Mills out of Galleria complex
Zamias Services Inc. has assumed day-to-day management and leasing for the Galleria at Pittsburgh Mills shopping complex off Route 28 in Frazer.
The Galleria's majority owner, financially troubled The Mills Corp., has relinquished all interests in the mall and no longer has any participation in the $300 million, 1.1-million-square-foot "shoppertainment" complex.
The Mills Corp. transferred for an undisclosed price its financial stake in the Mills to Zamias and German private real estate company KanAm.
"As a retail center, the Galleria at Pittsburgh Mills offers the best of all worlds: a great location, ease of access and parking, superb retail offerings and a variety of dining and entertainment options," Zamias Chairman Damian Zamias said in a statement Friday.
It was the Zamias family, of Johnstown, who more than a quarter-century ago proposed an enclosed shopping mall in Frazer, then settled for a 25 percent piece of what became the Galleria.
The ownership change is a welcome move and a positive development, said Renee Bestic, an independent shop owner at the Galleria.
"We knew there was a rumor, but nothing was formally announced," said Bestic, who owns Lambs and Ivy, a high-end children's clothing store. "We knew it was Zamias.
"I definitely think Zamias will be a good fit," Bestic said. "I think it will improve the traffic flow into the mall. I know the development they have done on the outside of the mall is booming."
She was referring to the free-standing stores, such as Lowe's and Wal-Mart, opposite the main mall. Zamias next year will officially open the Village at Pittsburgh Mills, with 170,000 square feet of retailers including Best Buy, Michaels, PetSmart and Office Max.
The sale of Pittsburgh Mills will help ease The Mills Corp.'s financial problems, something the company has struggled with all year. The company has sold malls in Canada, Scotland and Spain for $981 million this year to reduce debt. It sold its stake in the New Jersey Meadowlands Xanadu complex, its biggest project ever, to Colony Capital Acquisitions LLC, a closely held Los Angeles-based real estate developer.
The Securities and Exchange Commission is investigating the company's accounting practices, and the firm admits it must restate financial documents dating back to 2000.
In April, the publicly held real estate investment trust revealed it had defaulted on millions of dollars of construction loans for Pittsburgh Mills and three other so-called shoppertainment retail complexes.
In June, upscale furniture store LoveSac Life relocated to Ross Park Mall from the Galleria, saying a move to a busier mall was the only way it could survive.
LoveSac Life opened with the Mills complex in July 2005. Franchise owner Dave Gerczak said Ross Park Mall had a better mix of tenants, better demographics in surrounding neighborhoods and more shoppers roaming its hallways.
"The traffic at Pittsburgh Mills has been very poor, and it seems to be worsening," LoveSac manager Brian Witherow said in a statement Gerczak distributed in June.
As The Mills Corp. struggled financially, Pittsburgh Mills, touted as an exciting alternative to the usual mall, struggled to differentiate itself from the competition. A promised NASCAR SpeedPark, 40,000 square feet of electric car racing, miniature golf, bumper boats, a climbing wall and other amusements, was canceled in May 2005.
A Sears Grand grocery-department store combination and an upscale bowling alley-restaurant/lounge known as Lucky Strike Lanes did open, but The Mills Corp.'s business success seen in other facilities appeared to be fading.