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Owner: Southgate to be 'de-malled' starting this month

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The new owners of Southgate Mall plan to demolish three empty sites at the nearly 50-year-old indoor shopping center: the former J.C. Penney and Merchant’s Tire and Auto buildings and the free-standing former Kangaroo Express convenience store on the mall property. The Vireo Group plans to convert the enclosed shopping center into a partly open venue.

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By William F. West
Staff Writer

Saturday, June 10, 2017

Three empty sites at Southgate Mall will soon face the wrecking ball, as the mall’s new owners seek to transform the nearly half-century-old shopping center from an enclosed building into a partly open venue.

Clay Boardman III, a managing member of the Georgia-based Vireo Group, said in a brief email Saturday that his company plans to demolish the former J.C. Penney and Merchant’s Tire and Auto buildings. The free-standing former Kangaroo Express convenience store on the mall property will also be demolished, Boardman said.

Boardman anticipates the demolition work on the former Penney’s, Merchant’s and Kangaroo buildings will begin sometime later this month.

"All is going to plan so far and we are excited about the transformation to come," he said. 

City Manager Rich Olson, in his weekly memo to city councilors and the mayor on Friday, said details of Vireo’s plans for the mall first emerged in a private meeting on Tuesday between city officials and Boardman, his associate John Gibson, and Pat McDowell, a local engineer assisting the Vireo Group.

Olson said although the Vireo Group continues to work on specifics, Gibson told city officials the company’s intent is to “de-mall” the property, changing it from the typical indoor structure anchored by large department stores on each end.

Southgate Mall, which opened in 1969, is anchored on the east side by the Elizabeth City Belk, which the Charlotte-area based chain renovated in 2013 at a cost of $1.8 million.

The mall had been anchored on the west side by Penney's until the chain pulled out in the spring of 2015. Adjacent Merchant’s Tire and Auto left the next spring.

Olson said Gibson told city officials Vireo wants the mall to offer an open-air shopping experience, with each individual retailer having its own storefront. To achieve this, Olson said, Vireo intends to update the mall’s façade to give the appearance of unique storefronts.

Following demolition of the Penney’s site, Vireo plans to use it as temporary green space until a new tenant can be secured and a new storefront constructed, Olson said.

Olson said the former Kangaroo site will remain vacant until a future use can be determined.

He also said Vireo plans to implement its plans for the mall in phases. Improvements to the mall’s facade, along with improved landscaping and new lighting, will be completed before the holiday shopping season, he said.

Boardman, in his email on Saturday, said plans call for improving the mall's parking lot early next year, after crews finish working on the shopping center.

Southgate Mall, located along the long-busy West Ehringhaus Street, is the Albemarle region's only major enclosed shopping center. But under its previous owner, New York-based ABC Properties, the mall lost a number of tenants, as local shopping patterns shifted to the west to the newer Shoppes at Tanglewood and Tanglewood Pavilion.

In July, Southgate Mall was sold for $8 million at an auction on the Pasquotank County Courthouse steps to L and R Partners, a Miami-based debt servicing firm. The sale was prompted by ABC’s default on a 2005 promissory note held by the company’s lender, Bank National Association.

Olson announced in February the mall had been sold for some $2.3 million through an online auction to an as yet-unknown group, which he eventually identified as the Vireo Group.

Southgate Mall is valued at $6.3 million by Pasquotank officials for taxation purposes.

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