Locals behind Afro Deli, Asia Mall as well as Chicago firm buy troubled Burnsville Center

Burnsville Center's new owners are no strangers to the troubled shopping center and the Twin Cities.

A group of business owners, including developers behind the $30 million project to build an Asian grocery store and food hall inside the empty Gordmans at the mall, have purchased the rest of the shopping center, minus the anchor tenants. Wyn Group, the new brokerage and investment firm real estate principal Marshall Nguyen formed, is also a co-owner as well as Afro Deli & Grill owner Abdirahman Kahin.

The deal closed last week, but the owners, including Chicago area-based Windfall Group, declined to share the sale price. The sale signals a new era for the south metro mall, which has struggled to retain tenants and foot traffic throughout its recent history. It is also a rare example of local investors taking part in owning and managing a metro-area mall as opposed to just a large, out-of-state real estate investment trust.

"We are local, and we are longtime holders," Nguyen said. "It is important for us to ensure the vitality of the interior mall."

Last year, Eddie Ni, chairman of Windfall Group, led the team that bought the former Gordmans — as well as the space Dick's Sporting Goods, Noodles & Co. and Kirkland's occupy — for about $10.6 million. The Pacifica of Burnsville project, which will also include a couple of standalone restaurants, should open early next year. Nguyen, who helped broker the Pacifica deal, said it was always the group's vision to acquire the entirety of the mall.

"That was our strategic play. ... We want to ensure whatever uses coming into the mall also complement our project," Nguyen said.

The latest development

The team has been busy. In May, the group, including Ni and Nguyen, purchased the empty St. Paul Sears store near the State Capitol for $7 million and soon after sold the store to community organization Asian Media Access. Nguyen also brokered the deal that turned the former Gander Outdoors store in Eden Prairie into the Asia Mall retail destination.

The most recent sale for the remainder of Burnsville Center doesn't include the anchors of Sears, JCPenney and Macy's, but it does encompass the main thoroughfares and stores inside the mall as well as much of the surrounding parking lots, totaling about 28 acres.

"We will be working very closely with our local partners to attract tenants and revitalize the mall," said Judy Ni, Windfall's director of real estate, in an email. "This will include innovative marketing strategies, competitive leasing terms, renovations and adapting to changing consumer preferences to create a more appealing destination."

The group of owners purchased the mall from New York-based Kohan Retail Investment Group, which city leaders had criticized for failing to maintain the languishing mall.

"I think generally speaking, we are very happy that Kohan sold to somebody who has the wherewithal and the desire to invest in it," said Burnsville City Council Member Dan Kealey. "We are a lot better off."

The mall's condition has deteriorated through the years, leaving the carpet dirty and the pylon signs that greet shoppers rusted. The first priority for the new mall owners should be to improve the condition of the mall so tenants and shoppers will want to visit, Kealey said.

The Burnsville Center group plans to start bathroom renovations and is currently fielding bids to replace some of the flooring on the second level, Nguyen said. They are also turning to automation to help keep the mall clean, including purchasing robots that can mop the mall's tiles.

"That's our priority, to change the perception," Nguyen said.

What attracted the owners to the mall in the first place was the location close to Interstate 35W and the population of potential shoppers in the south metro. While Nguyen didn't provide details for further redevelopment at the mall, he said the mall's new owners are open to a variety of uses such as residential development.

For Kahin, recently named the National Small Business Person of the Year, the mall represented a chance to give more business owners of color the opportunity to open their shops in a suburban regional mall. He has also visited other malls around the world, including in Dubai, and said he thinks Burnsville Center could incorporate more high-end elements like better finishes and entertainment venues.

"We are going to do everything to make this place work," Kahin said.

Work ahead

Burnsville Center was anything but bustling Thursday afternoon. There were only a handful of open businesses in the food court, but that didn't dampen the spirit of Armando Gaona and his wife, Danica, who said they knew a good deal when they saw one when they decided to open Gaona's Kitchen in the mall this week.

Much of the kitchen equipment came with the space, including the fryer, freezer, fridges and flat top.

"We know everything is coming back to life," said Armando Gaona, about the mall. "We just saw a good opportunity."

Another new name in the mall will be Sustainable Safari, which is opening a second location nearly twice the size of its space at the Maplewood Mall in early 2024.

"I grew up at the mall," said David Harvey, president and chief executive of Sustainable Safari. "I'm very excited to bring some traffic back there."

Sustainable Safari, which allows visitors to interact with animals like capybaras and snakes, will have a party room, learning space and a walkabout area incorporated into the kangaroo exhibit. The location of the mall was also a big selling point, he said.

For older tenants, news of new owners is a sign of hope. Michael Soriano of Wonders Ice Cream said Burnsville Center's previous owners didn't do much to try to increase foot traffic, and he would like the new owners to host events.

The rolled ice cream shop had to close during the pandemic before reopening earlier this year. Traffic and sales have been slow.

"It's a struggle," Soriano said.

Burnsville Center has long had an issue with empty storefronts, which the pandemic only worsened when many malls and stores had to close temporarily as shoppers stayed home. In spring 2020, Burnsville Center's income dropped by about a third because of store closures and rent reductions. The mall's former owner, Tennessee real estate investment trust CBL Properties, missed its mortgage payments and later that year put the mall up for auction as part of foreclosure proceedings.

The Kohan group purchased the mall in late 2020 at auction for about $17 million with its leader, Mike Kohan, vowing to "do the right thing for the community." But outside of the Pacifica project, Burnsville Center failed to make any significant progress.

Nguyen estimated the mall is about 50% empty, and said he views it as an opportunity.

"There's a lot of vacancies, which is great because it is going to help us curate our idea and bring in a lot of traffic," Nguyen said.