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North Neighborhoods
Off again, on again Frazer mall plan still faces hurdle

Wednesday, July 17, 2002

By M. Ferguson Tinsley, Post-Gazette Staff Writer

Talk of a mall in Frazer is bubbling again.

For one thing, developer Damian Zamias has a new backer -- the Mills Corp., an Arlington, Va.-based real estate investment firm. Mills is talking about a November groundbreaking, and Zamias and Mills are requesting funding help from Frazer, Allegheny County and Deer Lakes School District.

Finally, Mills representatives last week wowed Deer Lakes board members and township officials with a tour of Arundel Mills, the company's 200-tenant complex outside Baltimore.

But the mall, which Zamias first proposed in 1981, is still a ways from becoming reality. The long-standing issue of building a Route 28 interchange is unresolved, and Zamias is in bankruptcy court, though his lawyer said the suit won't affect the Frazer project.

The Mills Corp. came on board nine months ago. It wants to develop the site as a $250 million, 1.2 million-square-foot shopping and entertainment complex. It has 13 up-and-running malls around the country.

Local officials were impressed by Arundel Mills, which opened in November 2000.

Deer Lakes board President Thomas C. DeBolt said what caught his interest was the Maryland mall's untraditional focus. Instead of centering on customary department store anchors like Kaufmann's, J.C. Penney's or Lazarus, Arundel Mills focuses on the familiar Bed, Bath & Beyond outlet; a Bass Pro Shops Outdoor World with an indoor climbing wall, boats and a shooting range; and the nation's first Crayola store, filled with craft and art supplies for youngsters.

Mills spokesman David D'Onofrio said his company often takes on a local or popular theme for its malls. In Arundel, a nautical Chesapeake Bay flavor plays throughout the shops, while the 24-screen Muvico theater there features an Egyptian motif, with statues and artifacts.

D'Onofrio said designs for the Frazer project are not yet developed.

The plans represent a new direction for the mall, originally conceived along more traditional lines.

Whether it finally gets off the ground remains to be seen: Zamias has run a gantlet of obstacles in 22 years.

Zamias, whose company is based in Johnstown, first negotiated with township officials, the state Department of Transportation and residents over a $10 million interchange for his original Frazer Galleria plans for the site, 285 acres near Butler-Logan Road.

The access from Route 28 is still needed. If ground is to be broken in November, the issue will have to be worked out.

Zamias, who referred questions to D'Onofrio,, is facing another new battle: In May, he filed for Chapter 11 bankruptcy protection from an $11.4 million lawsuit filed by American Property Consultants Ltd. of New York.

American Property claims Zamias' company owes the money, which was a fee for helping Zamias form his shopping mall partnership in 1997.

Richard Mosse, American Property president, said U.S. Bankruptcy Judge Bernhard Markovitz will, if the bankruptcy goes forward, either appoint a trustee to oversee the liquidation of Zamias' company's assets or appoint a manager for all of Zamias' properties around the country -- nearly 40 properties, Mosse said, worth several hundred million dollars.

But Zamias' lawyer, Jim Walsh, said the suit won't affect the Frazer mall project because Zamias does not own the Frazer property.

Plans for the mall could be boosted by local officials. Zamias and Mills are asking for tax-increment financing, getting government-backed loans in anticipation of later tax revenue.

Deer Lakes, Frazer and the county earlier this month selected representatives to serve on a TIF committee with that aim in mind.

Maurice Strul, an assistant manager at the county economic development office, said under a TIF agreement, the taxing entities agree to let a portion of the future tax dollars generated by the mall be earmarked to pay off construction bonds sold to pay for the project. Strul said a TIF is usually 10 percent of the anticipated return.

DeBolt said he believes the district will get about $5 million in taxes annually after the mall is built. Township officials say their take is not yet known. County officials could not be reached.

The TIF committee will develop a plan to determine how much money will be allotted for the program. Frazer Supervisor Christine M. Heintzinger said nothing has been decided, but the plan should be ready by October.

Another bump in the road is providing security at the mall. Frazer has no police force, and Heintzinger said the township was considering cooperating with East Deer and West Deer for police service.

She said a police force for Frazer didn't seem feasible; the township has only 1,500 residents.

West Deer Manager Shelia Hanlon said police Chief Charles "Marty" Fleischer had talked with Frazer officials about the matter in the past and "I'm sure he will do the same thing now," she said.

West Deer, with a population of about 11,600, has 10 full-time and 5 part-time officers.

Another factor which may be turning more in Zamias' and Mills' favor is the attitude of other area retailers.

When Zamias first proposed the project, Tarentum, New Kensington and Natrona Heights retailers rose up against the idea, complaining that the mall would dry up business in their communities.

In the two-decade interim, however, the mall has garnered a bit of support.

"I think competition is healthy," said Maggie Ryba, president of the Heights Plaza Merchants Association in Natrona Heights. She said while the mall will bring more retailers to the area, she believes Mills Corp.'s focus on outlet stores will not directly compete with established businesses.

Ryba, who owns Sterling Optical, said the stores in the plaza on Route 28 North have been there for about 50 years and would welcome the diversity the mall would offer.

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