Diamond Run Mall sits on 78 acres off U.S. Route 7 in Rutland Town, Vermont, just past the Rutland City line. It's a single-level enclosed mall, and it's been closed since 2019.
It opened in 1995 with Kmart, Sears, and JCPenney and grew to more than 60 stores. Kmart moved out to it from inside Rutland City.
The department stores left between 2014 and 2018. Once the last one closed, the mall had no anchor at all, and the businesses still trading were gone by the end of October 2019.
A permit issued in 2025 clears 361,200 square feet of the building for demolition. The old Kmart is excluded. Nothing has come down yet. The owner later pushed demolition into the next phase of the proposed Walmart Supercenter project.
The $4 million that moved Kmart
Rutland Town changed its municipal plan in 1987 so a shopping mall could go up on 92 acres near the junction of U.S. Routes 4 and 7, just south of the Rutland City line.
Zamias Services held an option on the land and had a state land-use permit by 1989. Nothing got built.
The recession of the early 1990s hit while a federal wetlands permit was still open and the financing wouldn't come together.
The tract sat empty for another five years. Kmart gave the city a specific reason to care.
The store was inside Rutland City and it intended to move out to the new mall, taking its shoppers across the line with it.
The city eventually agreed to a $4 million credit and required impact payments from the mall.
Zamias Services had initially asked for $6.2 million, with Central Vermont Public Service offices moving into the emptied Kmart.
Construction began in April 1994 on a $38 million loan. The building still had no name.
A public contest picked Diamond Run that November, a reference to the area's skiing.
Diamond Run opens with 12 stores
Diamond Run Mall opened on August 23, 1995 with only 12 stores operating in a complex planned for more than 60.
Kmart, Sears, and JCPenney were the anchors.
The nine smaller stores were Sbarro, Olympia Sports, GNC, MasterCuts, Regis, Claire's, County Seat, Gap, and Barbara Moss.
The ceiling decorations used a summer theme: flowers, kites, birds, and butterflies.
The tenant shuffle reached the older Rutland Mall too.
Hallmark, Lauriat Books, GNC, Regis, and National Record Mart were among the stores that moved to Diamond Run.
More chains opened before Diamond Run's October grand opening, including RadioShack, National Record Mart, Eddie Bauer, the Disney Store, Yankee Candle, and Payless ShoeSource.
Rutland Mall later closed, and its site was redeveloped for Home Depot.
REX TV & Appliance later occupied a unit beside the food court that had originally been reserved for a full-service restaurant.
The developers had been unable to sign a restaurant chain.
The city sues for its first payment
Rutland City sued Zamias for $100,000 in December 1997, seeking the first impact installment while the mall still wasn't fully leased.
The argument ran on through 1998. By January 2003, a payment plan was in place.
What money did arrive went into the ground downtown. The city spent it on sidewalks and streetlights, out of a fund named for the developer.
A 1999 agreement had set the terms for what followed.
It tied the annual payment to the mall's anchor stores: when a department store closed, the payment could fall in proportion to the space that anchor had held, with the unpaid part deferred.
From then on, what Rutland City collected depended on how well a mall in the next municipality kept its anchors.
Sears goes, and the payment falls
In October 2014 only one food vendor remained in the food court.
With Sears and several smaller stores preparing to leave, roughly two-thirds of the mall's storefronts were headed for vacancy.
Seven years earlier the mall had been 90.6 percent occupied.
BAI Rutland LLC had bought the property that February for $4.3 million, with occupancy under half.
Sears closed that December. JCPenney followed on April 5, 2015, and took 30 to 35 jobs with it.
The 1999 formula then did what it was written to do.
Rutland City's annual payment dropped from $100,000 to $44,828, and stayed there two years running.
The city was collecting less because two department stores in another town had closed.
Through those same two years the mall's owner was appealing a wholesale club proposed across Route 7; the company behind that project withdrew it in September 2016.
Kmart leaves and the mall empties
By January 2016 a church and a cheerleading studio were operating in former retail spaces, two storefronts were running auctions, and the food court was down to one vendor.
LaFlamme's Furniture had taken the JCPenney box the year before, about 50,000 square feet of it, and added displays from other local businesses.
It closed the Diamond Run store in 2017.
The furniture store became an argument as well as a tenant.
Rutland City counted it as an anchor and billed the mall for the space, and the mall's owner refused to pay that part of the bill.
Kmart's closure was announced in January 2018 and the store shut in April, which left the mall without any of the three department stores it had opened with.
Twelve businesses were still trading in September 2019, the same number that had opened the building 24 years earlier.
Management said redevelopment would close the mall. Two of those remaining businesses were also facing eviction over unpaid rent.
Mountain Man Jewelry and Mountain Music Vinyl moved into downtown Rutland and opened there on October 26, going back across the line Kmart had crossed in 1995.
Joli Hair Studio moved to Wales Street. The last tenants were out by the end of the month, and what they left behind was auctioned in November.
Walmart crosses back to Diamond Run
Diamond Run Mall is a closed single-level enclosed mall at 46 Diamond Run Place in Rutland Town, Vermont, just outside Rutland City.
It opened in 1995 with Kmart, Sears, and JCPenney, closed in October 2019, and is now permitted for demolition, with a Walmart Supercenter proposed for the site.
Walmart is currently inside the city, at 90 Shopping Plaza Road.
It became a major tenant of that plaza in the 1990s, in the same stretch of years Kmart left the city for the mall.
On September 24, 2024, Walmart and the site's developer told the Rutland Town Selectboard they wanted to move the store out to the former mall.
The Act 250 demolition permit came on October 6, 2025.
It covers 361,179 square feet of the mall and 254,113 square feet of pavement, and it leaves out the former Kmart.
By May 5, 2026 nothing had come down. The owner said the teardown would now happen during development of the proposed Walmart project.
The store on the current application is 181,000 square feet with 751 parking spaces, 10,000 square feet larger than the one announced in 2024.
Rutland Town approved its municipal-impact conditions on June 2, 2026: $30,000 of fire equipment and $125,000 a year toward another police officer.
A pre-hearing is set for September 10. No permit has been issued.
Spartan Arena, built behind the mall in 2004 and now run by Vermont State University, sits outside the demolition permit and is still open.
The former Kmart is the one part of the mall the permit leaves standing.
Nothing has come down yet, and the Walmart people in Rutland actually use is still on Shopping Plaza Road, inside the city.
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