The owner of the Imperial Mall now has until 5 p.m. March 29 to fix any code deficiencies.
A representative of the Nebraska State Fire Marshal’s Office told the Hastings Tribune Thursday her office granted the Namdar Realty Group of Great Neck, New York, its request to extend the deadline to fix code deficiencies, which includes replacing ceiling tiles, updating the sprinkler system and emergency lighting. Alyssa Sanders, deputy state fire marshal and public information officer for the Nebraska State Fire Marshal’s Office, said if the issues are not fixed in full by March 29, the building will be closed to the public until the repairs are made.
Current mall-property tenants include Lifehouse Church, Children’s Museum of Central Nebraska, Napoli’s Italian Restaurant, CrossFit Ground Up, and Pizza Hut (located across the parking lot on the property).
The Fire Marshal’s Office conducted its five-year inspection in January, found multiple code violations and gave mall owners a deadline of Feb. 22 to fix the violations, followed by an extension.
Mayor Corey Stutte said Wednesday afternoon the Fire Marshal’s Office told Namdar March 8 it would shut down the mall March 12 if Namdar didn’t come up with a plan of action by March 11.
Stutte said a Namdar representative called Hastings Development Services Director Don Threewitt on March 1 to say Namdar planned to shutter the mall at the end of March.
“We had a conference call (on March 4) to at least try to buy 60-120 days for the tenants and that way maybe we could work through some sort of CRA acquisition,” he said, referring to the Community Redevelopment Authority.
The city then held a tenant meeting on March 6.
Just before that meeting, Threewitt heard from a Namdar representative who said the company had valued the property at $100,000 per acre, which would be $3.3 million for the 33-acre property, or about three times what Namdar paid for it four years ago.
“Even bare dirt around here would be $10,000 (per acre) at the most,” Stutte said. “That’s a problem when you start to look at it. We said no, obviously, that’s a non-starter. We’ve been throwing out that $200,000 number for a few calls. That’s about the best we can do because we’re going to have to carry the costs on this and it’s going to be a real bloodsucker for the CRA.”
He said the mall is averaging $15,000 each month in expenses while only receiving about $8,500 in revenue through tenant rent.
The February utility bill was $19,000 for a building with 40 empty bays.
“Unfortunately, it’s going to be up to Namdar in what to do,” Stutte said. “We’ve given it our best locally to figure out a solution. The seller doesn’t want to sell. They valued it way too high, and then you look at their inability to negotiate on it, as well.”
Stutte said Namdar had offered to lower its selling price to $1.5 million.
“That’s probably how much it would cost to raze the site,” he said.
The city has been negotiating with Namdar for a couple years to find a solution for the future of the dilapidated building. Namdar has owned the building since summer 2015, purchasing the building in an online auction for $1.050 million.
Namdar did not respond to an interview request from the Tribune on Wednesday.
“What we’re trying to do is protect the tenants,” Stutte said. “The tenants are out there. They need to have a place to have their businesses.”
City representatives hoped to discuss local acquisition during discussions with Namdar in December.
The lease for K-Mart, which paid more than $30,000 per month, expired at the end of 2018. K-Mart closed in August 2016.
No local developers have expressed an interest for in the building as a whole because of the expenses involved.
Stutte said roof repairs would cost around $1 million. There are about 40 heating and cooling units that need to be replaced and mold issues in the building.
“So there are a significant amount of issues if you were to redevelop the property at all,” he said.
The thought process, Stutte said, was that the CRA could obtain the building from Namdar for about $200,000, with the caveat that existing tenants be allowed to remain in the building.
He said even if Namdar wanted to go with the $200,000 offer, the CRA would have to take a hard look at if it even makes sense with the carrying costs. More evaluation would have to happen before a deal would be done.
He said there is potential to parcel out different portions of the mall.
Johnson Imperial Homes has offered space at Cimarron Plaza to help bridge the tenant situation.
Mark Hemje, JIH chief financial officer, said if Johnson Imperial Homes can help and there’s JIH-owned space that would fit mall tenants, then JIH would be more than happy to talk with those businesses and organizations.
“Obviously we have commercial and retail space, so anything we can do to help, If those folks need to find a new location, if things work we’d sure like to help them if we could,” he said.
However, until mall tenants find their direction there’s not much Johnson Imperial Homes can do at this point.
A Napoli’s representative said Thursday morning the restaurant still has a lease for its space in the mall and directed questions about the restaurant’s future in the mall to mall manager Marian Turner.
Turner said she has not had a lot of communication with Namdar.
She has not be part of any discussions about future locations for existing tenants if the mall does close.
Like the Napoli’s representative, Turner said she and most mall tenants are just carrying on as business as usual until they hear otherwise.
All mall tenants wish the building had more traffic. Turner said Namdar hasn’t accepted any business representatives who wanted to open a location there because Namdar would have to do repairs.
“The thing that we keep hearing is we wish there was more stores, but the thing of it is there are so many repairs that need to be done,” she said. “There’s a few empty spots that are large that several stores could go in, but otherwise people are just doing their business day to day.”
He said the city tried talking Namdar into gifting the mall to Lifehouse Church, which Stutte said Namdar told him was a non-starter.
“Unfortunately, I don’t have a lot of answers,” he said. “It’s hard to negotiate with people that don’t want to be reasonable and negotiate.”