The Lexington Mall along Richmond Road in Lexington, Kentucky was completed in 1975 by Saul Centers as the second indoor mall in the city. The 428,000 square-foot 5 shopping center was constructed on the grounds of the Ellerslie estate which contained a 21-room mansion that was built in 1787.3 The house, older than the Commonwealth of Kentucky, was considered the oldest brick house in Fayette County and the second-oldest in the state and was constructed by Levi Todd, one of the founders of the city of Lexington and a grandfather of Mary Todd Lincoln, Abraham Lincoln’s wife.
Ellerslie was demolished in 1946 after having been purchased by the water company several years prior.3 The land was not used until 1971 when parts of the Lexington Mall were constructed.
Initially, only McAlpin’s, Shoppers Choice Supermarket and a discount store opened, leaving the mall concourses left to complete. The center suffered from on-and-off-again construction due to the bankruptcy of the mall’s original developers, John W. Waites Associates.4 Saul Subsidiary Incorporated purchased the mall in bankruptcy proceedings, completed construction and opened the indoor mall four years later in September with 48 tenants.
Notable tenants for the indoor center included McAlpin’s For The Home Store and Dawahare’s. For numerous years afterwards, the mall boasted 100% occupancy. Changes were inevitable and included the replacement of Shoppers Choice Supermarket with County Market.7 In January 1984, the mall expanded with a new 72,000 square-foot grocery store structure 4 and the County Market expanded, stocking 20,000 items in a new freestanding store. In March, Heleringer’s, a well-known furniture store in Louisville, expanded its operations outside of the Louisville-metro area for the first time by opening a new store in the vacated Shoppers Choice Supermarket and Consolidated Sales Company in the mall.8 The new tenant carried “furniture, carpeting, bedding, draperies, wall coverings and decorative accessories” from the mid-range to the upscale. The Karmelkorn Shoppe became the number one sales-leader in the nation for the month of December 1988 selling 16,250 pounds, or roughly eight tons, of popcorn and it was expected that it would be the number one chain again in December 1989 since same-store revenues had increased 30%.7
McAlpin’s renovated their department store in 1993,6 freshening the interior with new tile, carpet and lighting fixtures. But shortly after, the Fayette Mall announced a major expansion project that included the construction of a new department store and wing. In reply, Steve Reach, then-manager of the Lexington Mall, announced that the center would be renovated in 1995,1 but instead, the County Market closed its doors in October due to declining sales. In September 1996, Pat Day, acting manager, announced that the mall “might be expanded upwards with a second story.” In June 1997, the two-screen Sony Theaters at Lexington Mall closed.
In October, Hamburg Pavillion’s first stores opened at the former Hamburg Farm further east along Interstate 75. The massive shopping complex, anchored by new suburban development, led to further decline at the Lexington Mall. Work began in July 1998 with renovations at Turfland Mall, Lexington’s oldest indoor shopping center, in a bid to keep pace. In September, the Lexington Cinema Grill opened in the place of the vacated movie theater.
By 1999, the future of the mall was in question.4 Numerous tenants were leaving at a fairly rapid pace because of general maintenance neglect, unkept promises on renovations and expansions and a shifting customer base. The addition of new floors, higher ceilings and improved lighting, once expected, were never executed. By 2005, Dillard’s 295,723 square-foot store was the sole tenant remaining, but even it announced that it was closing its doors in September.2 Two outlots, Applebee’s and Perkin’s, remained open.10
Home Depot Lawsuit
In December 1997, Home Depot, a home-improvement superstore, demolished the former County Market grocery store.4 Home Depot, which had purchased the store’s lot for $4.4 million in 1996, soon found itself embroiled in legal predicaments with the owners of the Lexington Mall, Saul Subsidaries. Saul had wanted Home Depot to construct its store as part of the mall in the former County Market lot, however, Home Depot constructed a free-standing store adjacent to the property instead.
Saul insisted that Home Depot violated a private written 1969 agreement between the then-developer John W. Waites Associates and any future tenants. The Lexington Mall, however, was constructed on two pieces of property; the mall with the former McAlpin’s was located on one piece, with County Market, then Shoppers Choice Supermarket, on another.
In August 1998, the Kentucky appeals court agreed that Home Depot did violate the agreement, but Home Depot stated that it would request the Supreme Court to review the ruling. Saul stated that the only remedy to the situation was to “tear down Home Depot.”
On July 3, 2010, Southland Christian Church announced that it was involved in a pending deal to acquire the Lexington Mall property from Saul.11 With the purchase of the property, Southland would boast its main campus on Harrodsburg Road, its Danville location and a third on Richmond Road. A letter of intent to purchase the property for $8.132 was submitted to Saul on August 27 12 and the deal was closed on September 27.10 13 Out of the sale, Saul profited $3.59 million but due to an IRS regulation, did not pay taxes on the gain.10
Saul conducted a 1031 exchange and used the proceeds of the sale to purchase a shopping center in Maryland, where the company was based. As a result, the company deferred federal taxes of 15% on appreciation and taxes on depreciation. A 6% state tax was also deferred.
