- November 18, 2024
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There are two ways to interpret the current state of City Marketplace: one of stagnation or one of transition.
Strings of consecutive vacant storefronts, rent-past-due notices, and scant foot traffic seem to point to the former for the shopping center located off Cypress Point Parkway.
Sophanny Kes is the owner of an Asian market on the ground level of the complex. He’s going out of business after four years at City Marketplace because he doesn’t have the funds to make improvements to the store. Meanwhile, he said, there is stiff competition in other parts of town.
He characterized City Marketplace like this: “Good location, but the wrong design.” Because the courtyard doesn’t have an open entrance on Cypress Point, potential shoppers drive by without knowing what’s inside, he said.
Further complicating the situation is a somewhat-recent change of ownership. The $2.9 million sale of City Marketplace to Cypress Point 160 LLC closed in November 2013. John C. Bills Corporation — a property management firm located in Palm Beach Gardens — is handling the shopping center.
Kes produced a memo dated Nov. 19, 2013, that reads in part, “your lease has been assigned to Cypress Point 160, LLC effective November 15, 2013. Please make all future rent checks payable to Cypress Point 160, LLC.” The document was printed on John C. Bills letterhead.
Cypress Point 160 is a company formed specifically for the purposes of holding this property, explained Jerry Masiello, leasing manager with Landmark Commercial Reality. John C. Bills has taken a vested interest in the area lately, also acquiring nearby Roma Court last summer. Both were bank-owned properties at the point of sales.
On Monday afternoon, Keky Mistry was at the cash register of San-Yasi Inc., a health food store at the far end of a string of empty storefronts. He said he was filling in for the owner, who was out of town. Mistry was told, “Keep it open for me; otherwise, people will think I’m closed, too.”
On the upper level, which features wide walkways fronting more shops, most of the storefronts were empty. One, with the name Virtual Homes Realty across the door, had a notice affixed, declaring that, as of April 11, the tenant owed the landlord $2,675.
Also located on the top level of the complex is Hollingsworth Gallery, operated by local artist J.J. Graham.
Graham has been in frequent contact with the complex’s new property managers — and his new landlords — regarding some of the changes that could be in store for leasers. He’s been told his rent will increase, but declined to go into specifics.
Substantial aesthetic improvements — including better landscaping, an awning over the second floor, repairs, and other touch-ups are imminent, Masiello said.
But they’ll come at a price. Several businesses own their spots, and others are under already-negotiated leases with several years remaining. However, those businesses that were previously under month-to-month or implied arrangements previously are set to see an uptick in rent.
“The lease rates are in line with what the marketable rates are,” Masiello said. “It may be unfortunate to some of these folks, that these rates don’t make sense to them, but were talking about a business transaction here.”
What Graham can’t understand, though, is why increases in rent have to precede the improvements.
“If they’re going to fix this place up, if they’re going to get all this foot traffic that they say is going to be here, why didn’t they wait until then to raise the rent?” he said.
The firm’s vision for the future of City Marketplace might explain that.
“The goal is to bring in national brand names,” Masiello said, projecting that there will eventually be about a 50-50 split between those and local tenants. Having national names and followings will buoy the existing business owners who stick it out during this transitional period, he added.
While Graham understands that property management is a business, his deepest fears about the future of City Marketplace stem from the fact that its new owners lack local ties.
“I would like to be hopeful about it, I definitely can’t figure out what their strategy is and where they’re coming from,” he said. “The thing that I’m nervous about is that these guys are from another community. So what has developed here culturally, which is part of Palm Coast, they’re not going to have that sense of pride about.”
