SpeedPark hits brakes

NASCAR SpeedPark, one of the much anticipated main anchors for Pittsburgh Mills, the $285 million shopping, dining and entertainment complex that opened in Frazer last July, isn't coming to the mall after all.

The loss comes as the mall's owner, Arlington, Va.-based Mills Corp. struggles with larger financial problems.

While day-to-day operations at Pittsburgh Mills apparently have not be affected by its parent's troubles, failure to land NASCAR SpeedPark is a setback for the massive enclosed mall.

It has been billed as a "destination" center breaking the mold of traditional regional malls, and its inclusion was to be its largest and most unusual entertainment attraction.

Preliminary site work already had begun for the NASCAR venue, which was expected to occupy a 40,000-square-foot area in the SportsStreet section of the mall. It would have brought electric car racing, miniature golf, bumper boats, a climbing wall and other amusement activities there.

"Despite our best efforts, NASCAR SpeedPark will not be part of the SportsStreet area of Pittsburgh Mills," said David Macdonald the mall's general manager. "A number factors prevented the project from moving forward, but we are aggressively pursuing other entertainment offerings for Pittsburgh Mills that our customers will enjoy."

Burroughs & Chapin Co., Inc., a Myrtle Beach, S.C.-based developer of tourism and entertainment facilities, is the licensee for NASCAR SpeedParks through a subsidiary.

Pat Dowling, spokesman for Burroughs & Chapin, said Mills Corp. officials have known that the replica car-racing venue wasn't coming, even before the mall opened last June.

"We told them (mall officials) in May or June of 2005 that we were not going to locate at Pittsburgh Mills," he said. "I'm not quite sure why they continued to promote the idea that we were coming."

He added, "We're doing very well in tourism markets, and we want to stop rolling out into other, residential markets while we tweak what we've got."

Mills' woes

The Mills Corp. has delayed reporting 2005 year-end earnings, faces a number of lawsuits of disgruntled shareholders, and has hired two Wall Street investment advisers to explore options for the sale of part, or all, of its assets.

It's troubles have local public officials and industry observers paying close attention to see what possible effect they could have on its operations.

"We're watching, but beyond that, there's not that much concern," said Lori Ziencik, township supervisor and secretary-treasurer. The township's offices are located in the Mills complex.

Ziencik said officials "enjoy their relationship with Mills Corp. immensely," and hope there are no changes in the offing.

At the same time, they are aware that it's not unusual for shopping malls, or entire companies, to change hands.

County: Mall financing safe

If that happens, there's little danger to a special tax incentive plan that helped facilitate construction of Pittsburgh Mills, said Maurice Strul, assistant director, special projects and finance, in Allegheny County's Department of Economic Development.

The county joined Frazer and Deer Lakes School District officials in approving a tax increment financing plan that deferred tax revenue to raise some $35 million for infrastructure to support the project, including an interchange to provide access to the project from Route 28.

"We have been in communication with them (Mills officials) and at this point, there are no concerns about the TIF," said Strul.

There are adequate protections built in to the tax-incentive plan to assure there will be sufficient funds to pay the debt service on bonds issued for the project, he said.

Not only does the financing agreement transfer obligation for the bonds to any new owners of Pittsburgh Mills and surrounding outparcels, the taxing bodies created a Neighborhood Improvement District that allows imposition of a special assessment as a back up in case expected increases in property values don't raise sufficient tax revenues to cover the debt service on the bonds.

Analysts see several options

Retail analysts have said its doubtful that Mills -- whose 42 malls total some 51 million square feet of retail space -- would sell the entire company.

However, speculation is that selected assets, such as its 18 more traditional shopping malls, might be attractive to companies such as giant mall developer Simon Property Group, of Indianapolis, said Rich Moore, an analyst with KeyBanc Capital Markets in Cleveland. Simon owns Ross Park, South Hills Village and Century III malls in this area.

