New owner of Phoenix Village Mall eager to redevelop the property

The 35-acre cluttered sea of asphalt and concrete that is known as Phoenix Village Mall has a new owner group that hopes to transform the property into an attractive and desirable commercial center.

FSM Redevelopment Partners LLC on Thursday (Jan. 22) acquired Phoenix Village Mall from Imperial Bank of California. The mall sits on approximately 35 acres and is bordered by Wheeler Avenue to the west, Phoenix Avenue to the south and Towson Avenue to the east.

FSM Redevelopment Partners LLC is an affiliate of Bentonville-based Nelson and Beaty Properties LLLP.  Stephen Nelson (right), a Fort Smith physician, and Lance Beaty are general partners in Nelson and Beaty Properties.

Phoenix Village was the first enclosed mall in Arkansas, according to a statement from the new owner group. Today, the property consists of approximately 475,000 square feet of retail, office, medical and warehouse space.

Imperial Bank paid $4.18 million for the mall property in November 2005. The bank had loaned mall builders and owners Jewel Morris and Howard Gentry more than $5.3 million in 1998. With Morris and Gentry unable to pay the note, the property was foreclosed on in September 2005.

LOCATION, LOCATION, LOCATION
Beaty (lower right), manager of FSM Redevelopment Partners LLC, said the site is well situated and surrounded by three heavily traveled corridors in the Fort Smith market with great visibility, traffic counts and access. Such factors make it a quality site that offers great value from both the developer and tenant perspective, according to FSM Redevelopment Partners.

“These outparcels represent excellent retail, restaurant and commercial locations with high traffic counts, great visibility, and easy access.” Beaty said in a statement.

FSM Redevelopment Partners is in the preliminary stages of design for a complete redevelopment of the site, with Crafton Tull Sparks and Associates of Rogers being hired for architectural, engineering and design services.

Beaty said it was his hope the design team and the city of Fort Smith would work together during the next few months to refine the redevelopment plan. He said some of the buildings will be demolished and other buildings will get a new life in that they will be extensively remodeled.

CITY SUPPORT?
The city of Fort Smith provided financial and infrastructure support for the Wal-Mart Supercenter at the end of Kelley Highway and the Fort Smith Pavilion-Target project near Interstate 540 and Phoenix Avenue East.

“That site development (Fort Smith Pavilion-Target), as far as ease of access for the user, is inexplicable to me,” Beaty said. “It reminds me of New Jersey real estate development: You can see it, but you can’t get there from where you are.”

Although the Phoenix Mall redevelopment will not require the extensive infrastructure development of the aforementioned projects, Beaty hopes the city will provide similar support to local developers who are using local funds to renovate a prime piece of commercial property.

Fort Smith City Administrator Dennis Kelly, who began his job in October, told The City Wire he did not have details on what FSM Redevelopment Partners are wanting to do with the site, but hopes the city can be a “positive” player in the redevelopment.

“We will work with them in every way possible,” Kelly said.

Kelly said he wants to see a conceptual plan for the Phoenix site and then compare the plan with past city practices of supporting commercial development projects.

DESIGN WORK
The preliminary site plan calls for the eventual demolition of the Phoenix Village Square and for a new 65,000-square-foot retail center to be built in its place. The demolition and construction will be phased so existing tenants may move directly into the new retail center without business interruption. Immediately after the tenants are relocated into the new center, the existing square will be demolished.

The old church building will likely be demolished, Beaty said. The approximate 1.5 acres on which Chambers Bank operates is not included in the 35-acre deal, Beaty said, but they are in initial talks about relocation options.

In addition to plans for a new retail center facing Towson Avenue, there will be general commercial, office and warehouse space designed into the development, as well as out parcels available on Phoenix, Towson and Wheeler Avenues.

Beaty, unwilling to release the cost of purchasing the property, did say the cost of development could range between $6 million and $50 million, with much of the costs borne by the individuals and companies who buy portions of the property.

“There is no doubt more than $6 million will be spent on this. But it’s premature to put a specific number on it because that’s what we’re working on now,” Beaty told The City Wire.

Beaty said the redevelopment plan will include input from existing tenants, city officials and those interested in buying or leasing some of the property. He said sources of initial inquiries include restaurant and hotel developers, warehousing companies and two national big-box retailers not now operating in the Fort Smith market.

“What’s exciting is that the word is not really out on this and we are already hearing from people who are, I would say, relieved that something is finally being done (with the old mall property). People are happy that someone is finally going to convert it to something that is positive,” Beaty explained.

DEVELOPMENT CHALLENGE
Beaty admitted that the partnership was tackling a large and potentially expensive project in tough economic times.

“It is a challenge, but it is also value investing. You have to have the vision to take a property that is at the end of its current economic life and breath life back into it and create new value,” he said.

The other challenge, he admitted, is taking what is considered by many an ugly piece of commercial property and dressing it up.

“Absolutely,” Beaty responded when asked if a development plan will include green spaces. “We have to do that because that adds value. We think that is important, and that is certainly on our list of priorities.”