The megachurch hired EOP Architects to begin designing its new campus building 10 and Messer Construction as the construction management firm.13 Southland expected to spend about $30 million to redevelop the property, which involved the demolition of the one-story portion of the mall and the construction of a 51,000 square-foot, 2,000-seat worship center in its place with an unfinished balcony that would hold an extra 800.13 15 The old Dillard’s store would be reused for church offices and ancillary services.12 In total, 84,000 square-feet of that would be renovated for use by various ministries while the remaining 61,000 square-feet would be shelled for future expansion, although this was modified to include 97,000 square-feet of occupied and 46,000 square-feet of unfinished space.15
The first phase of construction began on May 13, 2011 with the demolition of a car wash and one story section of the mall, along with the gutting of the Dillard’s store.14 Southland received approval from the Lexington Planning Commission to amend its development plan on March 8, 2012.9 The amendments included the formation of a second commercial parcel along Richmond Road for lease or sale and the decrease of the retention pond in front of the mall. The church faced escalating costs that put the project $4 million over budget, although redesigning plans for the complex reduced that overage by $2 million. Disposing of the sludge in the pond and landscaping was projected to cost $750,000, with repaving of the parking lot costing an additional $1.25 million, but being able to sell or lease the commercial lots would make up for the shortfall.
Southland’s Richmond Road campus opened to worshippers on January 4, 2013.15
Former tenants included AllSports, Cinderella, Concord Custom Cleaners, Dave’s Holiday House, Dawahares, Diamond Gallery, Dillard’s, Dr. Klecker OD, For Friends, For Friends Too, General Nutrition, Gold Spot, Hollywood Nails, Home Accents, Knott’s Shoes, Kopper Popper, Lottery Station, Morrison’s, Musicland, Pal Optical, Pro Image, Radio Shack, Regis, Rite Aid, Roger’s Hallmark, Schwab’s Pipes n’ Stuff, Sears Portrait Studio, Shoe Sensation, Things Remembered, and Up the Creek.
- Henson, Jenna. Personal interview. 30 June, 2005.
- Goolsby, Jonathan. “City in the dark as Saul stonewalls.” 22 Sept. 2006. Business Lexington. 17 Oct. 2006 Article.
- Edwards, Don. “Ghosts of time catch up with everything, even malls.” 27 May 1999. Herald-Leader (Lexington). 17 Feb. 2007.
- Baldwin, Amy. “Lexington’s uncrowded mall.” 1999 May 24. Herald-Leader (Lexington). 17 Feb. 2007.
- Baldwin, Amy. “Shopping center malls the competition.” 1998 Nov. 16. Herald-Leader (Lexington). 17 Feb. 2007.
- Osbourn, Kevin. “Fayette Mall solidifies influence.” 1993 Jan. 4. Herald-Leader (Lexington). 17 Feb. 2007.
- Jordan, Jim. “Lexington shop pops 8 tons of holiday corn.” 1990 Jan. 8. Herald-Leader (Lexington). 17 Feb. 2007.
- Reynolds, Sharon M. “Heleringer’s.” 12 March 1984. Herald-Leader (Lexington). 17 Feb. 2007. (title unknown)
- Fortune, Beverly. “Southland Christian Church’s plan for mall site gains Planning Commission approval.” Herald-Leader [Lexington] 8 Mar. 2012: n.p. Web. 21 Aug. 2013.
- Sloan, Scott. “Ex-Lexington Mall owner won’t pay taxes on sale.” Herald-Leader [Lexington] 11 Mar. 2011: n.p. Web. 21 Aug. 2013.
- Sloan, Scott, Karla Ward and Andy Mead. “Southland Christian to buy Lexington Mall property.” Herald-Leader [Lexington] 4 Jul. 2010: n.p. Web. 21 Aug. 2013.
- Ward, Karla. “Southland commits to buy Lexington Mall property.” Herald-Leader [Lexington] 30 Aug. 2010: n.p. Web. 21 Aug. 2013.
- “Southland closes on Lexington property.” Herald-Leader [Lexington] 27 Sept. 2010: n.p. Web. 22 Aug. 2013.
- “Southland Christian Church Begins Demolition on Richmond Road Property.” Southland Christian Church 13 May 2011: n.p. Web. 22 Aug. 2013. Article.
- Sloan, Scott. “Born again: Southland services beginning at old Lexington Mall.” Herald-Leader [Lexington] 4 Jan. 2013: n.p. Web. 22 Aug. 2013.