Gardner Co. of Salt Lake buys Boise Mall, plans changes
Boise Factory Outlets, which has struggled to attract retailers and customers for most of its 28 years off Interstate 84 in East Boise, has been sold.
The Gardner Co., who constructed the 18-story Eighth & Main building in downtown Boise, is the new owner. The Salt Lake City company is a major Treasure Valley developer with an office in Boise.
After selling several buildings in Salt Lake City, Gardner sought an acquisition that would allow him to defer taxes through a so-called 1031 Exchange, permitted by Internal Revenue Service rules. Under the U.S. tax code, investors who sell real estate can avoid capital gains tax by guaranteeing the sale proceeds with a 1031 exchange company, and then using that money to buy another. property. 1031 refers to the section of the tax code that allows it.
“And that kind of match does the trick”, David Wali, Gardner executive vice president, said Monday by phone.
In the long term, the company plans to develop the property, he said. It is unlikely that there will be a mall left.
“It could be as simple as modifying existing buildings to accommodate users who want to be in this area and need light industrial buildings or flexible offices,” Wali noted. Commercial development lends itself to such uses, “because they need a lot of parking space and they need square footage.”
Wali said he had previously heard from tradespeople, including electricians and tilers, interested in the space in the mall.
“They need a warehouse, but they don’t need to stack things 35 feet in the air, and they don’t need 25,000 square feet,” Wali noted. “They need 5,000 square feet and there aren’t a lot of places that allow you to park trucks and have easy access to the whole valley.”
Accommodation is not likely, but Wali does not exclude it. A development agreement for the mall when it is built excludes housing, he said. There would also be zoning issues due to the proximity to Boise Airport, he said.
“But stranger things have happened,” he said.
Profitable shopping centers, Wali said, are owned by companies that have 10 or more across the country. These businesses already have relationships with retailers who use malls, and it’s easier for these owners to persuade one business to move into another. When you only have one mall, it’s hard to attract these businesses, he said.
“You have to stop trying to force a square peg into a round hole and figure out what would work there and go in that direction,” he said. “You’re not going to get national retailers to go there when there’s still room at the Village at Meridian. “
The $ 12 million mall – built on 22.3 acres off Gowen Road and I-84 – open the day after Thanksgiving in 1993 with great expectations. Boise Towne Square Mall had opened five years earlierand the retail business was booming. Twenty-four businesses occupied 76,000 square feet.
S-sixteen, an investment arm of JR Simplot family, built the shopping center in partnership with Quality Centers, a florida company that had built 14 other malls, including one in Post Falls in northern Idaho.
Sales were brisk. By the mall’s first anniversary, 14 more merchants had opened. The property, with five buildings, has 162,000 square feet.
The glitter didn’t last. An Idaho statesman in 1998 the story described “five years of poor sales and crowds”. At the time, mall managers hoped that the upcoming opening of a Coldwater Creek clothing store and Idaho IceWorld the nearby ice rink would revitalize the shopping center.
They did not do it. Within a decade, the number of stores had fallen to 27. In 2012, only 16 stores were operational.
Today there are only two stores left: Eddie Bauer and Pendleton. Trinity Learning Center, a child development program; Graffiti Fitness Club, and a Jazzercisestudio also operate there.
Boise Factory Outlets doesn’t even have a website anymore.
The mall has been passed by a series of owners. None have been able to create a major business destination.
S-Sixteen bought quality centers 50% interest in 1996 before selling in Portland Canterbury Real Estate Servicesfor $ 7.6 million in 2001.
Idaho Property, a company created to hold real estate investments for a Les Schwab Profit Sharing Retirement Trust, owned the mall property from 2008 to 2015, according to Ada County Appraiser’s Office records.
WYSE investment services from Portland bought the mall in 2015 and that year offered it for sale for $ 3.5 million.
VPS3 LLC, in Vancouver, Washington, company, bought Boise Outlets in january 2016 from a private lender who had foreclosed on the property. VPS3 is a subsidiary of Colson and Colson Construction Co., from Salem, Oregon, that builds retirement communities.
Colson and Colson, the last owner before Gardner, failed to rent the open space.
Boisedev.com first reported the sale.