jain (who did not respond to The Business Monthly’s request for comment for this article) claimed he wanted to make the former Boscov’s a data center. That made no sense,” he said, noting that Amazon has leased its parking lot for employees and delivery trucks.
“G.L. Harris had wanted to put a Costco in Boscov’s (which was home to Macy’s when the mall opened in 1987),” MacQuilliam said, adding that more than half of the mall site is an impervious surface. “That means a new developer doesn’t need to take any trees down and could also improve the stormwater management system.
“In addition,” he said, “any new developer would benefit from the residential growth in Marley Neck section of Glen Burnie.”
County Del. Mark Chang (District 32) among the locals who are on board with a new project at Marley Station.
The Glen Burnie native remembers when the property was wooded acreage and discussed how mixed-use projects have come to the fore as lifestyles have changed.
“People want amenities close to their homes and that could be a theme of the next evolution of the property,” Chang said. “The property is well-situated due to the infrastructure and road network as well as the B&A Trail right behind it. It has great potential to be an economic asset for North County as well as the region.”
That type of repositioning is going on at the TownMall of Westminster and all over the country, and Mark Millman, president of Owings Mills-based Millman Search, said “25 percent of malls won’t exist in several years, as they’ll be repositioned into different formats.”
And Marley Station “never really did well after the first couple of years, then 20 years ago the opening of Arundel Mills didn’t help, nor did safety issues at the mall and the rise of ecommerce,” Millman said. “Then came COVID-19 and the days of anchor store dominance are coming to an end.”
So, Marley Station, he said, needs to be reborn “in another format, possibly with office, hotel, apartments, a small strip with convenience stores and some bigger ones, too.”
Also expect to see changes at the malls that do survive the shifting market, said Carol Spieckerman, national retail consultant at Spieckerman Retail, Bentonville, Ark. And that may include mall owners owning their tenants.
“Simon/Brookfield had already made a bid for JCPenney, Lucky Brands and Brooks Brothers,” Spieckerman said. “When these big developers buy the anchors and support specialty tenants too, they have control over the whole shebang. It’s just the latest example of how middlemen of all kinds are being eliminated in retail.”
If Marley Station does close as a mall, she said, that’s not that big of a deal to most of its chain tenants “because they would only be losing one location out of many. It’s the mom ’n pop retailers that are going to need an answer as to their fate, but even then, some may see it as an opportunity to escape from a bad lease or underperforming location.”
Like Millman, Spieckerman said “The interplay between brick and mortar and developers will be fascinating to watch. But I would be surprised if [its owners] try to revive Marley Station as a viable multi-retailers mall, since there are so many other possibilities. And there are always murmurs about Amazon taking one over for distribution purposes.”
There are many directions the mall’s eventual repositioning can go, making such situations “very tricky,” said Tom Maddux, principal with the Towson office of KLNB. “As these projects cycle through, you understand that the 71-acre site is an incredible piece of land. With the existing infrastructure, it’s even more valuable. Then you add the road network that features Route 100 and Route 2 and you’ve really got something.”
Maddux said, “It’s the same story with all of these malls. What will property be next? The empty department stores can become fulfillment, call or financial processing centers, schools, government buildings or medical facilities.”
In the case of Marley Station, you would also consider the new residential development in nearby Marley Neck.
“But how far down does the value of the property need to go before redevelopment makes sense?” Maddux queried. “Any new project has many variables, aside from the cost of the real estate. If that mall is sold at a foreclosure auction, it could be ripe for redevelopment.”
McQuilliam concurs, even though he thinks Marley Station’s foreclosure arose due to an internal or financial disagreement within Marley Station LLC.
“Numerous observers were surprised by the auction,” he said, “but I think this situation is heading in the right direction and that there is interest to purchase and develop the property. If it goes to a new owner, we’ll work closely with them to make it a great project.”
By Mark R. Smith | Senior Writer | The Business Monthly | October 2020 Issue