Diamond Run Mall
Retailer / private label
UnclaimedDiamond Run Mall was an enclosed shopping mall in Rutland Town, Vermont, that operated from 1995 until its closure in 2019.
Last updated August 25, 2026
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Overview
Diamond Run Mall was an enclosed regional shopping mall serving Rutland and surrounding communities in Vermont. Located at the southern end of Rutland Town, the property was developed by Zamias Services, Inc. on approximately 92 acres acquired by Damian Zamias in 1986. It was conceived as a major retail destination for the Rutland area and became the community's second enclosed mall after Rutland Mall. The project encountered a lengthy development process. A municipal-plan change in 1987 made the proposed use possible, and an Act 250 land-use permit was approved in 1989. Construction nevertheless took several more years because the developer needed a federal wetlands permit and struggled to secure investment capital. The project also involved negotiations with the City of Rutland over a proposed municipal credit connected with relocating Kmart from downtown and moving Central Vermont Public Service offices into the former Kmart space. A compromise produced a $4 million city payment, subject to impact-fee obligations, and Zamias eventually obtained a $38 million construction loan. Building work began in April 1994. The completed mall contained more than 445,000 square feet of retail space and was designed with more than 60 stores. Its name was selected through a local contest in 1994; representatives associated the phrase "Diamond Run" with the region's prominence as a skiing destination. The first twelve stores opened during a ribbon-cutting ceremony on August 23, 1995, followed by an official grand opening in October. Original anchor tenants were J. C. Penney, Sears, and Kmart. Early inline tenants included Gap, Barbara Moss, County Seat, Claire's, Regis, MasterCuts, GNC, Olympia Sports, and Sbarro, while later openings included Payless ShoeSource, Yankee Candle, Disney Store, Eddie Bauer, National Record Mart, and RadioShack. The mall's interior used a summer-themed decorative scheme featuring suspended images of butterflies, birds, kites, and flowers. Diamond Run Mall initially drew stores away from the older Rutland Mall and became an important regional retail center. Its occupancy rose above 90 percent after Old Navy opened in 2005. The property also benefited from the nearby Rutland Regional Field ice rink, built in 2004 and later acquired by Castleton State College and renamed Spartan Arena. A covered walkway connected the arena to the mall. The property experienced financial and tenancy problems throughout its life. In the late 1990s, the City of Rutland sued Zamias over unpaid impact fees, and the mall was not yet fully leased. Although property-tax payments became current after early delinquency, the impact-fee dispute continued for years and was addressed through a payment plan negotiated in 2003. Retail vacancies became more severe during and after the Great Recession. The mall changed ownership in 2007, when it was sold to Gemini Real Estate, and again in 2014, when it was sold to BAI Rutland. Zamias remained involved as manager. By 2014, occupancy had fallen below 50 percent, and some tenants attributed the decline to rents they considered excessive. Anchor losses accelerated the decline. Sears announced a closure in 2014, J. C. Penney departed in 2015, and LaFlamme's Furniture, which replaced J. C. Penney, closed in 2017. Kmart closed in April 2018, leaving the mall without an anchor store. Zamias announced in 2019 that the property would close and be redeveloped as a new shopping center. The last businesses left or closed in October 2019, and mall fixtures and other assets were auctioned the following month. Redevelopment plans presented to the Rutland Select Board called for demolition of the mall and construction of a 170,995-square-foot Walmart Supercenter, potentially accompanied by an expansion of Spartan Arena, a hotel, and additional retail tenants. The mall itself, however, remained defunct after its 2019 closure.
History
Diamond Run Mall originated with Damian Zamias's 1986 purchase of approximately 92 acres at the southern end of Rutland Town. A change to the town's municipal plan in 1987 enabled mall development, and Zamias applied for an Act 250 permit in 1988. The permit was approved in 1989, but construction was delayed by the need for a federal wetlands permit and by difficulty obtaining financing. The project also required an agreement with the City of Rutland. Zamias sought municipal support related to moving Kmart from downtown Rutland City to the proposed mall and relocating Central Vermont Public Service offices into Kmart's former premises. The city ultimately agreed to a $4 million credit, below the initially requested amount, while requiring the developer to pay impact fees over a fifteen-year period. After securing a $38 million construction loan, Zamias began construction in April 1994. By September 1994, plans called for more than 445,000 square feet of retail space, over 60 stores, and three anchors: J. C. Penney, Sears, and Kmart. The mall's name was chosen through a community contest in November 1994. The reference to a diamond run reflected the importance of skiing in the surrounding region. The first twelve stores opened on August 23, 1995, and the official opening followed in October. Early tenants included the three department-store anchors, Barbara Moss, Gap, County Seat, Claire's, Regis, MasterCuts, GNC, Olympia Sports, and Sbarro. The opening later expanded to include retailers such as Payless ShoeSource, Yankee Candle, Disney Store, Eddie Bauer, National Record Mart, and RadioShack. Its interior design used a summertime motif with painted and suspended images of butterflies, birds, kites, and flowers. The new mall affected the older Rutland Mall, drawing away several of its stores, including National Record Mart, Regis, GNC, Lauriat Books, and Hallmark Cards. Diamond Run itself was not free of financial problems. It was still not fully leased by late 1997, and the City of Rutland sued Zamias over a $100,000 claim involving unpaid impact fees. The city reassessed the property's value in 1998 and observed that property-tax payments had become current after delinquency involving the initial 1995 taxes. The impact-fee issue remained unresolved for several years before a payment plan was negotiated in 2003. The city said those payments supported sidewalk and streetlight improvements. An ice rink, Rutland Regional Field, was built behind the mall in 2004. It was purchased five years later by Castleton State College and renamed Spartan Arena; a covered walkway connected the arena with the mall. Old Navy opened in 2005 and helped occupancy rise above 90 percent. Nevertheless, tenant turnover increased. Payless ShoeSource and Ritz Camera closed, and Gap later departed in part because Old Navy, then under the same corporate ownership, occupied the market segment. A proposed full-service restaurant space was instead used by Rex TV and Appliance after the developer could not secure a suitable restaurant chain. The mall changed hands in 2007, when Gemini Real Estate acquired it, and again in 2014, when BAI Rutland became the owner. Zamias continued as manager. Management attributed much of the decline during Gemini's ownership to the Great Recession, while tenants later cited high rents. By 2014, occupancy was under half of the available space. Sears announced its departure that year, J. C. Penney closed in 2015, and LaFlamme's Furniture, which replaced J. C. Penney, closed in 2017. Kmart closed in April 2018, leaving the property without an anchor. In 2019, Zamias announced plans to close the mall and replace it with a new shopping center. The final stores and businesses left in October, and the mall's assets were auctioned in November. Proposed reuse plans included demolishing the former mall and building a 170,995-square-foot Walmart Supercenter, with possible Spartan Arena expansion, a hotel, and additional tenants. Diamond Run Mall did not continue operating as an enclosed mall after October 2019.
