Man with a plan
WORTHINGTON — With the Worthington City Council’s decision last week to enter into negotiations with PBK Investments to potentially redevelop the Northland Mall site, many may be wondering who or what is PBK Investments — and if its vision for the property is too good to be true.
Brian Pellowski, the owner of PBK Investments and a native of Winona, has over 30 years of experience in the development business. He got into the real estate business in 1980, and sold houses for a couple of years before getting into the commercial side of real estate by buying some investment properties in 1984.
“I formed a company with a couple friends of mine, and we did development projects in rural America for elderly housing,” Pellowski said. “We (also) did some with historic rehabs and some brand new properties. We developed at least 1,500 units of housing between 1984-1989, and we still own some of those properties today.”
In 1989, Pellowski separated from the business with his friends to form PBK Investments in Minnetonka.
“I started acquiring more real estate in the early ‘90s from banks when there were foreclosures, and I bought about 500,000 square feet of centers in a couple years,” Pellowski said. “I still own most of them today.
“In 1995 I built the movie theater in Fairmont, and I still own it. However, I just leased it to the theater owners early this year that run the theater in Worthington.”
Pellowski began involvement in grocery-anchored retail development in Mound in 2003, and also developed an AT&T free-standing building in Hibbing. In addition, he owns property in several states, and also began a private lake development in Omaha, Neb. He is currently working on a development project in Bloomington for a strip retail mall, and converted an old dealership into a LA Fitness and a Goodwill Store in 2008.
As far as previous experience with developing a mall, Pellowski cited another project that hits close to home.
“I acquired the Marshall Square Mall from a lender in 1995, and have owned it since then,” he explained. “Currently I’m in the process of redoing that mall, as well, from an enclosed mall to a strip retail, apartments and a hotel. I have a similar vision for the Northland Mall as I do for the Marshall Square Mall.”
Pellowski first heard about the Northland Mall site from Worthington Regional Economic Development Corp. (WREDC) Manager Abraham Algadi, who sent out letters to numerous mall owners to encourage them to take a look at the Oxford Street property.
“I came down for a visit and quite honestly after I left, I didn’t know how someone was going to rehab it and I was not very interested,” Pellowski said. “After being in the business for 30 years, I’ve never seen a worse property.”
However, Pellowski had a change of heart.
“I sat down and looked at it from a different perspective and decided to make another trip to Worthington,” Pellowski said. “To a degree, it was the people that are leading the city that changed my mind ... you’ve got a very good community here.”
Pellowski said that once he made his second trip to Worthington, he told officials that he had good and bad news.
“The good news is that I do have interest,” he said. “The bad news is I have to completely scrap the mall, and that’s kind of how it all started back last summer.”
Pellowski’s vision for the Northland Mall includes developing a strip mall retail center with housing and other types of housing development in the back of the property, and to create a new site for the movie theater.
“I’ve spent time there and it’s a diverse city and I think that there is certainly a serious need of housing, and the site has space for it,” Pellowski said. “I’ve created a site plan and vision of what it looks like.
“Once you get that going in there, you’ve got a big piece of property set with housing and it works very well.”
Algadi attested to Pellowski’s vision and credibility.
“I think we found the right partner in pursuing this development project,” Algadi said. “They’ve been in business a long time and have a good track record with these commercial properties. He (Pellowski) has great connections in retail, and he knows Minnesota culture and is familiar with us — that is very important in this process.”
The vision for the retail part of the mall represents a drastic change from the current layout. Pellowski explained how a strip mall setting is a more profitable and better fit for Worthington.
“People like to drive up to the door, and fewer people are going to an indoor shopping mall,” he said. “Even in the big cities, the mall is not having the same success because people don’t have time to spend all day at the mall — nor do they want to.”
Pellowski added that the smaller, enclosed shopping centers were designed in the early ’70s, and in today’s world that design is a dying one.
“The real drift of being able to take a mixed-used project is the hot thing in development right now,” Pellowski said. “Basically building a city within a city, that’s where the development process is today.”
The big question is, what is the next step in the redevelopment process for the Worthington mall?
“The most important thing is to acquire the property from the current owner of the mall — Mike Kohen — and to work out on a development agreement,” Pellowski said. “Once we have that in place is when we can start looking further down the road.
“It’s a long process. (In) a development project like this you don’t talk weeks or months — you talk in years.”
Pellowski said he and Worthington city officials have reached out to Kohen’s lender, and Pellowski is confident in an eventual deal.
“It’s in both of our interests to work this thing through and we’re doing that,” Pellowski said. “He’s (Kohen) is going to have more and more pressure on him, because the one part of that property has a court order to tear it down” — referring to the former KMart building. “Once those things start happening, you keep losing any value. At some point, the lender has to give up.”
Despite the long process, Pellowski is hopeful for the future and believes new life will be given to the Northland Mall. He expects to make his next visit to Worthington sometime this month.
Daily Globe Reporter Erin Trester may be reached at 376-7322.