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Feldman Mall Properties Inc. proposed up to $50 million worth of renovations to one of its newest acquisitions, Golden Triangle Mall, at a Denton City Council work session Tuesday.
The proposed renovations include adding a multi-screen IMAX theater, a food court with up to seven restaurants complete with a live stage for local bands to entertain free of charge, two additional restaurant spaces near Barnes & Noble Booksellers and an overhaul of the center court, entrances and seating areas inside the mall. Plans also include extending Dillard’s floor space inward from more than 129,000 square feet to 140,000 square feet.
Denton Mayor Perry McNeill called news of the renovations “very positive.”
“The first thing is they have a good history of doing this kind of thing and you feel comfortable they will do what they say they will do,” McNeill said. “There are a lot of new concepts there that will add pizzazz to the mall — the IMAX theater and the softening of acres of concrete with landscaping, which I think will make it more attractive.”
Larry Feldman, chairman and chief executive officer of Feldman Mall Properties, told city officials he planned to add significant landscape changes, with trees and visible signage for passers-by on Interstate 35E to see. In addition, tall stone entrances with lit panels would offer more visibility as well as safety for people visiting at night.
 The plans also include creating living room-style seating areas, at least five, throughout the mall with sofas, chairs, flat-screen TVs and carpeting.
The proposal was to give city officials an early glimpse of plans the company expects to get under way, possibly by mid-year.
When the company purchased the mall in June 2006 from Simon Property Group Inc., Feldman said his company bought it with the idea of investing capital to turn it into a class ‘A’ mall, considered such if retail sales per square foot reach $400 or more.
“This mall is so ideally located right at the epicenter of [Loop] 288 and [Interstate] 35,” he said. “About 100,000 cars per day go by.”
Feldman said he wanted to create a “jaw-dropping” experience for Denton shoppers who shopped there five or 10 years ago.
“People who live in Denton drive right by the Denton mall,” he told council members, adding that the Vista Ridge Mall in Lewisville was a popular attraction for residents along with malls in Frisco and Dallas.
“The experience they get at that mall [Vista Ridge] is better than what they get at Denton,” Feldman said. “You need to shock the consumer to get them to come back.”
The company’s plans to put in an IMAX theater complex, additional restaurants and nicer seating areas are ways to keep shoppers lingering longer.
The time to renovate the mall is now, Feldman said.
“In the absence of doing anything, the mall is in grave danger,” he said. “This mall, in its current condition, is going down.”
McNeill agreed with the need for renovations, saying there is concern about older malls. “You see them all around the country with wooden shutters and I don’t want to see that in Denton,” he said.
The publicly traded, New-York-based real estate investment trust company also is facing a challenge from one of its shareholders, Mercury Real Estate Advisors LLC, to sell the company.
The challenge is not expected to affect the new owner’s plans for Golden Triangle Mall, Feldman said.
“Regardless of any stockholder issues, the company is committed to proceeding with the Golden Triangle redevelopment,” Feldman said. “It has no relevance whether we are a private company or a public company.”
The mall will likely remain unaffected by the shareholders’ challenge, said Dr. John Baen, professor of finance, insurance, real estate and law in the College of Business Administration at the University of North Texas.
“I don’t think the Denton mall has anything to do with the value of that REIT [real estate investment trust] stock so it’s not like it’s going to hurt the mall if the REIT unwinds,” Baen said. “Another REIT will buy it. However, that REIT might not have the same fix-up, spruce-up deal about it.”
In a proxy statement submitted on Dec. 18 by Mercury, which owns 9.8 percent or 1.2 million of Feldman’s 13.1 million shares, the officials cited poor financial returns since Feldman turned public in 2004.
“The corporation lacks the sufficient size required to operate as a public company,” according to the proxy statement signed by Malcolm MacLean IV, president of Mercury.
Mercury officials indicated in the proxy statement that an immediate sale would benefit its shareholders and agreed to hold on to its stock until the next shareholder meeting.
Feldman said his company has decided not file a formal response to the challenge.
In the meeting in Denton on Tuesday, Feldman unveiled the proposal to eventually create a public-private partnership with the city of Denton similar to one the company had with another property in Harrisburg, Pa.
Linda Ratliff, economic development director for the city of Denton, said the company has not approached the city for any tax incentives.
“Like all these projects, you want to see what they propose before you say, ‘Yeah, that’s something the city will commit to,’” McNeill said.
With the Pennsylvania mall, the company negotiated $8 million in government grants and incentives, spending an estimated $72 million to renovate the 900,000-square-foot mall.
The Pennsylvania mall was in dire shape, Feldman said, with two of its three anchor stores pulled out and a third threatening. The company brought in Bass Pro Shops, saving 1,200 mall jobs and adding another 400 to 500.
Renovation of Denton’s 880,000-square-foot mall is expected to cost between $40 million and $50 million, Feldman estimated.
“It could even be more,” he said.
An estimated 1,200 to 1,400 people are employed at Golden Triangle Mall, he said. The mall currently has 66 percent permanent leases with 95 percent occupancy including temporary tenants.
Calling the renovations “mallotomies,” Feldman said the renovations could take up to five years for malls without anchors and less for malls with anchors.
One concern, Feldman said, is that other mall operators might “try to steal our anchors.”
Talk of possible courting of the mall’s anchors has surfaced recently though no decisions have been announced.
“It’s very, very competitive,” said Joe Gampper, president of Allegiance Development, developer of a 412-acre open-air mixed-use development proposed for Denton. “We’re not the only ones talking to the anchoring tenants.”
Rayzor Ranch, which is proposed just north of the mall at I-35 and U.S. Highway 380, is currently in the planning stages.
As the largest retail development proposed for Denton, Rayzor Ranch is looking to add several major retailers to an estimated 2 million square feet of retail. Already announced are a second Wal-Mart and a new Sam’s Club in the Rayzor Ranch Market Place on the north side of U.S. 380. A third anchor store will be a home improvement center.
Randy Holcombe, executive vice president in retail for Allegiance, said the potential for the mall to lose anchors is not due to the management but, instead, to market changes.
“A lot of changes have occurred since the stores opened in the mall in the ’80s,” he said.
Some companies have changed their business models and are looking to reposition their stores.
“The reality is the city of Denton has tens of millions of dollars in annual sales leakage to competing cities,” citing Frisco and Dallas as examples, he said.
“There’s hundreds of situations around the country similar to Golden Triangle,” Holcombe said. “It’s not a victimization of the existing owner, it’s a modernization of the consumer experience.”
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