Is Franklin Mills mall
on the market?

By William Kenny
Times Staff Writer

The information age may have many advantages, but keeping secrets is not one of them.
Thanks to satellite television, the World Wide Web, mobile telephones and good old word-of-mouth, it’s no surprise when inside information spreads like wildfire. Unfortunately, unfounded rumors travel the same information highways and byways with equal frequency.
And often one can only guess which bits are merely rumors and which ones are facts.
Perhaps one of the bigger rumors making its way around Northeast Philadelphia these days is that the 17-year-old Franklin Mills mall is going to be sold, knocked down and replaced by a massive residential development.
In recent months, folks have been spreading the word to their families, friends and neighbors, while discussion of the site’s future has been a steady topic of conversation on the popular community Web site PhillyBlog.com
No one seems to know where it all started, but many people believe the buzz.
High-ranking executives in the Mills Corporation — owner and operator of Franklin Mills as well as 41 other shopping malls in the United States and abroad — refuse to deny or confirm the alarming reports about the sprawling Far Northeast retail site at Knights and Woodhaven roads.
Meanwhile, the corporation is in the midst of a very-documented upheaval, having announced its intention to explore "strategic alternatives" — that is, the possible sale of its assets.
Also, it is being investigated by the federal Securities and Exchange Commission for accounting errors and has recently laid off more than 200 employees.
"We don’t comment on speculation," said David Douglass, vice president and director of corporate communications for the Mills Corporation, based in Arlington, Va
Shares of the company are traded publicly on the New York Stock Exchange under the symbol MLS.
"I’ve seen the blogs, and I’m not going to comment on that," Douglass reiterated.

• • •

The blogs Douglass was referring to are "topic" discussion threads in the "Northeast Philadelphia" and "Business" sections of the PhillyBlog site.
A "blogger" identified as "robot" started the first major topic on the subject on March 1 under the heading, "franklin mills closing?"
In his post, the author stated that he didn’t believe the rumor, but he was curious to know if anyone else had heard the same thing. Also, he claimed that his wife’s family considered it a done deal.
By May 18, the topic had generated 37 replies. As of last week, the topic had been viewed 2,700 times, making it one of the most popular topics on the site’s citywide bulletin board.
Franklin Mills opened on May 11, 1989, a shopper’s dream constructed on the expansive site of the former Liberty Bell Racetrack.
The complex debuted with 143 stores, including six anchors, and additional construction over the next several years significantly expanded the mall’s retail space and stature in the region.
Communities, as well, have benefited from the mall’s fortunes. Through creation of the Franklin Mills Advisory Council — and in accordance with a community agreement when the mall opened — Franklin Mills has made annual financial contributions to benefit neighborhoods in proximity to the complex.
The latest contribution came earlier in the summer, when the advisory council distributed nearly $31,000 among 36 non-profit community groups, including youth associations, sports clubs, seniors groups and scout troops.
While some of the recent PhillyBlog posters criticized the mall and endorsed its closing, others spoke highly of the mall and reminisced about shopping or working there years ago.
Many were skeptical of talk about a potential closing. But the subject continued to spur debate, leading to another topic thread on the same Web site’s Northeast Philly section. "Sale of Franklin Mills Mall" was created on May 6 and generated 14 replies over the ensuing 11 days, and 1,296 views overall.
"Has anyone heard about Franklin Mills being sold?" the blogger, identified as CPark, asked. "I heard that it has already been sold and that is why Boscov’s lease was not renewed. The other stores will not be able to renew their leases, either. Rumor has it that either new homes or a casino will be built there by 2010. Does anyone know if there is any truth to this rumor?"
Some respondents complained of crime at the mall, particularly car thefts and break-ins, and others dismissed the rumor. Sentiments were split over whether the closing would be a good or bad thing for the area.
Administrative officials at Franklin Mills have not been available for comment for the last two weeks, though the mall’s spokeswoman, Donna Danielson, acknowledged that colleagues in her office also heard the rumors and met with the mall’s tenants to discuss the issue.
Danielson did not comment directly on the rumors, but she noted that Steve and Barry’s University Sportswear had recently signed a lease to occupy the former Boscov’s anchor-store space.

• • •

The bloggers aren’t the only ones talking about a possible sale and closing of Franklin Mills. Even some of the mall’s shoppers are aware of the chatter.
Northeast resident Leslie Durkin stopped in to do some shopping recently. She wasn’t sure of all the details.
"I just remember hearing it was going to close," said Durkin, who heard the rumor from a client at her job. "It was probably about two months ago."
She had her doubts.
"I didn’t believe it because they wouldn’t replace a mall with houses," Durkin said.
Jim Galen, of Parkwood, heard the same thing.
"My wife said something a couple of months ago," he said. "It’s definitely out there rumor-wise that they’re going to be selling and there will be homes here."
He doesn’t like the idea one bit.
"It could be very congested with Knights Road, Woodhaven Road and Street Road all around here. And they just did the same thing with the Byberry deal," Galen said, referring to plans for residential construction on the old Philadelphia State Hospital site at Roosevelt Boulevard and Southampton Road.
Rosemary Montagno, longtime president of the Franklin Mills Advisory Council, which was established as a community liaison to the mall upon its debut, thinks the rumors are tied to high-profile store closings at Franklin Mills.
"This has been going on since Boscov’s announced they were closing," she said. "I’ve heard every rumor you have, and nobody knows who starts it. I guess we won’t know until the other shoe falls."
That’s pretty much the same approach that corporate officials are taking. On June 15, the Mills Corporation announced that it had signed confidentiality agreements with 30 prospective buyers for the disclosure of highly sensitive financial records.
Officially, everything is on the table as far as a sale, but nothing has been confirmed.
"It could be an outright sale of the company, (sale of) a part of the company or some of its assets," said Douglass, the director of corporate communications. "We could pursue a recapitalization or nothing at all."

• • •

Though the Mills Corporation does not release occupancy figures for its malls, according to the corporate spokesman, it is "very pleased" with the performance of Franklin Mills.
An informal survey by the Northeast Times recently calculated about 20 vacant stores in the mall. The mall’s online directory lists 268 individual stores, shops or restaurants. That would mean an occupancy rate well in excess of 90 percent.
According to Douglass, an occupancy rate of 85 to 90 percent is "typical" industry-wide.
Franklin Mills, with its combination of outlet and off-price stores, traditional retail stores, restaurants and entertainment, is still compatible with other malls owned by the company, particularly the 17 "Mills"-branded locations, the spokesman added.
At the corporate offices, 220 positions have been eliminated in recent months, reducing the staff to less than 900 people.
On the other hand, the Mills Corporation won’t be disclosing much information for the time being about its "search for strategic alternatives."
"We wouldn’t be commenting on the process until the board has either approved a transaction or abandoned the process altogether," Douglass said. ••
Reporter William Kenny can be reached at 215-354-3031 or bkenny@phillynews.com