Mall Hits Growth Spurt At Age 2 -- Sears, Penney's To Anchor Wing At South Hill

PUYALLUP

The South Hill Mall is only 2 years old, but already its owners are planning to nearly double its size.

Sometime next year, The Cafaro Company wants to begin construction on a $35 million addition that will be anchored by Sears and JC Penney, and possibly, by a third store, The Bon Marche.

Business has been so good at the mall, in the fast-growing South Hill area, that Cafaro regards its investment in the expansion a sure bet.

"We believe this project is a home run," says Don DeSalvo, director of development for Cafaro's West Coast operations. "The stores are doing quite well here."

DeSalvo says Cafaro is close to winning a building permit from the city of Puyallup and is targeting fall, 1992, as an opening date for the expansion.

The company already has received a clearing and grading permit, and work has begun on clearing empty lots behind the mall, off 98th Avenue East. The site is in an unincorporated area of Pierce County that Puyallup is planning to annex.

Puyallup's director of community development, Mike Casey, who is reviewing Cafaro's plan, was not available for comment. But city attorney Martin Muench says the city is close to finishing its review of the environmental impact statement.

Cafaro will have no problem financing the expansion, DeSalvo says, despite the reluctance by banks to extend credit to many developers for commercial projects these days. Cafaro is one of the nation's biggest private developers of shopping malls and has plenty of cash, says DeSalvo.

"We do not have the same concerns about financing that other companies might have," he says. "Banks are really closing down on developers. Thank God we have a few bucks."

Cafaro, based in Youngstown, Ohio, is a low-profile company that has built some 83 malls and shopping plazas around the country, mainly in the Midwest. Besides South Hill, the company owns two other shopping centers on the West Coast: Vancouver Plaza in Vancouver, Wash., and Target Place in Olympia.

Cafaro has slowed development of new malls to concentrate on upgrading and expanding its existing properties, says DeSalvo. Puyallup, he says, is the kind of market Cafaro likes. It's what he calls a "middle market" of small cities with a small-town America character. Puyallup and the surrounding area also are rapidly growing as companies such as Boeing expand there.

"We've always believed this portion of Pierce County was in a growth mode," DeSalvo says.

Car traffic at the mall, located off Meridian East near Route 512, has exceeded Cafaro's projections, and stores at the mall report strong sales. Herb Brooks, the mall's manager, says traffic was up 32 percent, recently, over a similar period a year ago.

Ron Cabeen, Target district manager, says the Target store at South Hill has been one of the best-performing in his district. And, a spokesman for Mervyn's says the store at the mall has done very well. Lamonts is the third anchor. Bill Guynn, an assistant manager at the Old Country Buffet, a family-style restaurant at the mall, says his restaurant recently reported the best sales of any in the 100-store chain for seven weeks in a row.

The two-level addition will increase the mall's size from about 500,000 square feet to about 810,000 square feet. It will stick out of the current mall to form a T-shape. Sears and J.C. Penney Co. would anchor the expansion, in additionto the mall's current anchors.

John Buller, senior vice president of marketing for The Bon Marche, could not confirm plans for the mall. "We feel strongly that the southeastern part of greater Seattle is a good place to put a store," he says. "But no deal is consummated."