News of the state's first on-paper proposal to buy the Capital Hill Mall and turn the 13.5-acre site into a new home for the Montana Historical Society brought a mix of reactions from mall shoppers and business owners Wednesday evening.

It also raised questions about the future homes of the mall's two department stores and assorted retail shops. The shopping center's current owner said he's working to develop a new mall in the Queen City, while a Custer Avenue-area developer said he will continue courting the mall's two largest tenants.

A JC Penney's spokesman said he wasn't aware of the $6.5 million deal negotiated between the mall's owner and Gov. Brian Schweitzer and couldn't comment. Corporate officials for Dillard's couldn't be reached for comment.

Owners and managers and smaller business operations had a wait-and-see attitude about their potential moves into new locations, and some voiced relief at the possibility of resolving the three-year-long process to turn the shopping center site into the museum's new home.

Richard Mendenhall, president of mall owner Westfield Properties, said he hopes to build a new mall in Helena to house tenants. In the meantime -- assuming the not-yet-final deal goes through -- he'll work with his customers to renegotiate any leases that may extend beyond Capital Hill's potential closure. The agreement with the state ensures the mall may operate through the end of 2011.

"(Those stores) need to have a place to continue to do business," Mendenhall said. "At this point, there's a lot of stuff that needs to be worked out. One option is to create a new property."

PEG Development's Cameron Gunter, who's worked to develop the Skyway Regional Shopping Center off Washington Street, said the company has 19 undeveloped acres near Home Depot and has made offers on other properties in the area, including lots owned by the Helena Airport Authority.

He's talked to JC Penney's and Dillard's representatives about the possibility of those stores moving to his company's property.

"We'll continue talking to them and see if we can keep them in Helena if the mall does close," Gunter said.

Leslie's Hallmark owner Dave Simkins said he'd like to keep a presence on Helena's east side but can expand his store at the north end of town if necessary.

"We've enjoyed having our business on this end of town, and would love to be here," he said. He and his wife Colleen have owned the store for 30 years. They haven't done much to upgrade the business in recent years -- the carpet needs replacing, for example -- because of the uncertainty surrounding the museum's future.

"I'm excited about the prospect of this coming to a conclusion," Simkins said. "At least we'll have some resolution."

Bob's Pizza manager Mike Campell said the by-the-slice shop, which has been in the mall since 1985, probably will be one of the last businesses to leave. Loyal customers have kept the operation profitable while stores have closed one-by-one in recent years, he said. If the pizza shop has the opportunity to move into a new mall, the owners will take it, Campbell said. But he doesn't think they'll go for a stand-alone restaurant elsewhere in town.

GNC manager JJ Thomas was excited about the prospect of a new mall in town.

"I say light it up. I say take it away," he said. "Let's build a new mall with some anchor stores and make Helena a place to shop -- and not just a place to drive through on your way to shop," he said. "A new mall would be awesome."

Most shoppers interviewed Wednesday were positive about the prospects of a large new museum, which will be able to display much more of the state's treasures, and some were downright excited at the prospect of a new mall.

"Will there be a better mall?" Jaime Hamlin asked. "Then I'm all for it."

"It seems like it's so dead in here anymore," her husband Bret agreed.

Sharon Severy wasn't sure the shopping center is the best place for a new museum -- she and her husband Mike noted several empty buildings across town that could serve that purpose -- but she was happy to hear the Historical Society is one step closer to a new home.

She purchased some Gary Cooper photographs and memorabilia from a collector a few years ago, but the museum couldn't accept any of the materials celebrating the Helena native and movie star.

"They're bulging at the seams," Sharon Severy said. "If they had a bigger place, maybe things like that wouldn't go by the wayside."

Molly and Katie Clark said they would miss the mall. The mother-daughter duo has walked there seven days a week for the past 13 years.

But the women were happy about the prospects of a new museum and the chance they'll have a new mall for their morning and afternoon rounds.

And, of course, they were happy to hear they could soon have a new place to shop. This weekend they'll drive all of the way to Spokane, Wash., to visit the stores they like.

Reporter Larry Kline: 447-4075 or larry.kline@helenair.com