Reviving Retail: Inside Park Plaza Mall’s Transformation (Arkansas Business)

March 4, 2024 - If walking comes before running, Little Rock retail landmark Park Plaza Mall is back on its feet under new ownership and management.

Auctioned in a November 2021 foreclosure sale and sold again to Florida investors nearly a year ago, the 400,000-SF midtown shopping mall has a new skin, a new community health partnership with nearby CHI St. Vincent Infirmary and even a rejuvenated mall-walkers club.

Second Horizon Capital of Boca Raton bought the distressed mall for $25.2 million last year and engaged Jones Lang Lasalle of Chicago to manage the mall and handle leasing.

“We viewed it as an attractive investment opportunity,” Howard Levine, a managing partner of Second Horizon, said in a recent interview. “We certainly have to run our steps to execute on the investment.”

Those steps include long-term revitalization of property, reinforced maintenance and security teams, and a sharp focus on local partnerships and community engagement.

In the past nine months, Levine and partner Camilo Varela have replaced the mall’s exterior facade, repaired tiles and improved the site’s appearance and cleanliness.

JLL has stabilized its occupancy at 90%, equal to where it was when Levine and Varela announced the mall’s acquisition in March 2023.

The mall space is sandwiched by two Dillard’s Inc. flagship department stores to the west and east. Dillard’s owns its own land and parking spaces. Second Horizon has the 11 acres in between, including big sites for H&M, Forever 21, Melissa Furniture Design and Victoria’s Secret. Second Horizon’s retail space is 268,000 SF.

“We’re very focused on transforming the assets of Park Plaza, on giving the community a resilient economic catalyst,” Varela said. “We’re dedicated to the vision [of a community hub], and we’re in year one of a long-term revitalization.”

Levine said Second Horizon has developed “programming that enhances the quality of life for people” in Little Rock and the region.

Food, Blood, Hogs

Park Plaza has hosted a food giveaway with Arkansas Food Bank after the March 31 tornado, a pep rally for the Arkansas Razorbacks with the Little Rock Regional Chamber, blood drives with the Arkansas Blood Institute, and community health events with CHI St. Vincent, among other initiatives.

“Since our acquisition, we’ve had more than 30 events with over 25 partners, and we continue to actively seek incremental opportunities and partners with local organizations throughout the region,” Levine said.

One goal is to provide a community focal point, and any retail center welcomes more foot traffic. A “touch a truck” event drew hundreds of families, and expanded holiday events featured shopping celebrations, giveaways and performances by community choirs.

“It’s bringing people back to that hub,” Levine said. “We view this as pretty significant growth, and we’re excited to continue that in 2024.”

Over the past six months, Park Plaza has added three new tenants: Eukivi Products, featuring skin, hair and wellness products; JD Sports, selling sneakers, clothing and accessories; and clothing outfitter Stated X Wild.

The mall is talking with potential new tenants, hoping to fill a food court vacancy and find a restaurant for the space last taken by Zoe’s Kitchen on the center’s south side.

Varela summarized Park Plaza’s recent physical improvements.

‘Food Court Upgrades’

“When we first acquired the property, it was clear that the center had a significant underinvestment [in infrastructure],” Varela said. “We replaced the facade, both north and south. We have upgraded the food court, improved parking lot safety and replaced tiles. We have done initial lighting upgrades and completed a general cleanup of the site. If you go to the site today, compared to going before our ownership, I think you’ll be able to see the difference.

“We have enhanced our maintenance team and implemented new operations standards and procedures.”

In December, the Institute of Real Estate Management recognized Park Plaza as a certified sustainable property, giving the mall visibility within the industry.

“As we look ahead, our continued focus is on enhancing now the shopper experience,” Varela said. “Our guests are starting to see the difference, and we’re excited. We had to take care of some things right away, and we have incremental projects that are going to continue to make the site better.”

Varela and Levine wouldn’t put a dollar estimate on Park Plaza’s revitalization so far, and they have no set timeline on continued improvements.

“We don’t want to divulge a specific number,” Levine said. “But we can say that it is both significant and just part of a multiyear project we’ve just started.

“It’s hard to put a pin on exactly how long things take,” Levine continued. “These are not quick recoveries, not quick transitions. Each center that reaches the point [where Park Plaza was a year ago], it took a while to get to be in the condition that it was.

“So it takes awhile to really go back to creating a long-term resilient foundation for the property. This is a multiyear transition,” Levine said.

Unique Solutions

Levine and Varela, real estate specialists who met on their first work day as associates at Bank of America in 2010, founded Second Horizon in 2021. They selected Park Plaza as their second retail project, after Stony Point Fashion Park in Richmond, Virginia.

They acquired a third property last year, Kingston Collection, a one-story enclosed shopping center in Kingston, Massachusetts.

Levine said each property is different, and each requires a unique approach to revitalization.

He doesn’t expect Park Plaza to lease space to charter schools, a phenomenon The New York Times featured in a trends story last month.

“From a future tenancy standpoint, our class is going to remain retail-centric,” Levine said. “The nature of retail has evolved and will continue to evolve. We expect to focus on retail, restaurants, food and beverage, entertainment and services. One interesting thing about Park Plaza is that it’s right-sized for the market. It’s not a humongous center with a bunch of vacancy. We have approximately 90% occupancy. We just want to support that by focusing on entertainment, restaurants and retail.”

Levine and Varela wouldn’t discuss Park Plaza’s revenue, other than to say it offered no surprises.

“What we’ve really been pleased about is the response of the people and organizations in and around Little Rock,” Levine said. “Dillard’s is a good neighbor. They own their own boxes but are committed to working together for the good of Park Plaza. We’ve been excited about the results we’ve seen so far, and we know we still have a lot of work ahead of us.”

View the article on Arkansas Business’ website here or as a PDF here.