Plaza Fiesta tenants unnerved by new lease

earriero@charlotteobserver.comNovember 27, 2013 

A proposed change to leases at Plaza Fiesta Carolinas near Carowinds in the Fort Mill area has some vendors concerned about the future of the shopping mall, which was reborn as a destination for the region’s growing Hispanic population in recent years.

The lease agreement, which was circulated last week, allows tenants and landlords to terminate a lease after Dec. 31, provided they give 30 days’ written notice to the other party.

Some vendors at the mall, which is also known for its specialty shops and large indoor playground, said they’re not going to sign the agreement.

“They said you can break your lease if you want to, but I don’t want to break my lease,” said Gold Y, owner of 5 Star Nails. “If they kick me out, OK, then I’m out. But I’m not leaving on my own.”

The Observer spoke with seven vendors at Plaza Fiesta over the course of a week, all of whom expressed concerns about the mall’s future, especially because of the lack of foot traffic on weekdays and turnover in ownership in the last several years.

Cheryl Baizan, chief financial officer of the mall’s current owner, Miami-based Rialto Capital Management LLC, declined to comment on the property. Observer calls to Rialto’s general counsel Liat Heller were not returned.

Last week, a representative from the Nichols Co., which does all leasing for Plaza Fiesta, visited the various vendors to deliver the addendum. The Nichols Co. and company owner John Nichols did not respond to multiple requests for comment.

Louretta Wall, Plaza Fiesta’s property manager, said she walked around with the representative because most of the vendors are more familiar with her.

“There are business transactions going on above me,” she said, declining to provide specifics.

“But everyone’s leases are still active,” she said. “I think a lot of them are panicked because of the uncertainty of this property.”

Wall added that she’s continuing her regular activities, noting that the mall plans to put up its Christmas tree overnight on Thursday so it’s ready for shoppers on Friday. And Santa Claus is expected to visit Dec. 15.

“Nobody’s trying to clear this place out or anything like that,” she said.

Wall estimated that tenant numbers are in the 60s. That’s down from about 120, according to a 2009 Observer story.

Garth Dunklin, a Charlotte-area attorney who is not involved with Plaza Fiesta but who specializes in commercial real estate, said an addendum to a lease that might seem like a big deal on its own might “turn out to be rote and really nothing at all” when considered within the context of the original agreement.

And Wall said the addendum may even be beneficial for some vendors on long leases because it means they can get out of their contracts earlier if they want to.

But several vendors said their leases have expired and they’re operating without any official contract with the Plaza Fiesta property manager.

Plaza Fiesta, which is visible from Interstate 77, has 253,914 square feet of space, according to Andrew Jenkins with KARNES research group. A recent flier advertised that 57,000 square feet were available for leasing.

Jenkins placed the vacancy rate at Plaza Fiesta between 11.8 percent and 22.4 percent. He said he gave a range because he isn’t sure he has received the most up-to-date information from Plaza Fiesta.

Referring to ownership changes over the years, he added: “To be fair, it’s gone through several transitions.”

In comparison, other locations with the same “community center” label across York County had a vacancy rate of 5 percent during the second quarter.

Ownership changes

The facility also has had several owners over its lifetime. It originally opened as CrossRoads Mall/Outlet Marketplace in the mid 1990s. Then in 2007, Capital City Development of Atlanta purchased the struggling property, planning to create a Latino-themed shopping center.

Houston-based Boxer Property managed Plaza Fiesta for more than a year, after the shopping center went into foreclosure. The lender, BB&T, hired Boxer to run it after taking control of the shopping center.

Then in 2011, Miami-based Rialto Capital Management LLC purchased the property for $6.35 million, public records indicate.

Karla Loaiza, who has owned Best Buy Soccer in Plaza Fiesta for nearly six years, said many vendors have grown disenchanted. The mall used to draw large crowds all week long with the help of such celebrations as Mexican Independence Day, but traffic has dropped off during the week.

Still, the shopping center draws major crowds on the weekends, with parents attracted to the Happy Zone, the largest indoor playground in the Carolinas.

Gold Y, the nail salon owner, said she is frustrated with the uncertainty around the mall, especially given that she has invested thousands of dollars creating her nail salon.

Given that, Y said she doesn’t have any intention of leaving anytime soon. Instead, she plans to keep a close watch on some of the mall’s anchors, such as the Bass shoe outlet.

Crystal Hollingsworth, a manager with Bass, said the store has heard rumors around the significance of the addendum. But, she added, “until we hear something from corporate, it’s business as usual.”

Staff researcher Maria David and staff writer Ely Portillo contributed.

Arriero: 704-358-5945; Twitter: @earriero

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