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N.Y. firm to redevelop Tri-State Mall in Claymont

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The former Tri-State Mall is set to undergo redevelopment by New York firm KPR. | DBT PHOTO BY MIKE ROCHELEAU

CLAYMONT – Five years after the Tri-State Mall largely closed down, the former shopping destination near the Pennsylvania border is set for a major redevelopment by a New York-based real estate investment firm.

KPR, formerly known as Katz Properties, bought the mall from New York-based real estate investment firm The Lefrak Organization for $12.5 million in early June, according to county land records. Although the public has known The Rosen Group as the owner of the mall for many years, it hasn’t actually owned it since 1971, when the locally-known firm sold the mall to Lefrak for $9.5 million and leased it back long term to manage. Rosen signed a 25-year lease with three possible extensions, although the first executed extension was due to expire this summer.

Within days of taking ownership in June, KPR applied for county demolition permits for the former Levitz Furniture Outlet store, more than 12 years after the store closed following the brand’s bankruptcy liquidation. It’s set to start coming down on July 14, according to Larry Tarabicos, the local land use counsel working with KPR.

This former Levitz Furniture Outlet in Claymont will soon be torn down as part of a redevelopment project of the former Tri-State Mall. | PHOTO COURTESY OF WIKIMEDIA

“They did what they promised they would do if they became the owners,” Tarabicos said of the razing that has long been sought by county inspectors for concerns about its safety and structural integrity. “Right off the bat, clearing that site and getting rid of that ugly building gives some positive momentum there.”

The Levitz store won’t be the only piece to be torn down, as KPR is envisioning a complete site demolition and rebuilding, Tarabicos said. The long-abandoned former Wendy’s location just north of the Levitz will likely follow soon in demolition, he added.

The former Tri-State Mall has largely been used as storage for construction supplies in recent years but will soon be torn down and redeveloped. | DBT PHOTO BY MIKE ROCHELEAU

What happens to the entire 41-acre property after it’s leveled remains to be determined. Tarabicos said KPR should have firmer plans for the public regarding the property before the end of the year. Although KPR has frequently developed and invested in shopping centers anchored by a grocery store, Tarabicos said they have not determined whether that will be the case in Claymont.

“Long term, they are looking into a lot of different options in the marketplace right now, obviously. But there are no definitive plans yet,” he said.

Currently zoned commercial regional (CR), the property is positioned for retail, restaurant, hotel or offices. Any residential development would have to come as a mixed-use development, although KPR could seek a rezoning.

The community can be assured that the mall’s new owner won’t let the property sit stagnant for much longer.

“With a site like this, if you spend a lot of money to purchase it you’re certainly intending to build,” Tarabicos said.

The Tri-State Mall marks KPR’s first major investment in the First State – it previously invested in a single Rite Aid location in Dover.

“They’re great guys; I hope they do more,” said Tarabicos, a founder of leading local real estate firm Tarabicos, Grosso & Hoffman, LLP, who has been working in Delaware land use law for decades.

KPR has not yet said what it will do with the new development, but it has focused on grocery-anchored retail development. | DBT PHOTO BY MIKE ROCHELEAU

The acquisition of the Tri-State Mall comes at a time of revitalization for Claymont, led by the redevelopment of the former Evraz Steel Mill into a massive mixed-use development called First State Crossing right across the road from the mall. That 425-acre project, led by the St. Louis-based Community Development Company, includes light industrial, office, retail, and residential.

The redevelopment of the Tri-State Mall, which lies just east of the Interstate 95 ramp off Naamans Road, could restart an economic engine that catered to Pennsylvanians looking to take advantage of Delaware’s lack of a sales tax.

At 535,000 square feet, Tri-State was once Delaware’s fourth largest mall with approximately 50 shops. At various times it hosted Kmart, Burlington Coat Factory, Value City and even a movie theater, but in recent years the mall’s vast corridors have largely been used as storage for a housing material supplier New Hudson Facades.

“The demolition of the old Levitz signals a new era for the Tri-State Mall property. What will follow will be a transformation into new and productive uses that will help to revitalize Claymont and bring much needed jobs to the area,” Rep. Sean Matthews (D-Claymont) told his constituents in a Facebook post regarding the updates.

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