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WARREN, MI-The owner of the 960,000-sf Universal Mall has started its demolition, with plans to turn the former indoor mall, now almost vacant, into a lifestyle center. Universal Mall Properties LLC will leave the last three remaining anchors intact–Burlington Coat Factory, A.J. Wright and the Cinemark dollar movie theater–but the rest will be torn down to allow the construction of a 135,000-sf Target and about 35 other stores in about 650,000-sf of space.

The owner is spending about $24 million to build the 35 stores. “I don’t know how much Target is spending for their store,” says Marilyn Zeigler, managing director for the mall. The Target will open in July 2009. Demolition started this week on the site at Dequindre and 12 Mile roads.

The mall was built in the mid-1960s, and had its heyday in the 1970s, but as its anchors bankrupted or closed the retailers slowly went away. The current owner bought the site in 1999. “We refurbished the property the best we could. It was about 40% vacant, but we filled another 25% with mom and pops, and temp tenants, giving locals a chance to expand a store or just start a dream they had. Over the years, though, the competition got younger, and we had to do something.”

The movie theater has a long-term lease, and the other two anchors agreed to stay on and be reconfigured into the lifestyle center format. Zeigler says she’s negotiating with three more tenants. “We’ve got a couple of meetings coming up, but I can’t name names yet. Once we start construction, we’ll see more activity.”

Though Warren, a blue-collar town with General Motors roots, has not seen the retail activity that nearby Troy has with Oakland Mall and Somerset, the economy has not hurt sales as much as some people would think, Zeigler says. “If you asked me two months ago, I would say the market is not so good,” she tells GlobeSt.com. “But people are still buying. When prom time came, I thought we would see a 20 to 30% drop, but we actually saw a 5% sales increase. I think the stores that are really being affected are at the high-end properties, not here.”

The city helped the mall get brownfield tax incentives worth $1.5 million to help with the demolition and cleanup. Diana Kolakowski, economic development director for the city, tells GlobeSt.com that the city was glad to assist. “This is a very important development for us, it’s right on our border,” she says. “It’s a 60-acre parcel, and it was starting to take on a blighted appearance. In terms of jobs and rebuilding for our city, this is an important project.”

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