Joint Partnership May Spend $82 Mil to Purchase Mall and Improve It

PHOENIX-A local developer has partnered with a retail brokerage firm and a Canadian real estate investment firm to purchase one of the area’s largest malls for $42 million. The new owners plan to pour another $42 million into redevelopment.

A joint-venture, which includes Kitchell Development Co., a Phoenix-based general contractor and developer, along with De Rito Partners, a Phoenix-based retail brokerage firm, and Toronto-based Eastbourne Investments Ltd., is engaged in negotiations to purchase Christown Mall in Phoenix.

The 1.2-million-sf mall, built in 1961, is at the southeast corner of 19th Avenue and Bethany Home Road. The mall is anchored by Wal-Mart and Montgomery Wards stores, and later this month a Costco Superstore is scheduled to open.

The joint venture is negotiating with Samuel Grossman, former owner of the Arizona Biltmore Resort, to purchase improvements for $42 million. Grossman leases the land for the mall.

The joint venture has already paid $8 million for a 100-acre parcel of land underneath the mall. The seller was a trust managed by Wells Fargo Bank in Phoenix.

Once the deal is finalized, which could be as early as December but more likely early next year, the joint venture plans to raze certain portions of the mall and pour millions into new construction and redevelopment. A 160,000-sf area now occupied by a Dillard’s outlet store will be renovated to allow for three or more retail users. The renovation could also include a 16-screen movieplex operated by Phoenix-based Harkins Theaters.

The redevelopment will be completed in stages by Kitchell and is expected to take up to two years to complete.

Christown Mall is located at the final station of the first stage of development on the Central Phoenix/East Valley Light Rail Transit project, a 25-mile-long light-rail system that is expected to be in operation within the next five years. The starter segment of the rail will go from Christown Mall through Downtown Phoenix, past Phoenix Sky Harbor Airport, into Downtown Tempe and into Mesa.