Sep. 16—The former Sears store that is attached to The Johnstown Galleria, but that had always been separately owned, was won last month by a storage company in an online auction against Galleria owner Leo Karruli.
Karruli, who bought the Richland Township mall in August 2022 for about $3 million, said he was disappointed by losing the bid for the 125,824-square-foot former Sears property.
Karruli said he bid more than $1 million on the old Sears location when it was auctioned on Aug. 23 through an online realty company, Crexi, but he relented when the price reached $1.15 million.
"I don't like the storage idea," he said. "I was trying to bring more traffic to the mall with another store like Target."
The former Sears department store location is one of the four anchor spaces at the Galleria.
Similar to the Sears site, the former Bon-Ton store is closed. Boscov's is in the midst of renovations while remaining open.
Those three anchor sites are independently owned.
A fourth anchor site is owned by the mall and leased to JCPenney.
The storage company that won the Sears property, which has not yet been publicly named, is working to close the deal within the next 10 days, said Jacob Walker. He brokered the deal for the company, which is owned by his father.
Karruli said that the bidder contacted him about purchasing the entire mall. Walker confirmed that his father's company has made inquiries to property owners adjacent to the Sears site, including Karruli and the ownership of the former Bon-Ton.
"He called me and asked, 'Do you want to sell the mall?' I said, 'No,' " Karruli said. "I've been building it up and it's worth more than it was before."
Karruli bought the mall last year after it had gone through foreclosure. Under Karruli's ownership, the mall has filled out most of its once-vacant storefronts.
Walker said his father's company declined an interview until the deal for the Sears property closes with the seller, Transformco, a private holding company formed in February 2019 to purchase the surviving assets of Sears Holding Co.
Sears closed its Galleria store in 2018. The building subsequently came under the ownership of Transformco.
According to the Cambria County Tax Assessment Office, Transformco has kept its tax payments up to date, but it had successfully appealed the property's tax assessment and lowered its payments.
Based on 2023 tax rates, the property generates $25,936 in tax revenue for Richland School District, $14,518 for Cambria County and $4,522 for Richland Township.