Galleria's new owner says mall's 'not dead,' vows hard work to reverse years of decline

Oct. 8—JOHNSTOWN, Pa. — Despite the foreclosure on The Johnstown Galleria's former ownership and visible signs of entrenched troubles — vacant storefronts, a near-empty food court, potholed entry roads and parking lots — someone purchased The Johnstown Galleria in August with a high bid of $3.15 million.

The online bidding was anonymous and the new owner was a mystery. But a month after the auction, Leo Karruli appeared quietly this week in the mall's administration office, almost as if the former management went to lunch and handed him the keys before they stepped out.

"The Johnstown Galleria doesn't go bankrupt anymore," he said. "I will do everything in my power to fill it up."

Karruli, 55, already is coordinating with local contractors to fix air conditioning units, setting up meetings with big-name stores to fill the mall's shopping areas, negotiating with popular restaurants to open in the food court — and he said he's looking forward to paving the mall's parking lots and roads when the winter breaks.

"I don't sleep, I work," he said. "All day, all night. Like, you see me over here, you can come at 10 o'clock, 11 o'clock, 12 o'clock — I'm here."

'I saw the potential'

Karruli was born in Albania, but his family lived in Italy for much of his life — until he moved to the United States in the early 1990s, becoming a restaurateur and property developer.

To talk about the hard work of his parents and his growing up in poverty would have been an interview he'd gladly give, but it would consume an entire day and he'd get emotional, he said.

He's not a corporate entity of the sort that previously had a stake in the Galleria's complex web of ownership since a local developer, the late George Zamias, sold his mall in 2008. That sale was to Gemini Real Estate Advisors, of New York.

Then, Adar Johnstown LLC, of Florida, assumed the mortgage in 2014 and faced a foreclosure judgment of $15 million in 2021, leading to The Galleria's creditors writing off the debt and operating the mall through Spinoso Real Estate Group, then auctioning the mall off to the highest bidder — Karruli.

"I was happy to win the auction, and I am very pleased with Johnstown," Karruli said. "I came before I purchased. I like it. I fall in love. So now it's for me to go back to work and make this place full like it used to be before."

Karruli's debt is considerably smaller than that of previous ownership. Still, in an interview on Thursday at the mall, he didn't hesitate to answer the question — why buy a dying mall for $3 million?

"I saw the potential the mall in Johnstown has," he said. "The mall really is not dead if somebody wants to run it right."

'With my hard work'

Karruli takes pride in opening the mall's doors in the morning to greet the members of the senior walking club that takes laps around the center. He cleans bathrooms, takes out the garbage and mops where needed.

"I take properties where business is very down," he said. "And with my hard work, seven days a week — I got a good family, good wife — I make sure I fill it up. I never fall down. So I make sure all my businesses are successful. I take them from the ground and build them up."

With his insistence on running the place himself, he's in the category of mom-and-pop owners. As such, he doesn't need a team of administrators.

Former employees of Zamias Services were retained by the mall's receiver, Spinoso Real Estate Group, through foreclosure. Now they are gone. Karruli addressed rumors that he laid people off.

"I told them I have my own crew, but it was not my intention to fire anybody, but some people have a different direction," he said. "Some people may have decided not to work with me. I didn't ask them to, to be honest with you."

He said he didn't count how many employees were formerly on the management's payroll, but now it's him and four others. For occasional, specialized work, he has local subcontractors on call.

The mall was losing money, he said. He couldn't say what previous management was doing well or not so well, but having fewer employees in administrative positions means he can pay off his mortgage while also investing in the mall to attract tenants with affordable rent.

Johnstown entrepreneur Jacob Moore is set to open a roller skating rink in the Galleria. He's also relocating his restaurant, CJ's Surf and Turf, to the mall.

"We've been in negotiation with previous management (Spinoso Real Estate Group) for two months prior to Leo," he said.

However, Spinoso didn't necessarily set the table for Karruli to make a smooth transition, Moore said.

"Leo is a fantastic guy and I'm happy to do business with him," Moore said.

Upgrades, high taxes

Sitting down with The Tribune- Democrat while waiting to meet a specialist to fix one of the mall's air conditioning units, Karruli said he considers himself a worker more than an owner.

Records at the Cambria County Recorder of Deeds Office haven't yet been changed to reflect Karruli's control of the mall. Adar Johnstown LLC is still listed as the owner.

Ownership of the mall, as has been said by Zamias officials, is composed of layers that will present challenges to Karruli.

The portion that lenders foreclosed on — the portion that Karruli now owns — is "the core campus" of The Galleria. Barring JC Penney, which leases its store from the mall, the mall's three other anchor stores are not included.

The Boscov's, Bon-Ton and Sears locations are owned independently and were not part of the deal. Boscov's is the only one of those independently owned anchors that is still open.

"I don't own Bon-Ton and I don't own Sears," Karruli said. "That's a challenge because I want to do some pressure-washing and painting and resurface parking lots. I want the owners of those properties to be on board with me, because if I do my side, I don't want that side to look bad. People, regular customers, don't know what's owned by different people. People will think 'Leo owns that.' "

Another challenge will be affording the property taxes, which he said are much higher than taxes in Florida and North Carolina, where he also owns shopping centers.

Karruli moved from Queens, New York, to Florida in 1991 and opened a restaurant that he's operated for 31 years. While operating the restaurant, Karruli also invested in houses and commercial properties, including shopping centers, he said.

His net worth as of June 2018 was $5.4 million, according to campaign documents filed online with the state of Florida.

Karruli ran for office in Florida State Senate District 16 that year. However, his opponent in the Republican primary, longtime Clearwater politician Ed Hooper, handily won that nomination, The Tampa Bay Times reported.

The Facebook page for the restaurant, Leo's Italian Grill, shows a post from this week announcing the end of that chapter of his life in Palm Harbor, Florida.

"Thank you for all you have done to bring people together," one customer wrote. "You brought a lot of community together," another customer posted. And another: "I hope you open up another place."

Karruli said he grew tired of restaurant work and enjoys property development more.

Karruli lives in Johnstown, renting for now in Richland Township while preparing for his wife to follow him north from Florida. He said they also have three children, ages 25 to 17.

"I'm here every day," he said. "For me, there's no day off until the business can work by itself.

"Other commercial properties I've had, there's been problems in the beginning. I make sure now I have a manager so I don't have to stay there anymore. But in Johnstown, I have to stay here to work hard to make sure, because it's a beautiful town. It's nice, warm people."