See the former St. Louis Mills mall transform from shopping center to industrial park (Photos)

The construction to convert the former St. Louis Mills shopping center in Hazelwood, Missouri into an industrial park has begun. The interior is beginning to look more like that of a warehouse than a mall.

Industrial Commercial Properties (ICP), a new mall owner based in Cleveland that specializes in converting aging former malls to industrial space. This is in part because of the boom in e-commerce.

Chris Salata, chief operating officer of the Ohio-based company, said that the Ohio firm has so far invested around $30 million into the project within the mall located at 5555 St. Louis Mills Boulevard, which will become Hazelwood Business Park.

Hazelwood has approved a redevelopment contract that outlines an area of 180 acres for redevelopment. ICP bought the majority of the 145 acre mall property in October for $3.3 Million, which included the 75 acre mall.

ICP has already increased the size of its business park. It will now cover 1.2 million square foot -- the entire interior space of the mall, except for the Cabela’s store and Ice Zone ice-rink, which continue to operate under separate ownership.

The developer, Big Sports Properties, had planned to fill about 40% of the space with the $55 million PowerPlex, a youth sports complex. However, due to the rising interest rates and increased industrial demand, they were unable to reach an agreement on the long-term terms. Big Sports is looking for alternative sites to house the PowerPlex.

Big Sports has been developing its plan for the destination of youth sports since 2018. According to city documents, most of the stores in the mall closed around 2015. The $250 million "mega mall" opened in November 2003.

Who will be the new tenant of the mall?

Salata stated that although no tenants have been signed yet for the business park, ICP hopes to move their first tenant into the shopping mall by the fall. He said that the company is currently in talks with 10 tenants, who range in size from 30,000 to 150,000 square foot.

The mall already looks more like an industrial space, as the vibrant colors have been replaced with a gray shell. Salata explained that ICP is leading the construction project with local subcontractors. However, a general contractor from the local area will be hired when tenant build-outs begin.

Salata stated that construction has moved on from the painting and demolition phases to the installation of the indoor sprinkler systems. The next major project will be to resurface the parking lot, upgrade the lighting and overhaul the entrances and access points.

Salata is confident that the open spaces and ample parking in the mall will draw light industrial and manufacturing use, as seen most often in the other six former malls converted by the company. Salata says that the attractiveness of converting a mall into industrial space is the ability to have the office area in front, and the industrial or manufacturing space at the back. This is similar to a retail store, which has a front area, and a back room.

Salata stated that it is hoped the mall's indoor space will be able to accommodate between 10 and 12 businesses. He said that with the flexibility of the mall, users could choose the exact square footage they wanted and not have to pay extra because the space is built in.

The mall's large footprint gives us great flexibility in how we (divide) space for multiple tenants. He said that we are able to rightsize the space so that businesses can run efficiently. We have a huge footprint, so the square footage of our space is not an issue. The ceiling heights are above 20 feet. There is plenty of parking and the location is excellent. It's really appealing to me that I can grow the space in the future because of its large footprint.

What is the PowerPlex area?

Salata stated that ICP has no plans to develop any of the land surrounding the mall.

This could change in future. The expansion of the industrial park will increase the number of jobs at the former shopping mall, which may lead to the development of certain outparcels of the mall with restaurants and other uses.

Hazelwood City Council approved Chapter 353 tax incentives in March for the 18-year project. The city has also agreed to offer up to 35 million dollars in industrial revenue bonds, which will provide a tax exemption for construction costs.

ICP is required to pay PILOTs (payments in lieu of tax) based on the square footage of the building for the duration. During the first decade, ICP will also pay property taxes equal to the assessed value and base property tax of the property from the year prior to ICP purchasing the mall. In years 11-18, the developer pays property taxes based upon the current tax levy plus 50% of the assessed land value and improvements.

The redevelopment agreement did not include a figure for the reduction.

The developer agreed to pay special assessment payments that are equal to what the city would have to pay to the Robertson Fire Protection District due to an increase in assessed value of the mall from the development. Hazelwood agreed to pay the RFPD payments when the city annexed properties within the district's service area. Now, the city is making payments that are deemed unsustainable.

Matt Zimmerman, the City administrator, said that the city had talked about incentives with PowerPlex developers for years but, no money has ever been provided to the PowerPlex project.

According to city filings, ICP's abatement starts separately for each tenant and lasts 18 years.

Salata, without providing details, said that ICP intends to use the incentives to lure tenants to the mall. The incentives will allow for "very competitive rental rates". He believes that these rates will be comparable to those offered by other new construction buildings.

Salata stated that 'we're able provide the market price which will be very appealing to them due to our base'. I think that the price is right for many of these users.