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Development company looks to expand revamped Shops at Kanawha

Executives at The Shops at Kanawha are looking forward to future improvements following a corporate restructuring that helped bring the Kanawha City mall back from bankruptcy earlier this year.

"It's really a new day for the shopping center," said Donald Simpson, a managing partner in the new company that owns the mall.

Simpson has a long history with the shopping center. His Johnstown, Pa.-based Simpson Properties Inc. began managing the mall, then known as the Kanawha Mall, in 2002.

He and a group of investors formed KM Associates LLC, which bought the mall for $11 million in 2007 with the idea of reconfiguring it from an enclosed mall to an open-air center with storefront parking.

The mall never closed during complex construction, which ended up taking longer than expected. During the renovation, the country fell into its worst recession since the Great Depression, leading retail chains to cut back expansion plans.

KM Associates filed for Chapter 11 bankruptcy protection last January in order to restructure its corporate ownership and debt, which at that time was listed at $26.5 million.

Earlier this year, Simpson, joined by a new team of investors - local businessmen Mike Thompson, Arno Paas and Joe Orlandi - to reorganize the mall into a new company, The Shops at Kanawha, LLC.

The Shops at Kanawha, LLC purchased the shopping center from KM Associates for $18 million, according to documents filed in bankruptcy court. KM Associates did not get any cash proceeds from the sale; the purchase simply covered $18 million worth of debts owed to lenders.

With the refinancing and restructuring out of the way, Simpson said the new company can focus on continuing with the improvements that began when the mall converted from an indoor to open-air facility.  

"The focus now is finishing the job and improving some of the operational challenges we face, such as the parking lot, signage and lighting," he said.

Simpson said he wants to make it easier for people to get in and out of the mall area, while also making the space between the shopping center and MacCorkle Avenue more attractive.

"I want to change the entrance to the mall," he said. "We would like to address the throat that comes into the mall."

Simpson said the mall has performed well over the last year. Seven new stores have either opened or signed on to open in the area, including Kelly Services, White Insurance, Orange Leaf frozen yogurt and Shabby Chic children's boutique.

Firehouse Subs, a national sandwich chain, opened its new shop on Wednesday and was enjoying steady traffic during its first lunch hour.

"It's always exciting when a new tenant opens, especially when it's a restaurant that everyone in the shopping center can visit," Simpson said.

The Spirit of Halloween costume shop run by Spencer Gifts also recently opened in a 9,000 square foot space. The seasonal store, which had been in the Charleston Town Center in recent years, will operate for the 60 days around Halloween but still offer a significant boost to the mall.

"They pay the equivalent of some of the permanent tenants' annual rent in two months," Simpson said.

The Massage Envy Spa is also expected to open a new store in the mall by mid-November.

The mall currently has about 250,000 square feet of storefront space. Simpson said about 95 percent of that is currently leased with negotiations underway to fill the rest.

He said when the Spirit of Halloween closes down in November, he's considering breaking that 9,000-square foot store into two or three smaller spaces to attract more tenants to the area.

"I think there's the need for us to continue to expand the tenant mix here," Simpson said. "The more services we can offer, the more desirable the shopping center becomes for the residents of Kanawha City."

Marilyn Bowles, who has been property manager at the mall for the last eight years, said the state Division of Motor Vehicles offices, which moved to the mall in 2003, has provided a stable customer base over the years.

The DMV has 250 employees working daily at the mall, and the regional office brings in new customers every day.

"It's a huge function to have the DMV here," Bowles said. "Everybody goes to the DMV - everybody."

Simpson said the existing stores are seeing healthy sales growth.

"At this point, almost every tenant operating now is profitable and seeing sales increases," Simpson said.

He credited the local community for supporting the mall, even as it was going through its construction phases.

"I do believe there is an allegiance for this shopping center from the local community and that we have benefited from it," he said.

Looking ahead, Simpson said the company is looking at attracting new business to locate in areas between the mall and MacCorkle. He said there was space on either side of Applebee's that could be converted into new restaurants or other businesses.

Simpson said he and his new partners - Thompson, Paas and Orlandi - are looking forward to continuing to grow the mall in the coming years. He said he thinks he has the right team now to accomplish that goal.  

"Joe and Arno and Mike are all real estate savvy businessmen, so there's a tremendous amount to be gained from their input," Simpson said. "They are guys that visit the center regularly, offer up ideas on improvements, have a host of local contacts to get services done.

"There's some really good stuff on the horizon that we'll be announcing hopefully relatively soon," he said.

Contact writer Jared Hunt at or 304-348-4836.




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