Regency Square Mall: A decade of decline

A company controlled by Namdar Realty Group bought the shopping center 10 years ago. Soon, just four tenants will remain open within a space that once held more than 100.

Trash containers are positioned to capture rainwater leaking from the ceiling at Regency Square Mall.
Trash containers are positioned to capture rainwater leaking from the ceiling at Regency Square Mall.
Photo by Karen Brune Mathis
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It was 10 years ago, in February 2014, that a New York-based investment group bought most of Regency Square Mall, which opened 47 years before to become the area’s first large enclosed regional mall.

Developed prominently at Atlantic Boulevard, Monument Road and the Arlington Expressway, Regency Square commanded the area’s retail attention.

Times changed.

Just as Regency siphoned shoppers and stores from Downtown, new centers in growing areas of the city did the same to the Arlington mall.

The entrance to Regency Square Mall at 9501 Arlington Expressway,
Photo by Karen Brune Mathis

The decade has been rough on the mall as well, as more retailers left and owners eventually racked up more than $1 million in city fines for code compliance issues.

Today, the struggling center at 9501 Arlington Expressway is under contract for another sale to a Lake City developer, which is in due diligence for the purchase.

The seller and the prospective buyer have not commented in recent weeks about the status of the sale or plans for the property.

A decade of decline

Regency Realty LLC, a partnership of Mason Asset Management and Namdar Realty Group LLC, both based in Great Neck, New York, paid $13 million for the bulk of the 1.4 million-square-foot mall Feb. 14, 2014. 

The buyers were Regency Mall Realty LLC (45%), Regency CH LLC (45%) and Regency Nassim LLC (10%).

Property records show the group now owns almost 74 acres and about 980,200 square feet of retail space at the mall. 

The property is assessed for tax purposes at $6 million.

The buyers did well in the deal.

The 2014 purchase included the AMC Theatres property, which Regency Mall Realty then sold a year later to a Kansas City investment group for $26.2 million.

The sale was more than double what Mason and Namdar paid for the entire property, which indicated it made its money back and more.

Regency Mall Realty made another $7 million in 2016 when it sold the former Belk department store to Impact Church of Jacksonville Inc., which operates in the space.

Impact Church, the Dillard’s Clearance Center and the former Sears store at the west end of the mall have separate owners and don’t appear to be part of the new deal.

The mall stretches east to west, with the former Belk roughly in the center. JCPenney anchored the east side with Sears at the western end.

The enclosed eastern side of the mall, the only part that Mason and Namdar have kept open, has five tenants that are regularly operating.  JCPenney closed in 2020.

Mall visitors have two entrances – the main one facing south, and the food court in the back, facing north.

All that remains accessible to the public is a pathway from the main entrance, circling to the remaining tenants and the large food court, where only Tokyo Sakura was operating Feb. 27.

New Jersey-based Jimmy Jazz, which sells lifestyle, streetwear and footwear brands, is the last national chain open, but is closing March 9 to move to nearby Regency Plaza, where it expects to open March 28.

The remaining four inside tenants, all locally owned, are generally unsure of the sale plans and most about their own.

Rogers Jewelers inside Regency Square Mall remains open.
Photo by Karen Brune Mathis

Rogers Jewelers, Regency Health Foods, Regency Square Mall Dental and Tokyo Sakura  are are the last regularly open interior   tenants. Tokyo Sakura is looking for another location.

Cut & Stitch alterations and the Rhythm Factory event complex, with separate accesses and hours near the main entrance, also are unsure about the sale.

“I hope the new landlord understands the importance to the community,” Rhythm Factory owner Terry Butler said of the property.

She owns the business with her husband, Michael, and said they keep their property maintained.

They also are aware of the condition of the interior of east mall.

Corridors of empty, darkened storefronts to the former JCPenney and Belk stores are closed off by yellow caution tape.

Caution tape also guides visitors around barrels that collect water from holes in the ceiling, where piping, water damage and stains are visible throughout much of the main entrance area.

There also are “Caution Wet Floor” signs.

As of Feb. 27, an estimated 200 buckets and barrels, including 32-gallon Rubbermaid Roughnecks and small trash containers, are visible in the east mall, many of them grouped under holes in the ceiling.

A nonworking children’s train ride, as well as the colorful and sunlit food court, are reminders of the mall’s many days as a family-friendly destination.

