Dalton’s Walnut Square Mall plans changes

IN BUSINESS › C1

A multimillion-dollar plan to save Walnut Square Mall in Dalton, Georgia, will involve tearing down the former Sears and JCPenney anchor stores to make room for other kinds of tenants.

The shopping center that remains will receive an extensive interior upgrade, and the name will change to Dalton Mall, said John Mulherin, a vice president for owner Hull Property Group.

“Job one for us is to save this mall,” he said.

That effort will involve repositioning the mall to attract new tenants, Mulherin said. Those may include typical retailers as well as nontraditional mall users, he said.

Work taking down the empty Sears will start later this year, and a new entrance to the mall will be built, Mulherin said. The former JCPenney store space will go away in early 2019, he said.

All that work will remove 168,000 square feet of space, leaving the mall with 285,000 square feet, Mulherin said.

But Augusta, Georgia-based Hull Property will have about 14 acres on which to rebuild depending on future tenants, he said.

Likely, new tenants will involve “outward facing shops and power centers,” Mulherin said.

In addition, former movie theater space at the mall will be torn down, he said.

Mulherin said when all the space targeted for demolition comes down, the mall will have just a 6 percent vacancy rate.

“We think there’s nothing wrong with the mall,” he said, noting it still includes a Belk department store. “We’ve got to create the right atmosphere.”

The company vice president added that there’s nothing wrong with the Dalton retail market either. But regional shopping malls nationally are under pressure from online sales and there aren’t the big-box retailers to fill up the Sears and JCPenney space.

Also, plans are to replace the lighting and put in new lighter colored carpet for an improved atmosphere, he said.

Where there are vacancies, the company will put up sheetrock with crown molding and murals until new tenants are found, Mulherin said. In addition, various banners reflecting different shopping periods during the year will be hung.

“It will be like night and day,” he said.

Candice Perez, manager of the Claire’s store inside the mall, said she thinks the changes are “good.”

“It would bring in more customers,” she said. “It would be good for us.”

Mulherin said the company expected to benefit from the property’s placement in a tax allocation district by the city, Whitfield County and the public schools. Under the program, Hull pays property taxes on a base figure, but any increases above the base are redirected back to the developer for reimbursable expenses, he said.

“We spend money upfront on the thought we’re right” about increasing the value of the property, Mulherin said.

Three years ago, Hull Property bought Walnut Square and two other malls from Chattanooga-based CBL Properties for $32.25 million.

In 2014, CBL announced plans to sell 21 of its shopping malls, about a quarter of its nationwide holdings, in an effort to upgrade its remaining properties and boost the company’s income.

CBL, too, is repositioning its properties to meet the challenges of store bankruptcies and online shopping. For example, CBL bought the Sears store at its flagship Hamilton Place mall in Chattanooga with an eye on redeveloping the property.

Outside the mall, a Cheesecake Factory eatery is going up in a parking lot near Sears. A Dave and Buster’s restaurant and entertainment site, medical offices and a hotel are potential additional uses.

Contact Mike Pare at mpare@timesfreepress. com or 423-757-6318. Follow him on Twitter @MikePareTFP.