The Norfolk Economic Development Authority has approved a plan to buy Military Circle Mall and several surrounding parcels on the 75-acre property for $11 million.
The most recent property assessment put the site’s value at $41.1 million. An affiliate of Harbor Group International facilitated the sale.
Norfolk Mayor Kenny Alexander praised the purchase in a news release.
“The acquisition of this site is strategic for the City and allows us to not only bolster economic development but to address resilience challenges by concentrating future development in this area,” Alexander said in the release.
City economic development officials have long hoped to redevelop the mall and surrounding area. After anchor stores like Macy’s and Sears began exiting the property, the EDA bought the former J.C. Penney building for $2.5 million in 2014. That building is now redeveloped office space leased to Optima Health and Movement Mortgage.
A 2017 study commissioned by the city lays out a vision for the neighborhood’s future: mixed-used development with 6,000 housing units and 16 million square feet of non-residential development in the area surrounding the mall.
“Over time, many years, the entire area will transform,” said Jared Chalk, executive director of the EDA.
However, Chalk said, there are no immediate changes for mall tenants. Pacific Retail Capital Partners will continue to manage the site, he said.
The EDA is authorized by the city to buy, own, lease and sell property with the goal of spurring development and attracting companies to move to and remain in Norfolk.
The former Doubletree hotel property, which is attached to the mall, is not a part of this transaction, according to Norfolk spokeswoman Lori Crouch. That property is listed for sale for $3 million by S.L. Nusbaum Realty.
Trevor Metcalfe, 757-222-5345, trevor.metcalfe@insidebiz.com