The west wing from Belk to Dillard’s and Sears has been closed for years. International Decor Outlet intended to lease nearly 200,000 square feet of storefronts for sublease to others that sell home furnishings and home improvement products, but it did not open and ended up in litigation.

Regency Health Foods is still open inside Regency Square Mall.
Photo by Karen Brune Mathis

“It has been painful to watch what was once a gem in this community become tarnished by neglect. It has been a decade of disappointment,” said City Council member Ken Amaro, who represents District 1, which includes the property.

He is encouraged about the pending sale.

“If all goes well, I am optimistic that it will, the work will be transformative.”

There could be more activity.

Sears property owner Transformco Properties has listed its  building and 18 acres for lease or sale. Representatives did not respond to questions about the status or if it is associated with the contract to sell the main mall.

Among other uses, the JCPenney parking lot is leased to nearby used-car dealer Auto Boutique.

The Jacksonville Sheriff's Office relocated its Zone 2 Substation from the mall but continues to use some of the parking lot.

Current conditions

Regency Square’s conditions have been a target of lawmaker complaints and city code compliance.

Amaro and District 4 Florida Sen. Clay Yarborough have lodged complaints with the city and the ownership about the mall’s deteriorating condition.

As of Feb. 1, the city had five active cases with daily rolling fines that amount to $1.004 million.

Other than those, the city said Feb. 21 owners paid all of their recent citations totaling $1,630.

Citations for ordinance violations since Aug. 18, 2021, included:

Holes in the water-stained ceiling of Regency Square Mall near the closed children’s train ride area.
Photo by Karen Brune Mathis

The ceiling in unsanitary condition; ceiling has holes and cracks; roof leaking; mechanical ventilation system is inoperable or damaged; failure to repair holes and cracks in the ceiling; failure to repair ceiling to a sanitary condition; failure to repair AC system; failure to maintain the roof – leaking throughout; damaged ceiling due to the leak in the roof – throughout; ceiling in unsanitary condition – throughout; exposed electrical wiring; and damaged flooring – throughout.

The citations were issued to Regency Mall Realty LLC, Regency CH LLC and Regency Nassim LLC, the mall’s ownership group.

Yarborough’s Sept. 8 letter to ownership asked it to take action to fix “the current state of distress of the Regency Square Mall.”

In an Oct. 3 response to Yarborough, Namdar COO Dan Dilmanian acknowledged the sale:

“We value your concerns and we are pleased to inform you that we’ve finalized a contract for the sale of the mall,” he wrote.

“The new buyer is aware of the necessary repairs and will liaise with the town soon to address the issues.”

Namdar’s sale statement came days after Amaro said Sept. 29 that the community “is tired of the mall ownership.”

The mall owners issued a statement Oct. 2 that it is selling the center.

“The company has recently finalized a contract for the sale of Regency Square Mall. More information will be provided as the buyer’s identity becomes public,” said a statement from a representative of Namdar Realty Group.

The representative did not provide more information Oct. 2 about the identity or potential use of the mall under new ownership or when the sale would be completed.

Tokyo Sakura is the last business open in the Regency Square Mall food court. Others closed without removing their signs.
Photo by Karen Brune Mathis

In a November 2023 report on “zombie malls,” The Wall Street Journal reported that Namdar Realty and Mason “are among the most prolific purchasers of U.S. malls. They make money by buying malls cheap and keeping them going, even as town officials beg them to pull the plug.”

The newspaper reported that Namdar Realty and Mason said they have sold only 10 of the dozens of enclosed malls they have bought together since 2012 and that they currently own about 80 malls.

“Their business model exploits a counterintuitive tenet of retail real estate: Dying malls often take a long time to expire, but they can remain valuable assets even as they draw their last breaths,” the Journal reported.

The newspaper explained that malls typically sit on large parcels of prime real estate that often can be subdivided and sold in parts, sometimes at a value exceeding the purchase price of the mall, which happened with Regency.

The partners keep the malls open, the paper reported, but cut costs by appealing their property-tax bills and reducing expenses such as staffing and maintenance. 

They continue to collect rent from the mall’s remaining retailers and lease space to nontraditional tenants such as call centers, local small businesses, doctors’ offices and bounce-house venues.

The Journal said the strategy has paid off. It said that in June, Namdar Realty reported a gross profit of $86.7 million, up almost 8% from the same month the year before, according to securities filings with the Tel Aviv Stock Exchange, where the company’s bonds trade under the name Namco Realty.

