The struggling Fairgrounds Square Mall in Muhlenberg Township will be demolished, the result of changing shopping habits as more consumers turn to buy goods online.
About 70 percent of the mall will be demolished, while Boscov’s, Burlington Coat Factory, the AMC movie theater and several other businesses outside the indoor mall will remain open, according to Hull Property Group, the mall owner based in Augusta, Ga.
The stores inside the mall will close this month, the company said.
Hull bought the 750,000-square-foot mall on Fifth Street Highway in April 2016 for $1.16 million.
Fairgrounds Square opened in 1980 during the heyday of indoor malls but, like malls across the country, has struggled.
John Mulherin, senior vice president of government relations at Hull, said it no longer made sense for the stores inside the mall to remain open.
“We are working with the local municipality for planning forward,” Mulherin said.
“We think the best plan is to demolish about 68 percent of the mall and come back with another type of development, but there a lot of other issues we need to work through with the municipality to make that happen,” he said.
Mulherin said although the township offered a Local Economic Revitalization Tax Assistance financial incentive plan that he said was “very gracious,” it doesn’t work for this particular type of development because they do not have an end user in mind.
“This would be a speculative redevelopment, and we need some other type of incentive do to that,” he said.
“We think it’s a very good property. There’s a very successful Boscov’s store, a very successful Burlington store and a very successful movie theater and a little farmers market. But the retail there is not successful in the configuration we have.”
Mulherin said the priority is to remove unleasable space and then create a retail offering and configuration that is successful, and can attract other businesses and redevelopment.
“It’s all market-driven. It’s no different than selling your home. You need to create the right curb appeal. No one is going to make a multimillion dollar investment,” he said. “We have to eliminate the failure so that it will open the corridor up to many other types of opportunities.”
Muhlenberg Township manager Jamal Abodalo said the mall is on a prime location on a busy corridor that gets an average of daily 28,000 vehicle trips each way. He said the site could be ideal for entertainment, a hotel, high-end apartments or health care.
“Our township is very business friendly,” Abodalo said.
“We would like to see something that would be well received by the immediate community and that would be complementary to the existing commercial uses. We also are looking at the future and to see how we will be able to stay sustainable.
“We would be willing to work with the developer to see something happen there.”
The township plans to revamp a portion of Fifth Street Highway between Belleview Avenue and George Street by improving traffic flow and walkability.
Hull is working with the township to upgrade the AMC movie theater, improving the existing pylon signage on the property and repairing the damaged asphalt on the mall’s ring road.