Valley Mall sold at a clearance price

November 19, 1997

Valley Mall sold at a clearance price



Staff Writers

HALFWAY - Valley Mall, the largest shopping complex in Washington County, was sold Tuesday to a Johnstown, Pa., company for a little more than $31 million - about half the price it brought in 1989, the last time it was sold.

Officials said shoppers probably won't notice a difference in the short term, but the county will reap $241,300 from the tax for recording the deed, according to court records. The county charges $7.60 for each $1,000 of sale price when deeds are transferred.


Crown American Acquisition Associates also will pay a $158,750 state transfer tax, which helps fund the Project Open Space program.

"If the mall was sold often enough, the county would have a lot of extra revenue," said Rick Hemphill, supervisor of recording and licensing.

Prime Property Fund, a conglomerate of several pension and other funds, had big plans for the 700,000-square-foot mall when it bought it in 1989. In addition to the $61.2 million sale price, the firm has spent millions of dollars to upgrade the property.

Two years ago the mall underwent a $4 million renovation, its look updated with new skylights, entrances, lighting and landscaping.

But Tuesday's sale price, $31,750,000, was only slightly more than half of what the company paid for it and less than the $35 million at which it was assessed by the state Department of Assessments and Taxation.

"Most retail property has undergone somewhat of a devaluation. Basically, there are too many malls in the country," said Rob Stuart, a spokesman for Equitable Real Estate Yarmouth, the firm that managed the property.

Stuart said the owners were pleased by the terms of Tuesday's sale. He added that the assessment has little meaning in the real world.

"Who's to say how much something is worth? It's worth whatever somebody is willing to pay for it," he said.

Even though the price Prime Property is being paid is only slightly more than half what it paid for the mall in 1989, Stuart said Prime Property will not feel a major loss.

With $1.6 billion worth of shopping centers, apartments, office buildings and other investment properties, he said the firm has returned a healthy profit for its investors.

"One mall is not a significant part of the total portfolio," he said.

Stuart said growing competition - including two proposals to build $40 million retail centers in the Hagerstown area - weighed little in the decision to sell. The firm did, however, argue in court against a rezoning for the Prime Retail outlet mall proposed for Sharpsburg Pike.

"I think the Valley (Mall) has established itself," he said. "The mall is really strong. It doesn't have much competition up and running."

Stuart said the current management team probably will continue working for Crown American. Stuart said the leases of stores in the mall will not change.

Christine Menna, a spokeswoman for Crown American, would not confirm the sale Tuesday and declined to comment.

Crown American owns 24 other malls, including the Martinsburg (W.Va.) Mall, the Chambersburg (Pa.) Mall and the Francis Scott Key Mall in Frederick, Md.

Valley Mall has changed ownership several times since it opened 23 years ago. In 1983, Valley Mall Associates sold it to Patrician Group for $41 million.

In 1989, the mall was sold by Maryland Mall Ltd. Partnership to Hagerstown Valley Mall Associates, consisting of Prime Property and the Edward J. DeBartolo. DeBartolo was later bought out of the partnership.

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