The Walk outlet mall in Atlantic City has been sold as part of a $200 million, two-property deal with a North Carolina-based company, a filing with the U.S. Securities and Exchange Commission shows.
Tanger Outlets agreed May 6 to acquire “substantially all of the economic interests” in two outlet properties from Cordish Co. entities that developed and manage the sites, according to the document.
The Casino Reinvestment Development Authority owns the Atlantic City property on which the The Walk buildings sit. The CRDA leases the property to Cordish, which owns the buildings. The CRDA and Cordish entered into that arrangement before The Walk opened in 2003 — long before the launch three weeks ago of the Atlantic City Tourism District, which includes The Walk and is run by the CRDA. The SEC filing makes no mention of the CRDA.
Because the CRDA is a government agency and is tax-exempt, The Walk’s nearly $100 million worth of ratables is exempt from the city property tax rolls. It is unclear whether that will continue with Tanger.
The terms of the CRDA’s lease with Cordish do not prohibit the company from bringing in partners, the agency’s interim executive director Susan Ney Thompson said.
“I think it was a smart move to bring in ... one of the best in the business,” she said.
The SEC filing doesn’t specify how much of the proceeds will go toward The Walk, specifically, and Thompson couldn’t say whether the proceeds would help pay for future phases of The Walk. She did say, however, that Cordish intends to move forward with the fourth phase and anticipates meeting about those plans soon.
Tanger did not return calls and emails. Cordish refused comment beyond issuing a prepared statement from Gary Block, vice president and project director for The Walk.
Block referred to the transaction as the start of a “joint venture.” Tanger has a “controlling interest” in The Walk as it exists now, but Cordish will “retain 100 percent ownership of future development phases in Atlantic City, of which we expect there to be many,” the statement said.
“We are extremely excited,” Block said.
Along with The Walk, the transaction involves Cordish’s outlet site in Ocean City, Md. The two are the only upscale outlet retail stores in Cordish’s portfolio. Chains such as K-mart and Ruby Tuesday anchor the 19 remaining sites, Cordish’s website shows.
Cordish and Tanger plan to finalize the deal between July and September, the report filed with the Securities and Exchange Commission shows.
Meanwhile, construction continues on a nearby parking garage, part of the third of four planned phases at The Walk. The $45 million project — which includes much-needed public restrooms and a dozen more stores — was supposed to be finished earlier this year, but design issues caused delays. Officials with the CRDA now expect the garage to open in early 2012.
Tanger has bought the first three phases of The Walk.
Because Cordish isn’t publicly traded, the company doesn’t have to publish financial information. But Cordish Chairman David Cordish has said The Walk’s 90 stores take in more than $500 per square foot. That figure bests Tanger’s $364 average across its 34 properties nationwide, Tanger’s 2010 annual report shows.
Cordish has said previously that an entertainment-driven fourth phase is planned. Whether there will be a fourth phase remains unclear.
The first phase of The Walk opened in 2003 with 18 stores. An expansion three years later added another 80 shops. The first of the next 12 stores opened in April — all or most of the rest are expected to be open by Memorial Day.
On Thursday, shoppers and workers at The Walk said they hope the transaction yields more jobs and improves store selection as well as the parking situation.
Vashti Smith, of Bridgeton, prefers The Walk to malls closer to her hometown, but she said she is looking forward to having more stores to choose from.
“I’d like to see free parking for those who come to shop out here,” Smith said.
The parking situation affects employees, too, said Jess Pritchard, a manager at Reebok.
“We’ve been here six years and now they’re building a parking garage,” Pritchard said, adding employees who work at the store have to pay for parking when they come to work. She said any expansion could be beneficial.
Pair Hart’s Parking valet Charles Thompson agreed.
“Everybody needs a job,” the Pleasantville resident said. “If they bring new ideas and new businesses, it’ll help out the people.”
Staff writer Caitlin Dineen contributed to this report.
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