Park Plaza, Little Rock’s most iconic retail space and the state’s first mall-like shopping center, has a new lease on life following a decade or more of evolving retail trends that led consumers elsewhere and the mall ultimately to foreclosure.
The new owners plan to make sure Park Plaza, opened in 1960, is around for at least another six decades. Howard Levine and Camilo Varela, managing partners and co-founders of Florida-based Second Horizon, saw opportunity when the mall was placed on the market two years ago. Deutsche Bank acquired Park Plaza at auction for a mere $100,000 after previous owner, CBL Properties of Chattanooga, defaulted on its loan and the mall went into foreclosure in 2021.
Though no official figure was released, Second Horizon paid the bank between $25 million and $27 million for the 268,000-square-foot property, as reported by CRENews.com.
Founded in 2021, Second Horizon specializes in “reinvigorating challenged commercial real-estate projects,” according to its website. Park Plaza represents the firm’s second addition to a fledgling portfolio. A year after its launch, Second Horizon announced the acquisition of Stony Point Fashion Park, a 680,000-square-foot mall in Richmond, Va. And in Park Plaza, the firm found another former retail juggernaut that its leaders believe can shine again with a little TLC.
Much more than a new coat of paint appears to be headed the mall’s way. Levine told AMP in an email interview that Park Plaza offers opportunity for “tremendous revitalization and activation.”
Howard Levine
In the month following Second Horizon’s March purchase, the firm’s leadership team went store to store to meet with tenants and assure them of its commitment to Park Plaza.
“We saw a central retail core with a great location and longstanding market presence,” he said. “We also recognized a community with a desire for updated retail offerings and more entertainment options. Through additional investment, incremental resources and dedicated focus from new management, we are excited to work to transform Park Plaza into a destination that better serves the local community.”
Camilo Varela
Varela said it was important as “long-term operators” to connect with tenants from day one.
“We are active, engaged and invested in the future of Park Plaza, and hope that our attention and involvement demonstrate that commitment,” he said. “Our tenants, our shoppers and our community are the life and future of the center, and spending time listening to them helps us define how we can best apply our energy, resources and time to build toward the long-term success of Park Plaza.”
Second Horizon’s plans for the property include new entertainment options. Levine said he and Varela envision a retail-centric hub with an updated mix of entertainment, dining and traditional shopping options.
“At the moment, we are working to revitalize the center’s existing infrastructure to support this transformation,” he said. “We have already started our initial capital investments and operational improvements, as well as enhanced our on-site management team, and are now focusing our efforts on activating the property with new offerings.”
New offerings in Central Arkansas are trending towards entertainment — Top Golf, Main Event, the planned entertainment venue at the former Wild River Country property among them. Local commercial real estate developers agree that any rethinking of Park Plaza should include a heavy dose of it.
Compared to other markets, Little Rock has been underserved in family entertainment, said Jessica Flake Dearnley, CEO and principal broker at Flake & Company.
“New ownership of Park Plaza presents an opportunity for imaginative thinking; the mall needs a lot more than a banner that says ‘Under new ownership,’” she said. “The incoming owners should understand that they need creative partnerships to offer art walk-throughs and experiences like other innovative malls have created with the popular series ‘Stranger Things.’ Try unique activities and a variety of shopping experiences to attract customers to the center. The environment needs to be special, interactive and engaging.
“We keep seeing about pickleball courts coming to malls. The successful big-box retailers have pivoted towards offering services or recreation at their stores. Malls will need to do the same.”
Dearnely further noted that stores like Petco and PetSmart have veterinary services and grooming in-house, Staples has added TSA pre-check; and Ulta stores include a salon in addition to the makeup they sell.
“They are doing things to get people into the store that they can’t buy on Amazon,” she said.
As a former asset manager for regional enclosed malls, Dearnley appreciates how expensive malls can be to operate.
“They are beyond capital intensive. Malls are like operating a small city or town. Ultimately, if the rental rates can’t correlate to the cost to remodel, it doesn’t make economic sense for traditional investors and needs to be a public/private partnership.”
But taking on such “risky” projects and turning them around represents Second Horizon’s calling card. The firm’s website describes the company as an “impact investment real-estate company that partners with communities to reimagine large-scale, underutilized commercial properties as vibrant destinations and local economic engines.”
Second Horizon will have its work cut out for it. Though Dillard’s has remained committed to Park Plaza, mall traffic has deteriorated significantly over the past two decades. Many factors have contributed — the rise of e-commerce, the city’s westward expansion, a pandemic, even questions about patron safety. But Varela stressed that his team is less concerned with the mall’s past than it is about the future of Park Plaza.
The University Avenue corridor in Little Rock’s midtown remains relevant, and he thinks Park Plaza will adapt to meet the needs of the market.
“Businesses evolve and adapt, and retail centers are no different,” he said. “For Park Plaza, our focus is less about the specific design of our center and more about what solutions can fulfill the needs and desires of our Little Rock community. We are excited to be part of transforming Park Plaza into a dynamic space that offers renewed relevance to our tenants, our shoppers and our neighbors.”
