The State of the Merritt Island Mall

Many malls all around America are fighting to stay in business and maintain their buildings. Our local Merritt Island mall is no exception. Over its long 52 years of existence, this mall has had both great success and many challenges. In the past five years, this mall has faced a wide range of problems including bankruptcy, natural disasters, and a declining amount of customers. What factors have led to this mall to its downhill struggle?

Of the many malls that used to be all over the U.S., it is estimated by Green Street Advisors that there are only around 1,000 malls operating in America currently. Of these malls, most of them are on the brink of closing. This for a myriad of reasons including lack of public interest, rising prices to maintain buildings, and loss of large anchor department stores. At the root of most of these problems is the changing profile of the American consumer and the demand for fast and easy shopping. Also, the emergence of many online shopping platforms such as Amazon has contributed. A lot of people nowadays are losing interest in in-person shopping, and would rather shop from the comfort of their own home. When the COVID pandemic began, people couldn’t leave the house and were stuck inside their homes. So, online shopping was very useful and has now become habit. In the fourth quarter of 2020, when the pandemic was raging on, Amazon made an estimated 125.6 Billion in sales revenue. The COVID  pandemic also caused supply chain problems, so it is largely attributed to being the cause of inflation. This inflation caused a lot of financial stress for businesses everywhere, both small and large. Some big corporations that filed for bankruptcy during the pandemic are JCPenney, J. Crew, Brooks Brothers, Revlon and Stein Mart. Many more are expected to follow. Our very own Merritt Island Mall’s original 3 stores were Ivey’s, Jordan Marsh, and JCPenney. Ivey’s and Jordan Marsh were both bought by other big stores and then disappeared, and JCPenny’s is still hanging on by a thread. There are still some JCPenney’s around, but in 2020 they declared bankruptcy. This loss of big chain stores everywhere has contributed to the decline of many malls, including our 52 year old mall.

In July of 1970, the Merritt Island Mall was opened. At the time, it was about 668,000 square feet. It was also the first regional mall in Brevard County. In 1977, it was sold to John Hancock Mutual Life Insurance Company. This kicked off lots of plans for renovation and updates. On its south side, the mall added a 80,000-square-foot Merritt Square Pavilion. The shopping and entertainment center included a Publix grocery, a six-screen theater, and a 6,000-square-foot Jungle Jim’s family restaurant. In September of that year, construction began on a two-story office building that was also on Merritt Square property fronting State Road 520. Also by that time the mall announced a 192,000-square-foot expansion on its west side. The west-side addition, which opened in the spring of 1988, included a 130,000 square feet for a fourth anchor store. These updates all amount to around modern day 99.2 million dollars.

John Hancock Mutual Life Insurance Co owned the mall until 2002, when they sold it to Bayview Malls LLC for modern day 53.9 million. Less than three years later, in April 2005, Bayview sold it to Thor Merritt Square LLC for about modern day 97.7 million. Some people involved in commercial real estate raised questions about that sale price in 2005, a few years before the severe recession and the subsequent decline in property values, as three of Merritt Square’s anchor stores— Dillard’s, Macy’s, and Sears—own their own buildings and don’t pay rent to the owners of the mall itself. The mall was under the management of Glimcher Realty Trust from 2007 until January 2015, when Washington Prime Group Inc. purchased it. It then changed its name to WP Glimcher.

In late May of 2016, the Merritt Island Mall fell into foreclosure. It became scheduled to be auctioned after the owner, WP Glimcher, defaulted on the mortgage payment. The publicly traded WP Glimcher runs 118 retail facilities—enclosed malls, lifestyle centers, and shopping plazas—across the country, including Orlando’s Waterford Lakes and Melbourne Square. According to court records from April 28, there was a $47.3 million judgment for the property. Even before the property was auctioned there was a lot of doubt that the property would be able to attract a large number of bidders due to factors such as the mall’s huge size. According to county records, at the time, the annual tax bill for Merritt Square was about $614,000. In September of 2016 the mall was sold to commercial property investors from New York for 33 million. Two companies from Great Neck, NY own the property. These companies are called Namdar Realty and Mason Asset Management. They usually purchase malls for low prices with various problems, but do not invest in improving them.

In early September of 2017, Hurricane Irma hit Florida with lots of wind and of flooding. Damage was done all over Florida. Merritt Island was no exception. The Merritt Island Mall took quite a hit. Not very much work was done to fix the problems caused. To this day, the mall is still struggling with issues caused by Irma. Leaks and mildew are all over the mall today. Many people find this off-putting and don’t enjoy shopping there for that very reason.

At the end of the day, malls everywhere are struggling. This is mainly due to a shift in what consumers want out of their shopping experience, but has many contributing factors. Of the few malls left all over America, most are in disrepair. Our local malls are prime examples. Leaks, mildew, and vacancy are all problems that need to be addressed in order for our local Merritt Island Mall to thrive and attract more customers. If these problems continue to go unaddressed, it is possible the mall could go into a downward spiral ending in permanent closing. But, if the mall gets a little help and some attention is given to the problems, the results could be dramatic.