Moorestown Mall owners hoping liquor licenses bring profits

Executives who recently won the right to sell alcohol at Moorestown Mall after a years-long battle are jubilant, and the reason has everything to do with dollars and cents in a world of mall retailing where restaurants are now key to making money.

The Pennsylvania Real Estate Investment Trust, a Center City-based owner of mid-Atlantic shopping malls, including Cherry Hill, Plymouth Meeting, and Willow Grove Park, lobbied heavily for last week's referendum eliminating Moorestown's century-old ban on alcohol sales.

The reason: Liquor licenses would enable the company to lure big restaurants with pockets deep enough to pay healthy rents at the South Jersey mall, which had lost business in recent years.

After failing in its first bid to overturn the law several years ago, PREIT won support this time by asking voters to approve four licenses only at its mall, rather than near the town's main street, which residents had opposed.

PREIT so coveted the right for its 48-year-old mall that it will pay $1 million per license. All will be attached to still-unnamed restaurants the company is courting and hopes to have open before next Christmas.

The consolidation of department store chains over the last few decades, as well as competition from new shopping centers and the bankruptcies of retailers in recent years, have made it hard for malls to attract sufficient tenants, shoppers, and rents.

For companies with public shareholders, such as PREIT, there is pressure to perform. Restaurants appear to be a revenue generator.

"In 1985, there were 53 department store chains. Today, there are about a dozen," said Joseph Coradino, who oversees leasing as president of PREIT Services L.L.C. and PREIT RUBIN Inc. "When you think about restaurants in an enclosed mall, they really have become the new anchors."

In October financial filings with regulators, PREIT disclosed that the average base rent at Moorestown was down 3.4 percent for the quarter that ended Sept. 30, compared with the same period a year earlier. It also was an unprofitable quarter overall for the company, with a $57 million net loss, compared with a $3.6 million loss a year ago.

For several years PREIT has been building restaurants at Philadelphia-area malls, starting with Plymouth Meeting, which had lost clout and customers to the King of Prussia mall nearby. Plymouth Meeting is doing better now, Coradino said.

Moorestown, which competes with PREIT's own newly refurbished Cherry Hill Mall, likewise saw sales per square foot fall as a massive redevelopment brought restaurants and a Nordstrom department store to Cherry Hill a few years ago.

Also in South Jersey, PREIT opened two new restaurants at Voorhees Town Center last week as part of what it calls a new Restaurant Row: Firecreek Restaurant & Bar and Doghouse Gourmet Burgers. Quarterly average base rent at that troubled mall was down 18.3 percent.

Contact staff writer Maria Panaritis at 215-854-2431, mpanaritis@phillynews.com, or @panaritism on Twitter.