Mills also has 22 so-called "shoppertainment" centers, like Pittsburgh Mills, which also feature a variety of outlet and entertainment tenants.

One concern is whether the company's financial problems may distract it from efforts to manage or continue development of some of its major projects, Moore said.

So far that has not been the case at Pittsburgh Mills, insists Macdonald.

"It's business as usual," he said, adding that the company has been pleased with the operations and occupancy.

Mills official: Vacancy 'not unusual'

A walkthrough of the main indoor mall (known as the Galleria at Pittsburgh Mills) this week found about two-dozen vacant spaces -- out of a total of about 140 -- that could house additional tenants.

However, that type of vacancy for a new mall is not usual in the industry, said Macdonald. The company expected some fallout, particularly among temporary tenants recruited for the recent holiday season, and he said it often takes a year or more to determine which stores find favor with shoppers.

Even so, the project has nine other major anchor outlets, including Kaufmann's, J.C. Penney, Linens N' Things, Borders Books and Music, Dick's Sporting Goods, and a 16-screen Cinemark Theater that includes the region's only commercial iMAX screen.

Tenants that made their debut in Pennsylvania at the mall include anchors Sears Grand, the Sears version of a Wal-Mart Supercenter, fashion retailer H&M, and Lucky Strike Lanes, a combination bowling alley and restaurant/lounge. Others include juniors clothing retailer Forever 21; 1950s-style diner Johnny Rockets and ice-cream chain Marble Slab Creamery.

Macdonald said the newest addition to the mall will be Brooks Brothers 346, which offers mid-priced clothing for men and women. The store is under construction near Entrance 2.

In addition, Mills has successfully sold all of the two dozen-or-so outparcels at the site, including spots where a number of restaurants, and such major stores as Wal-Mart and Sam's Club, already are open and drawing large crowds, said Joe Anthony, vice president of acquisition and development for Zamias Services Inc.

Collectively, the peripheral development, known as the Village at Pittsburgh Mills, is to contain 920,000 square feet of commercial space.

Zamias, the Johnstown-based co-developer of the Mills complex, late last year purchased a 20-acre parcel with plans to develop an 180,000-square-foot "power center" that will include about 10 tenants, including some big box retailers.

"This is a great project, and we continue to be excited about it,' said Anthony.

The main mall has been busy on weekends, but it's less vibrant during the week, Ziencik said.

She's heard some concerns about the absence, so far, of more unique-to-Pittsburgh stores, and some better known national retailers there.

"It may not have filled up as quickly as we would have liked, but it's not our business to run malls," Ziencik said.

Shoppers' impressions

A number of shoppers on Wednesday voiced mostly favorable comments, including LuAnn Durci of Bettendorf, Iowa.

"I think it is just fantastic. The Valley has needed something like this forever," said Durci, a native of Tarentum, who was joined by Laurie Prazenica, a Tarentum resident, on a visit there.

Both women said they liked the variety of stores, and particularly liked the mall being on one floor.

So did retirees Larry and Janice Vovaris of Leechburg and Nancy and Tom Rupert of Vandergrift, although they felt the stores were generally "geared to younger adults.'

But one frequent shopper who felt the selection should be improved was Carley Green of Upper Burrell.

"I think they need more women's clothes and teen stores," said Green, who found a local car dealership sales area inside the mall to be somewhat out of place.

"They should get rid of some things ... and bring in some bigger name stores," she said.

"It's really to early to tell (how the mall is doing)," said Bob Gold, a retail broker with CB Richard Ellis/Pittsburgh, a Pittsburgh-based commercial real estate firm.

On several weekend visits, Gold said he found the mall busy, including at the food court and movie theater.

But Gold also heard of some complaints, including from tenants, about the existing mix of retailers.

"One of the concerns is duplication ... too many tenants for certain kinds of merchandise, such as sports memorabilia," he said.

Ron DiParma is a staff writer with the Pittsburgh Tribune-Review. Valley News Dispatch correspondent Larry Seben contributed to this report.