Dec. 17, 2021

Bill Hinks, who has owned the Western Mall for 25 years, is selling the 30-acre development to a local investment group.

Hinks, the chairman of Furniture Mart USA, bought the property on the southwest corner of 41^st Street and Western Avenue in the 1990s with some investment partners. He transitioned into its sole owner and has continually renovated and expanded the multi-use center.

He closed on a sale to Sioux Falls-based Elgethun Capital Management this week.

“Believe me, it took a long time to make that decision,” Hinks said. “I love that place. I’ve watched everything.”

The Elgethun investment group is comprised of local families who want to invest in local real estate, president and owner John Barker said. He’s also a partner in the Western Mall investment.

“Everyone is local, business owners … real estate people, people who have a vested interest in the community,” Barker said. “There are lots of ways to make money, but the goal is to have an impact on the community we’re in.”

They purchased the property for $45 million.

Investors at that level generally would have come from out of state, Hinks said.

“When I did visit about it, I got New York, and there were people there with a lot of money and I just didn’t want that,” he said. “If I was going to do it at all, I had to find someone local that could do it and could take it over and just keep it going. So many malls – and I’ve seen a lot of them in my travels – they’re just empty, totally.”

Reinvigorating the Western Mall

The Western Mall might have found a similar fate to those struggling malls elsewhere had Hinks and some partners not decided to take over in the mid-1990s.

It was about 50 percent vacant. And the parking lot on the south side had “holes you could almost drive a car in and lose the car,” Hinks said. “That’s an exaggeration, but not much. It was really, really bad.”

When it opened in 1968, the Western Mall was the first enclosed regional shopping mall in the state, built on land that used to be Sioux Skyways Airport.

A Minneapolis developer was the owner and brought in Montgomery Ward as the first store. Other tenants followed, such as a Tempo variety store, the department store Britt’s and Walgreen Drug.

The movie theater, then the ABC North Central Theatres West Mall Theatre, showed its first feature in the fall of 1968.

The mall expanded in the 1970s with a 26-store south wing. Here’s a look at those early stores in a map created by Jeff Bray and 1978 and shared on the Greetings from Sioux Falls website.

But by the late 1980s, stores were shuttering. Montgomery Ward closed in 1981 and was replaced by ½ Price Store, which was part of Gordmans.

Hinks had many friends in business with locations at the Western Mall, and he was looking to put a furniture store in it.

“So I found a couple partners, eventually three, and we ended up making a bid and getting it, and our main goal was to see about growing it,” he said.

Then things started happening. Best Buy relocated from the center of the retail strip to the end, and Hinks moved South Dakota Furniture Mart into the middle.

Scheels, which today serves as the key anchor for the property, replaced the ½ Price store, which was demolished to make room for the new multistory building.

One of Hinks’s partners brought in the Champps Restaurant and sports bar, which today is All Day Café and Taphouse 41.

“We have the utmost respect for Bill,” Barker said. “He’s done something with that asset no one else would have. He put a lot of time and energy and money into converting that.”

Hinks said he typically would take half of whatever the property made each year and reinvest it in improvements – everything from updated facades and windows to most recently wider sidewalks he felt would be safer.

“What we attempted to do was to do things that would last,” he said.

The property today only has one vacancy, a more than 6,000-square-foot space that Hinks said he expects will fill soon. The buildings of the Western Mall total about 390,000 square feet, which does not include Scheels.

The sporting goods retailer has a ground lease and has expanded its footprint in the last decade to add a Ferris wheel, restaurant, candy shop and other interactive activities.

“Scheels drives so much traffic to all the side strips, the restaurants on the sides, and it’s one of the most highly trafficked areas in the state,” Barker said. “So you take that complex as a whole and it’s a unique asset.”

Future vision

The Elgethun group appreciated the Western Mall’s variety of uses, Barker added.

While it’s known for retail, there are 50 businesses within the property including many offices and professional services. They include a number of decades-long tenants and entrepreneurs.

That’s another reason for local ownership, Barker said.

“So you look at how you work with small business owners, and they go through ups and downs,” he said. “This would likely have been purchased by someone on the East or West coast, a pooled investment group just looking at investment return. Think about if that had been Bill’s group. You have to invest in growth and that comes at the expense of current economics. You might get a little lower return in the short term, but you get outside capital in the market and you don’t have that same long-term vision. Bill and I both saw that as such a key advantage, not outsourcing this to someone who doesn’t live here or care about the community.”

His group will continue to look at ways to improve the property, he added. There’s an expansion currently underway for 605 Ninja and “if and when tenants require space there are expansion opportunities without a doubt,” Barker said.

“What our tenants want is consistency and for them to know we’re not going to come in and change a lot of things. We’re going to do exactly what Bill agreed to do and that’s take care of the building, take care of the space and be a good landlord.”

His ownership group includes business owners and real estate investors, “so everyone will be thinking about ways to improve it, and we have a good team,” he added. “My goal would be 25 years when we look back that we’ve been able to take some of the big steps Bill took.”

As for Hinks, by closing on the sale before the end of the year, he said he likely won’t “get taxed quite as hard as next year” and his Furniture Mart business will be keeping him busy in the year ahead. The Sioux Falls headquarters is in the middle of a major expansion and there’s an opportunity to put up as many as nine new stores in the next year.

“So that’s exciting for me,” he said. “So I thought with that going through, it’s a perfect time to try and find somebody who will care for it in the right manner. It seems like God is just reaching out and helping me every way we’re looking at.”