Mall Plans Expected By February

September 25, 2002
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MUSKEGON — The chains are down and the parking lots are open.

Now, with the property under its control, a downtown development group plans to move “at all due speed” with selecting a developer and formulating plans for the redevelopment of the Muskegon Mall site.

Partners in the Muskegon Downtown Development Corp. hope to submit a redevelopment plan to the city for zoning approval by February. The not-for-profit organization, a recently formed public-private-philanthropic partnership whose members have worked informally for more than two years on the mall’s acquisition and eventual redevelopment, envisions turning the 23-are site into an “urban village” with a balance of office, retail, residential and recreational uses.

“We’ll move at all due speed,” said Chris McGuigan, president of the Community Foundation for Muskegon County. “The quicker we change the look down here, the better.”

Two national developers already have shown an interest in taking on the mall’s redevelopment, McGuigan said, but declined to name names. Now that the property is secured and the city is behind the corporation’s efforts, McGuigan expects to hear from other interested developers.

The Community Foundation for Muskegon County joined with the Muskegon Area Chamber of Commerce and the Paul C. Johnson Foundation to form the Muskegon Downtown Development Corp. to acquire the mall property and gain local control on how it is ultimately redeveloped. The City of Muskegon, while not an equity partner, has representation on the corporation’s board.

The organization reached an out-of-court settlement with the mall’s previous owner, Rick Perlman of Chicago, to end foreclosure proceedings. The final transfer of the property on Sept. 12 came about a month after the group bought the mortgage on the property from creditors and initiated foreclosure proceedings.

The settlement with Perlman included paying him an undisclosed sum that avoided a six-month, and possibly longer, legal proceeding. The amount, McGuigan said, was less than the legal costs that would have been incurred if the foreclosure had gone to litigation, as well as the time involved to go through the legal process.

“We considered the burden of waiting six months,” she said.

Business and community leaders celebrated the property’s acquisition with a “chain-cutting ceremony” last week to remove the chains securing the mall’s parking lots, opening them for public use. Perlman closed the parking lots last November, citing liability concerns.

As the parking lots reopened, partners in the Muskegon Downtown Development Corp. heralded the potential for the mall site and the opportunity to recreate such a large portion of a downturn business district that is already seeing significant new investment — an estimated $100 million in planned, ongoing or completed developments.

“Great things, exciting things will be happening right here in the months to come,” Charles Johnson, president of the Paul C. Johnson Foundation, said during last week’s ceremony.

He and others envision the property’s future redevelopment as helping to transform Muskegon into a “beautiful coastal city” along Lake Michigan.

Opened in 1976 in the heart of downtown with more than 60 tenants, the Muskegon Mall has fallen into decline in recent years. The decline accelerated last year with the opening of the Lakes Mall on Sternberg Road, just east of U.S. 31, and the relocation of some anchor stores and retail outlets.

With the mall closed, its parking lots becoming covered with weeds and nobody sure what the future held for the site, businesses were beginning to steer away from downtown Muskegon, Chamber of Commerce President Cindy Larsen said. She expects that with a future course identified and a redevelopment plan on the way, more businesses will begin to consider locating downtown.

“The mall had an emotional hold on our community. Until we liberated this property, it would have been difficult for a number of people to move forward,” Larsen said. “We’re gearing up for a steady influx of development inquiries.”

As Muskegon experiences a rebirth of its downtown and new development, including the Muskegon Lakefront SmartZone high-tech business park along Muskegon Lake, community leaders have made redevelopment of the mall property a top priority. The enthusiasm for the project was symbolized in the “chain-cutting” ceremony that drew more than 100 people, as well as a new sign erected in front of the Muskegon Mall sign at the entrance to the south parking lot that reads: “Coming Soon — A New Downtown for Muskegon.”

“We believe the incarnation of downtown which will rise on this site will be a lasting incarnation,” McGuigan said. “This downtown will be our legacy as we move forward in this millennium and I believe the partners in this development will assure a source of pride and beauty, and lasting value will be created.”

A study the Paul C. Johnson Foundation commissioned last year determined the “urban village” concept was the potential best use of the land. To help the redevelopment, the development group has applied to the City of Muskegon for a tax-free Renaissance Zone designation for the mall property.

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