Matt Nilsson took a chance on his first business venture. In January, he bought and opened doors on The Pines Deli in Mountain View Mall.

He wasn’t sure that there would be enough foot-traffic to drive customers into his restaurant, but he would make do until the new major tenant moved into Kmart’s vacated space, just a few doors down.

Two weeks ago, the mall’s management called a meeting of store owners and managers in that wing and Nilsson was certain that the new tenant would be announced.

In what came as a complete shock to Nilsson and twelve other business owners and managers, the mall management told them to look for a new home, their existing stores would be bulldozed into a parking lot used for the remaining stores.

”I feel deceived,” said Nilsson. ”I based my decision to come here on them telling me that we were going to get a major national company in the Kmart spot.” Nilsson doesn’t yet know where he will relocate his business.

Rocky Morgan, owner of Captain Morgan’s Toy Chest in the same wing of the mall, felt equally betrayed. ”I would not have stayed after the holiday season, if there wasn’t someone to replace Kmart,” he said. Overall it’s kind of disappointing with the owners not caring about the local people.”

Kevin Burns, a spokesman for the mall’s owner SIMA Management Corp. in Santa Barbara, Calif., ”categorically” denies that the store owners were misled. Burns said that the company had not represented to the tenants that it was courting a major national chain store for the vacant spot. From time to time, he said owners would approach the management company with rumors and it would either confirm or deny them. ”As the owner of our property, we go out of our way to have good relations with our tenants,” he said.

Tenants said that two weeks ago, the SIMA managers presented them with a plan for knocking down the north wing of the mall, paving it with a parking lot and building free-standing stores on the periphery of the parking lot. SIMA representative Burns would not comment on the plans.

Bend River Mall, with about 10 open spaces for lease, stands to gain from the outflow of retail from Mountain View Mall. ”We would not be able to accommodate all of them,” said Dean George, manager of Bend River Mall, who was somewhat surprised at Mountain View’s announcement. ”We’d be interested in talking with them. We have talked with some already.”

Despite its vacancies, Bend River Mall is in a more solid position with large retailers, Bon Marche and Sears anchoring its property. Bon Marche is in its second year of a 20-year lease. Sears’ lease has run out but has a 5- or 10-year option to continue, according to George.

Sharon Raske and her husband S.R. ”Bud” Raske have run their business, The Oregon Store, in the Mountain View mall since 1989. They own another branch in the Bend River Mall and have Internet and wholesale operations. Sharon Raske is upbeat about the proposed changes. ”Any change at that mall is a positive,” she said. ”It’s better than what’s happening now, which is nothing.”

In her case, SIMA management is offering her a relocation package to fill one of the empty stores in another wing of the mall. ”We’re excited. We’ll stay in that mall,” Raske said. ”For our business, the move won’t be disruptive because we have this other entity.”

The mall, after demolition ends, will be considerably smaller but will still be anchored by GI Joe’s, Ross Dress for Less and JC Penney. But its other tenants have been in flux for a while.

Last August, 21-year Mountain View Mall tenant Shomeyer Jewelry closed its doors, leaving the mall about a third empty. At that time, mall manager Josh Rutter told The Bulletin that the mall’s owners had plans to upgrade, but he couldn’t discuss them.

This new ”upgrade” will affect 13 stores in Mountain View Mall: The Oregon Store, The Pines Deli, Bob’s Pizza, Orange Julius, GNC, Space Balls arcade, Radio Shack, Payless Shoe Source, 3rd Millennium, Captain Morgan’s Toy Chest, Bare Elegance, Sundaes West and Candy Shoppe.

Bend Chamber of Commerce executive director, Gary Peters said that he hopes to work with the displaced owners to find a new place to relocate. ”This is the old classic example don’t buy the car unless you kick the tires,” he said. ”This kind of thing goes on more than I care to hear. Some people buy big homes and then a city builds big roads through. Due diligence is very important.”

Kevin Max can be reached at kmax@bendbulletin.com.