As Terry Espy worked with a group recently that’s considering a major commercial development in the Wilmington area, she showed them Independence Mall.

In the end, they weren’t interested in a redevelopment project, preferring a piece of property where they could build from the ground up, said Espy, president of commercial development and real estate brokerage firm MoMentum Companies.

To turn Independence Mall, a more than 1 million-square-foot indoor mall at 3500 Oleander Drive, into a lifestyle center would be an expensive proposition, brokers say.

But their eyes, and those of others in the business community, are on the possibilities there because, as Espy says, “It is prime real estate.”

Foreclosure proceedings on part of Independence Mall, opened in 1979 and renovated in 2001, began in 2014 after Centro Independence LLC, owner of nearly 500,000 square feet of the property including the JC Penney wing, defaulted on a $110 million J.P. Morgan loan. As a result of its default status, the loan was moved to a special servicer in October 2014.

That special servicer has been in discussions about a potential loan modification with Centro Independence this year, according to recent reports from companies that analyze commercial loans. 

The latest foreclosure sale date has been set for July 12. But even with a potential sale and speculation about the mall’s future, drastic changes don’t seem likely any time soon.

“Independence Mall is a hot spot for shoppers in the midtown Wilmington area,” said mall general manager Helen Lewis in an email. “It has a solid national retailer base that continually attracts customers, which includes Hot Topic and Journeys.”

A national shoe seller, Vans, opened its first Wilmington-area store in March in 3,000 square feet at Independence Mall, and T-Mobile and Hershey’s Ice Cream opened new locations there this year, Lewis said.

The company that handles leasing and management of the mall, Madison Marquette, “has been working on a plan to update the center, which will feature esthetic and usable amenities including interior and exterior landscaping, interior painting, energy management upgrades and veteran designated parking spots,” Lewis said.

Some say indoor malls in general have fallen out of fashion.

As the developers planned The Pointe at Barclay at South 17th Street and Independence Boulevard, where the shopping, dining and entertainment center’s movie theater anchor tenant and two restaurant buildings are under construction, the idea of an indoor mall was never on the table, said Hill Rogers, broker in charge for Cameron Management.

“I think most malls are gradually coming out of favor,” Rogers said. “People aren’t developing new malls in new and big retail projects.”

Like Espy, Rogers can’t help but admire the location – nearly 80 acres at the corner of Independence Boulevard and Oleander Drive.

“I think it’s a great location; it’s great real estate … I think its highest and best use is going to be a mixed-use project,” that would maintain some retail but also potentially have a high-rise hotel, offices and a residential portion, Rogers said.

The city’s Create Wilmington Comprehensive Plan, adopted in March, describes the Independence Mall area as being suitable for redevelopment and infill as an urban mixed-use center.

“We’ve seen enclosed malls that haven’t adapted to demographics, retail and economic shifts fail or falter – not just in Wilmington, but across the country,” said Christine Hughes, senior planner for the city of Wilmington. “From a land use perspective, this represents an opportunity to infill and redevelop with a mix of uses, less emphasis on surface parking and better meet the evolving needs of a growing city like Wilmington.”

She said North Hills mall in Raleigh is “a great example of major redevelopment. Now occupying the old mall space is a two-story Target, and there are office, retail and residential buildings mixed into the overall site,” she said.

John Kane of Kane Realty Corp. considers the North Hills mixed-use area its signature project, according to the company’s website.

“I truly believe that somebody like John Kane who has a proven track record – in this current market, if they could be lured down [to work on Independence Mall in Wilmington], it would be awesome,” said Espy, who is also involved in commercial real estate and development in Raleigh.  

But even if big changes aren’t coming to 3500 Oleander Drive any time soon, change is probably inevitable, brokers say.

“You’ve got to stay vital,” Espy said. “It’s the responsibility of the property owner to always figure out what’s the up-and-coming thing. Or sooner or later, you’re going to be sitting there going, ‘Where did everybody go?’”