Hollywood mall gets a new deal

The South Florida Business Florida From the April 11, 2003 print edition Darcie Lunsford  

The metal security gates fan out in a checkerboard grid, guarding empty booths.

Banner signs stripe the tops of many: Rebecca Jewelry Dis-count, Gifts-O-Rama, and Josie's $5 or Less Store. An empty, two-story carousel collects dust, its stampede of bouncing horses frozen in an eerie halt.

But Weston-based Millennium Development Enterprises plans to change that.

The small retail developer signed a 60-year lease on April 3 to take control of the abandoned Hollywood Super Mall at U.S. 441 and Hollywood Boulevard.

The plan is to fill the 935,140-square-foot mall, a faded testament to 1970s retailing, with 850 booth-based vendors, 40 shops, food stands, a 35,000-square-foot farmers market and a family entertainment center.

If Millennium can do that, it promises to create nearly 2,600 new jobs, $657 million in sales, and $39 million in sales tax within five years, according to a September economic impact study.

Millennium's plan sounds similar to one floated last year by Pompano Beach flea market operator Daniel Shooster.

Shooster's deal died this winter and that's when Millennium stepped in.

Terms of Millennium's lease with the mall's New York-based owners call for the firm to pay about $3.5 million a year in rent with an option to buy the mall in 10 years for $33 million, according to Millennium Chairman Ignacio Martinez II.

Millennium also expects to pump about $20 million into renovations, said Martinez, who is redeveloping the center with his father, brother and partner Noel Epelboim, a local engineer.

Caracas flea markets

The Martinez family, which moved to South Florida from Venezuela about eight years ago, owns three flea markets in Caracas. The family, under its Millennium moniker, also owns 450,000 square feet of retail centers and a new condominium development in western Broward County.

Millennium's deal comes after mall owners failed to seal a deal with Shooster, owner of the Festival Flea Market Mall, whose Web site says it is more than 400,000 square feet.

Shooster also planned a flea market-style shopping center and entertainment hub in the building.

"Shooster wasn't ready to make up his mind so we moved forward without him," said Chiam Stern, one of the mall's New York owners, who paid about $12 million for the property in 1997.

Shooster could not be reached for comment.

Millennium lawyer Roy Oppenheim said that when his clients found out that Shooster was out of the picture, they pounced.

"We only went into intense negotiations with them in March," said Oppenheim, a senior partner with Oppenheim Pilelsky in Weston. "We did the whole deal, literally, from start to finish, in 10 days."

Martinez said he began chasing the mall deal two years ago because the family was interested in bringing their South American flea market know-how to the United States.

But Shooster became the lead contender.

"We were always the backup option," he said.

Offshore hedge fund

The family created Millennium Equity last year, an offshore hedge fund that pools cash from Latin American investors for U.S. real estate deals. The fund now has about $1.5 million in it, Martinez said. The objective goal is to build up the fund's cash position and use it as leverage to buy Millennium developments once they are up and collecting rent.

Millennium's plan, which may include taking the fund public in about five years, comes as retailers nationwide deal with sluggish sales spurred by the nation's wobbly economy and general uncertainty about terrorism and the war in Iraq.

Many national chains have put their expansion plans on ice until these economic storms blow over.

The Super Mall had a lineup of major retailers - including department stores Burdines, Jordan Marsh and JCPenney - when it opened in 1974 as Hollywood Fashion Center. The death knell for the mall was in 1992 when Burdines and JCPenney moved down the road to the new Pembroke Lakes Mall.

For the rebirth, Millennium plans to target local tenants, generally regarded as riskier than national retailers, but more apt to make a move even in uncertain times.

"We really feel like they are the ones that are going to take the largest market position right now," Martinez said.

E-mail real estate editor Darcie Lunsford at dlunsford@bizjournals.com.