At Genesee Valley Center, a 1.3 million SF enclosed shopping mall in Flint Township, MI, we were faced with a $1.2 million dilemma that featured a major capital project. At first, we were skeptical to commit, knowing that this wasn’t part of our long-term plans. However, we understood the potential trajectory and impact that this decision would make on the day-to-day operations of the property.
Updating the chillers in the central plant of Genesee Valley Center was going to be a huge undertaking for the mall and SREG. Existing chillers provided heating and cooling services for the anchor stores and nearly 65 in-line tenants at the property. It was apparent that this equipment would not make it another six months and a decision needed to be made.
We decided to approach this in a neutral way and present all options to ownership. First, we fully researched all possible solutions, while hiring the best available consultants to help guide the process. This led us to create a well-thought-out plan.
We presented the following materials to ownership:
Photos of what we were facing
Explanation of the drivers of the cost
The risks (if deferral was chosen)
Researched lease language to review go-dark and rent impacts for lack of cooling
Along with the above materials, we also put together a thorough financial analysis to compare deferral against replacement options that highlighted several key points:
Increase R&M Costs
Lease Obligation Exposure
Impact of Sale Price
Capital Cost Amortization
Local Utility Incentive
Reduced Utility Costs
Ultimately, we proceeded with the chiller replacement at Genesee Valley Center. After careful thought, and plenty of strategizing, we provided a long-term solution to this issue. This decision was based on a lot of factors, but especially the fact that this new chiller would affect the future of tenants, customers, and the property.
Putting together a plan and cost analysis helped us approach the project methodically and practically.
To achieve our goals and help us make the best possible decisions, we lay out difficult situations with all options and outcomes in mind. At SREG, we value thoroughness and conciseness; an incredibly necessary approach on all projects we undertake at our properties.
Genesee Valley Center is an enclosed shopping mall with 1.3 million square feet of leasable area. Located outside of Flint, MI in the heart of Genesee County, GVC features an open-air shopping, dining and entertainment plaza, The Village, including 120+ shops and eateries like Macy's, Torrid, JCPenney, Wahlburgers, Victoria's Secret, Mo Pete's Sports Retreat, Box Lunch, Kay's Jewelers, H&M, Bar Louie, The Buckle and so much more.