"We're going to do a major demolition and remove the existing mall,"  said Stephen Karp, the billionaire mall magnate and chairman of New England  Development, a Massachusetts-based real estate firm. New England partnered  with Eastern Real Estate and Lubert-Adler to buy the 80-acre mall in October  for $35.5 million.

The decision transforms the Palm Beach Mall's purchase from a bargain-basement  deal into a major redevelopment, the largest retail project in the area.

Plans are to throw open the doors to the Palm Beach Fashion Outlets by 2013.

Between the cost of planning and site prep work, plus the actual construction,  the mall's price tag is likely to be "well over $100 million,"  said Rob Jacoby of Menin Development in Palm Beach.

Menin Development, which built Downtown at the Gardens in Palm Beach Gardens,  was one of several developers vying to buy the mall from ORIX Capital  Markets, which took control after Simon Property Group let the mall go into  foreclosure in 2009.

Karp declined to say how much it would cost to build the Palm Beach Fashion  Outlets, and he said he wasn't ready to discuss details of the plans,  either. Previously, his company has said the outlet center would be 1  million square feet.

Karp said formal plans would likely be filed with the city of West Palm Beach  within the next 90 days. Talks have already been ongoing with city staff.

Karp acknowledged that the decision to bulldoze the old mall reflects a major  commitment to the project and a belief the result will prove profitable.

"We feel very comfortable with the plan," Karp said. "Everything  is going really well. It's still very much a go. We're probably talking to  over 100 tenants right now, and some of them are in different stages of  negotiations, some of them with lease requests."

As part of the redo, Karp said there are plans to keep JCPenney around: "We'll  probably build a new Penney's store so they can stay in business." JC  Penney and George's Music remain open, with the rest of the property a ghost  town.

Marketing materials shown at trade shows have listed a number of proposed  premium outlets, including Nordstrom Rack, Bloomingdale's Outlet Store and  Neiman Marcus' last call. Other outlets listed are Nike, Gap, Old Navy and  Ralph Lauren. Big-box stores such as TJ Maxx, Bed Bath & Beyond and the  Burlington Coat Factory also have been listed. BJ's Wholesale Club also is  said to be interested.

Karp said it's too soon to talk specific stores because leases have not yet  been signed.

Karp did confirm that a grocery store is being considered, and he said he's  fielding interest from several grocery store companies. He said the store  would be placed on out-parcel, separate from the fashion outlet complex.

The idea of spending millions of dollars on a new shopping mall, as the  economy struggles to recover from recession, may sound like an ambitious  proposition, but Menin's Jacoby said the site's location along Interstate  95, plus the allure of the outlet stores, makes the deal likely to succeed.

"Steve knows what he's doing," Jacoby said."