- 2019
Operations end
[1]The remaining businesses left or closed in October, ending the mall's operating life.
- 2018
Final original anchor closes
[1]Kmart closed in April, leaving the mall without an anchor tenant.
- 2014
Sold to BAI Rutland
[1]BAI Rutland acquired the mall as occupancy fell below 50 percent.
- 2007
Sold to Gemini Real Estate
[1]Gemini Real Estate acquired the property.
- 2005
Old Navy opens
[1]Old Navy opened and temporarily pushed mall occupancy above 90 percent.
- 2004
Ice rink opens nearby
[1]Rutland Regional Field opened behind the mall, later becoming Spartan Arena under Castleton State College ownership.
- 1995
Mall opens
[1]The first stores opened on August 23, followed by the formal grand opening in October.
- 1994
Construction begins and mall name selected
[1]Construction began in April after financing was secured, and the Diamond Run Mall name was selected through a local contest in November.
- 1989
Act 250 permit approved
[1]Vermont approved the project's Act 250 land-use permit after the initial application in 1988.
- 1986
Development site acquired
[1]Damian Zamias acquired approximately 92 acres at the southern end of Rutland Town for a proposed shopping mall.
Products and positioning
A regional enclosed shopping mall intended to serve Rutland and nearby Vermont communities with department stores, national specialty retailers, food service, and entertainment-adjacent access to Spartan Arena.
Department store · 1995
J. C. Penney
J. C. Penney was one of Diamond Run Mall's three original anchor stores. Its broad department-store assortment helped establish the property as a regional shopping destination. The store closed in 2015, after which LaFlamme's Furniture occupied the former anchor space for a time.
Department store · 1995
Sears
Sears opened as an original anchor and provided department-store merchandise, appliances, tools, and related categories. Its announced closure in 2014 was an important stage in the mall's loss of major tenants.
Discount department store · 1995
Kmart
Kmart was an original anchor and was central to the development agreement involving relocation from downtown Rutland. Its April 2018 closure removed the last of the mall's original anchors and left the property without a department-store draw.
Apparel retailer · 2005
Old Navy
Old Navy opened in 2005 and temporarily strengthened the tenant mix. Its arrival helped occupancy exceed 90 percent, although the later departure of other apparel tenants, including Gap, illustrated the mall's increasing retail pressure.
Mall inline stores · 1995
Specialty retail and services
The mall's inline tenant mix included apparel, footwear, beauty services, fitness supplements, sporting goods, books, music, gifts, electronics, and fast food. Named tenants over its operating history included Gap, Disney Store, Eddie Bauer, GNC, Olympia Sports, Sbarro, RadioShack, Yankee Candle, Claire's, Regis, MasterCuts, and National Record Mart.
Brand decisions
2019
Close and redevelop the mallStrategyBackground
The property had suffered prolonged tenant losses, occupancy below 50 percent, departures by all three original anchors, and continued pressure from vacancies and rent concerns.
Action taken
Zamias announced that the mall would close and be demolished for a proposed shopping-center redevelopment, potentially including a Walmart Supercenter, hotel, additional tenants, and an expanded Spartan Arena.
Aftermath
The remaining businesses closed or moved out in October 2019, and the mall's assets were auctioned the following month.
1995
Launch the Diamond Run Mall retail complexProduct launchBackground
The project was intended to create a major regional shopping destination and to attract Kmart from downtown Rutland City.
Action taken
The mall opened its first stores in August and expanded its tenant lineup for the formal opening in October, with J. C. Penney, Sears, and Kmart as anchors.
Aftermath
The opening drew stores away from the older Rutland Mall and initially established Diamond Run as a significant local retail center.
1988
Pursue regulatory approval for a regional mallStrategyBackground
Zamias Services sought to develop a large enclosed shopping mall on land at the southern end of Rutland Town, requiring Vermont Act 250 approval and additional environmental permitting.
Action taken
The developer applied for the Act 250 permit in 1988; approval followed in 1989, although construction remained delayed by wetlands permitting and financing difficulties.
Aftermath
The project eventually proceeded and opened in 1995 with more than 445,000 square feet of retail space.
Construction loan. $38 million (1994)
Sources1 sources
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