The new owners are mum, for now, on specific plans, outside a renewed commitment to security.
The corner of Markham and University, with the original Park Plaza sign and a bank branch on the corner, in 1965.
(Photos courtesy of the UA Little Rock Center for Arkansas History Culture)
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When Second Horizon bought Park Plaza in March, local news outlets reported that at least 10 of 62 storefronts inside the mall were vacant, higher than the 5.7 percent national shopping-center vacancy rate reported by Cushman & Wakefield for the fourth quarter of 2022.
Hometown Dillard’s anchors each end of the mall and these days accounts for most of the mall’s foot traffic. The Dillard’s nameplate has adorned the Park Plaza façade since 1974 (though the Dillard’s-owned Blass department store was added to the center’s roster in 1965). In the ensuing decades, Dillard’s has become synonymous with Park Plaza, and its commitment to the mall unwavering.
Park Plaza opened in 1960 as a two-story, open-air concourse. The intersection of Markham and what was then Hayes Street (in what was then considered west Little Rock) represented the first mall-like structure in the state. Within the decade, others would follow suit across the metro — The Mall (later University Mall and later yet torn down and redeveloped as an open-air center), Southwest City Mall (now the headquarters of the Arkansas State Police) and McCain Mall.
Park Plaza’s original 1960s design included garden-like space with a brook running through the middle of the ground floor.
The original, open-air Park Plaza included a fountain and brook, a bowling alley and even a movie theater, the latter of which made the transition to enclosed mall before closing.
But by the 1980s, those enclosed malls had popped up across the U.S. landscape like mushrooms in a water-soaked yard and defined an era, and Park Plaza had been left behind. The original structure was demolished in 1987 and rebuilt — for what was in the late ‘80s a pricey $55 million — as the glass-enclosed building that still presides over one of Little Rock’s busiest intersections.
Park Plaza was home to Morrison’s Cafeteria and Park Plaza Lanes.
Ironically, open-air “lifestyle” centers represent the current retail rave. But that hasn’t dampened the optimism flowing from Levine and Varela. Prior to the launch of Second Horizon in Boca Raton, the former served as a managing director in Bank of America’s global credit and special situations practice, where he did a lot of CRE investing, and as an investment banker for Sagent Advisors (now DC Advisory) and Citigroup Global Markets.
Varela was a managing director in investments at Equity International, where he led origination, deal execution and portfolio management across the U.S., Asia and Latin America markets.
Neither is new to the investment game, and both are excited about their latest. But, still … Little Rock? Varela explained, “As part of our acquisition strategy, we completed a comprehensive review of malls and lifestyle centers across the United States.
“Through that work, Little Rock — and Park Plaza specifically — emerged as an attractive investment opportunity. We were especially drawn to the city’s vibrant community, along with its steady economic environment and affordable cost of living.
“Within that, Park Plaza sits at Little Rock’s busiest commercial corridor — a hub of the Midtown neighborhood — and a clear spot for enhancing a central destination for our community and Central Arkansas as a whole.”
Of course, Dillard’s continued commitment to Park Plaza helped the mall remain a viable investment opportunity for real estate guys like Levine and Varela. But there were other nuggets, as well.
“Our attention to Park Plaza was driven by several market elements — a neighborhood retail core with healthy anchor operators, a meaningful daytime population supported by the neighboring medical campuses and a central location with reach to all of Little Rock and Central Arkansas,” Varela said. “We are excited to work with Dillard’s, along with all our tenants and neighbors, to enhance the vibrancy of our Midtown community.”
Levine said Second Horizon has already begun initial capital investments and operational improvements, enhanced the on-site management team and now is focusing on “activating the property with new offerings.”
He added that his team is working with tenants and community leaders to determine the best way to serve local customers. And Levine is quick to remind them that change on such a scale as is planned will be slow. “These efforts will take time, and we look forward to sharing updates as our work evolves.”
For Levine, the corporate TLC that had been lacking at Park Plaza will be realized through “additional investment, incremental resources and dedicated focus from new management.”
The Second Horizon team has been encouraged — and even “humbled” — by the positive response from local leaders and the community at-large about the new ownership.
“We are excited to continue to revitalize this space into a thriving economic engine and community hub that will serve the Little Rock community and Central Arkansas for years to come,” Levine said. “Park Plaza offers a tremendous opportunity for revitalization and activation. We saw a central retail core with a great location and longstanding market presence. We also recognized a community with a desire for updated retail offerings and more entertainment options.”
Levine wouldn’t speculate on what future might have awaited Park Plaza had Second Horizon not stepped forward, but stressed that it had been sitting in a challenging financial situation for too long and needed “new energy, attention and significant investment.”
It’s early into Park Plaza’s Second Horizon stage, but the mall’s future hasn’t looked as promising in decades.
“Once the acquisition was complete, we began implementing operational and physical improvements, brought in world-class property management group, JLL, to oversee operations, and started engaging with our tenants and our community,” Levine said. “We look forward to introducing more enhancements in the weeks and months ahead and hope shoppers will come see and experience these changes.”
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