The Anaheim Gardenwalk entertainment center near Disneyland Resort has faced its share of leasing challenges since its 2008 opening, a good portion of it sitting vacant or underutilized for a large portion of its history.
But one big tenant that got away before opening its doors may have turned out to be the best deal the Gardenwalk’s current owners have made since acquiring the 466,000-square-foot center in 2012, based on a startling new investigative report by the Arizona Republic.
In 2014, I reported on Gardenwalk, which is down the street from Disneyland and the Anaheim Convention Center, signing the Toby Keith-branded dining and entertainment venue I Love This Bar & Grill to a 20,000-square-foot lease.
At the time it was the largest lease by square footage there following its sale to New York-based investment firms Arcturus Group LLC, Avenue Capital Management and Elliott Management Corp., which paid a reported $73 million for it five years ago.
The planned Toby Keith location was billed as the country music bar and grill chain’s second in California and first in OC.
“Anaheim is a destination for many, and these country music fans will now have a perfect location, said Frank Capri, chief executive of Boomtown Entertainment, the Phoenix-based owner-operator of the chain, in a press release when the lease was announced.
The Toby Keith location was scheduled to open by the end of 2014, but the bar and grill never materialized, and a reason was never disclosed.
By early last year, documents show that Gardenwalk officials had alerted city officials that the tenant wouldn’t be moving in at all.
The Gardenwalk’s issues apparently weren’t unique.
According to the recent blockbuster watchdog piece in the Arizona Republic, where Boomtown Enterprises was located, Frank Capri wasn’t the executive’s real name. In fact, he was Frank Gioia Jr., a onetime “soldier in the New York Mafia” with a lengthy and sordid rap sheet, the report said.
After entering the Federal Witness Protection Program and changing his identity, Capri would “morph from a mobster into a real-estate developer and restaurateur,” and use fraud as a means to build the restaurant chain, the report alleges.
“He or his companies negotiated deals to build Toby Keith restaurants with mall owners and developers throughout the United States, then took tens of millions of dollars meant to pay for construction and walked away,” the report said.
It looks as though the Gardenwalk owners got off cheap, as their owners never gave Capri any money, according to related court documents.
Other U.S. properties, including California retail locations in Oxnard, Newark, Folsom and Rancho Cucamonga, lost tens of millions of dollars combined as Capri would take “large payments for tenant improvements they never intended to make” and move on, often without opening up the bar and grill.
Numerous fraud-related lawsuits have been filed against Capri in the past few years, the report said.
In addition to Anaheim Gardenwalk, Capri also explored signing a deal at Costa Mesa’s Triangle shopping center, which sold last month for about $55 million, but never inked a deal, real estate sources tell the Business Journal.
Since the bar and grill has come and gone, Gardenwalk has landed larger tenants, including another music venue, a 44,000-square-foot House of Blues, which is open.
The center is now about 70% leased, according to CoStar Group Inc. records.
Rental Ramp Up
An affiliate of Irvine-based Bascom Group LLC has made another big purchase in Arizona, snapping up a pair of complexes in North Scottsdale for $148 million.
The two properties, Legend at Kierland and Tradition at Kierland, totaled 724 units and sold for a little more than $204,000 per unit.
The deal follows Bascom’s recent $70.2 million buy of another three complexes in the Southern Arizona area, adding 812 units to its portfolio there.
Bascom officials said they plan to “recapitalize the (recently bought) properties with extensive exterior and interior renovations.”
No word on the Arizona apartment properties’ policies on renting to those serving in the Federal Witness Protection Program.