What’s next

Lake City-based Blackwater Development LLC announced Oct. 16, 2023, it is the prospective buyer.

“Blackwater Development has entered into a contract to acquire the Regency Square Mall property,” President Rurmell McGee said in a statement that day.

“We are currently early in the initial phase of the due diligence process. Our primary objective at this juncture is to conduct a thorough assessment of the property and determine the project’s feasibility.”

"Ladies, if you get your paper first then wash your hands we will have less water on the floor it’s safer," says one of the signs in a ladies’ bathroom.
Photo by Karen Brune Mathis

McGee said Blackwater was working with the current mall ownership “in an effort to determine the necessary repairs needed for the existing structure and garner a full understanding of the outstanding code enforcement violations.”

He said then he expects the sale could close in the third quarter of 2024, indicating due diligence could take at least a year.

McGee declined comment Feb. 22 about about the status of the sale, referring to his October statement.

He said then that Blackwater looked forward to “the opportunity to collaborate with state and local officials, as well as engaging with the Jacksonville community, in an effort to create a comprehensive plan for the revitalization of the Regency Square Mall property.”

“I wholeheartedly believe that a property of this magnitude, combined with its historical significance, holds a pivotal role in shaping the future development and growth of this market,” McGee said.

Asked about specific plans, “It’s really too early to give a definitive answer but we believe this property best serves the market as a mixed-use development.”

McGee said he had no further statement “until we are further along.”

XERA Realty Inc. of Jacksonville is the broker for the buyer.

McGee was part of a previous effort to buy the property.

Redevelopment prospects surfaced in June 2020 when commercial real estate developer Rimrock Devlin, associated with Rimrock Development, also based in Lake City, said it had a contract to buy and redevelop the 77.11-acre property into mixed uses.

The deal didn’t close, but the vision showed what could happen with the site.

In 2020, Rimrock said the property could serve multiple uses.

Those include medical services, limited service hospitality, fulfillment centers, multifamily space, charter schools, banks, a convenience store, restaurants and retail, the developer said in a statement.

Rimrock Devlin did not say how the property would be repositioned or if parts of the mall would be demolished.

The developer said mall properties throughout the U.S. are experiencing declines in traffic as consumer purchasing habits changed over the past decade.

It said that created redevelopment opportunities because many mall properties are “in the heart of densely populated retail corridors where people live, work and play.”

“It’s not often that you find a 70-plus acre tract of land in the heart of a community surrounded by rooftops, local businesses and national brands with frontage on a main thoroughfare encompassing over 100,000 passing cars each day,” Rimrock Devlin said.

Regency Square Mall at Atlantic Boulevard, Monument Road and the Arlington Expressway.
Photo by Karen Brune Mathis

Rimrock Devlin said the mall is central in the Jacksonville market because it is a 15-minute drive to Jacksonville International Airport and the Beaches, not far from Downtown and 10 minutes from St. Johns Town Center.

McGee’s LinkedIn page shows he was with Rimrock Development and Rimrock Companies from 2013 through April 2022, most recently as vice president of retail development.

McGee said Micah Linton, manager and agent of Rimrock Companies LLC and Rimrock Development L.L.C, is not part of Blackwater Development or the current Regency transaction.

The past to the present

Regency Square Mall called itself the largest shopping center in the Southeast when it opened in 1967. 

The original developer was the Regency Square partnership, led by the Martin E. Stein family of Jacksonville.

It opened with 50 stores expanded to more than 100 department stores, boutiques, specialty retailers and food vendors.

A satellite image of Regency Square Mall, with the closed Sears at the far left and the closed J.C. Penney at the far right.

The center doubled in size in 1981-82 and added more space in the early 1990s.

In 1991, Regency Square sold the property to an entity that became controlled by General Growth Properties of Chicago.

The Stein family took shopping mall developer Regency Centers Corp. public in 1993 and that company had no ownership in Regency Square.

General Growth went through Chapter 11 bankruptcy reorganization in 2009 and 2010.

By February 2013, General Growth said the mall had been “transferred to the special servicer,” which was trying to renegotiate the loan on the property.

Regency Mall Realty then bought the property from General Growth Properties in 2014.

About the time of sale, General Growth reported that occupancy at Regency Square had fallen from 60.1% at the end of 2012 to 37.9%.



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