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Published: Sunday, 3/29/2009

Maintain is byword at Toledo area malls

BY JON CHAVEZ
BLADE BUSINESS WRITER

WITH THE local economy zapped, the Toledo area s largest malls and shopping centers are trying to hang on, and improve if possible.

Everyone is feeling an economic pinch. That doesn t mean consumers have stopped shopping. said Katie Dickey, a spokesman for Westfield America Inc., owner of Toledo s premier mall and largest shopping enclave, Westfield Franklin Park.

But clearly retailers are putting holds on their expansion. Many are just working to maintain what they have.

Owners of the area s six largest retail destinations Franklin Park, the Shops at Fallen Timbers, Woodville Mall, Spring Meadows Place, Levis Commons, and Westgate Village Shopping Center say they are in maintain mode.

Their strategy: keep vacancy rates steady, sign up new retailers, and attract more shoppers.

The local retail market does not seem to be getting worse. The vacancy rate was 7.6 percent in the fourth quarter of 2008, virtually the same as in the third quarter, according to CoStar Group Inc., a commercial real estate data firm.

Nationally, December sales for nonanchor mall tenants fell 13.3 percent from a year earlier, the largest drop on record. For 2008, mall and shopping center sales fell to $390 per square foot from $411 in 2007, according to the International Council of Shopping Centers.

Challenges are evident in the Toledo area.

General Growth Properties Inc., owner of the million-square-foot Fallen Timbers center in Maumee, planned to have the $125 million project 80 to 85 percent full by this time. Instead, a third of the space is vacant, two retailers have left, and another plans to. The center opened in 2007.

Still, company spokesman Jim Graham said the firm is pleased at how well sales are holding up at the center. It s a tough year all over, to be sure, but [company] properties are doing better than you would think, given economic news from other sectors, he said.

Steve Wagenheim, chief executive of Granite City Food & Brewery, which opened at Fallen Timbers last year, said his restaurant is doing fine but other stores probably will suffer until the area around center grows.

P.F. Chang s and Granite City, we re sort of destinations. We do well, he said. But other retail depends heavily on foot traffic. They need it to survive.

Rocky Mountain Chocolate Factory is among those needing more customers.

Co-owner Stacey Gardner said sales are less than she and her husband, Trent, expected. Saturdays we are doing well, but weekdays are slow. We re not making money.

We kind of feel if we can hold through this economy and weather the storm, this could be something that will stand out and be unique.

A few miles away, the 4 -year-old Levis Commons outdoor center in Perrysburg seems to be holding its own. The 550,000-square-foot center, which has different owners for different store strips, has 20 vacancies among 81 store fronts.

It could lose a tenant soon. Strasburg Children filed Chapter 11 bankruptcy on March 11 and has indicated it expects to close some of its stores.

However, Charlene Scott, manager of the original piece of the development, Town Center at Levis Commons, said the entrance-street strip hasn t lost stores and is close to signing leases with others.

In the first quarter, sales weren t off the charts. But our stores were doing better than other stores in their chains, she said. The center s fashion retailers are suffering, but its restaurants and nightclubs are thriving, she added.

Elias Hajjar, owner of Poco Piatti restaurant in Levis Commons, said sales are slightly down from 2007 s, but overall customer traffic is good and that drives sales. I always see people down here, he said.

Some parts of Levis Commons, however, have struggled to find tenants, according to developer Larry Dillin.

To the north, in West Toledo, Franklin Park s occupancy rate is not disclosed by Westfield, but spokesman Ms. Dickey said it is higher than the company s 93 percent average at its properties nationwide. Cosmetics boutique Bare Escentuals has signed on to open this summer in the Macy s wing, she said.

Still, Franklin Park has 13 noticeable vacancies, some of its store sites have temporary occupants, and it has fewer pushcart operators than in past years. Also, some of the mall s prime retailers have been shaken mightily by the recession.

This month, Eddie Bauer said in U.S. Securities and Exchange Commission filings that it may not be able to meet its loan obligations this year, raising doubt about its viability. On Wednesday, Williams-Sonoma Inc., which owns stores of that name as well as Pottery Barn, said its fourth-quarter profit was down 90 percent, its revenue fell 27 percent, and its same-store sales slumped 22 percent.

But the mall is faring better than some counterparts in other cities, said Doug Zaper, owner of Jule, a chain that sells women s fashion accessories.

Toledo is one of our best-performing stores in all of our [eight] markets. You probably wouldn t have guessed that.

Spring Meadows Place, which opened in 1987 along Airport Highway in Springfield Township, is dependent on multiple owners for its success. Anchors Sam s Club, Target, Dick s Sporting Goods, Kroger, Best Buy, Big Lots, and Guitar Center all own their sites. The 597,000-square-foot center was redeveloped in 2006. Six of its 43 store sites are vacant.

Mike McBride, an executive with developer Ramco Gershenson Inc., which owns about a third of the space, said, We re cautiously happy with how things are going. We like our tenant mix. We have some vacancies, but we re still doing well and we re certainly cognizant of what s going on in the economy and what s happening to other centers.

Terry Richardson, owner of Hobbytown USA at the center, said sales seem fine.

There are times it s really packed out there in the lot, and my sales are up over the last year, he said.

I don t know maybe it s because I m the only general hobby store left in town but, although my December business was down, I m up over last year.

Across town at Woodville Mall in Northwood, little has changed from a few years ago.

The mall, which has been for sale for two years, has as its anchors Sears, Elder-Beerman, The Andersons, and the Fox Theaters, plus 12 other retailers.

The vacancy rate in the 794,000-square-foot center is 84 percent.

A sale of the mall, revealed in November, apparently has stalled in part because of the tightening credit nationally.

Owner Sammy Kahen did not return calls seeking comment on the mall s status.

Although Woodville s planned redevelopment two years ago never occurred, a similar project three years ago at Westgate in West Toledo appears to have worked.

Mark Greenblatt, co-owner of the Barry Bagels deli in the center, said the addition of a Costco Wholesale Corp. store has been the key.

For the most part, Westgate is still our best store in town. Costco drives a lot of traffic. It definitely helps, Mr. Greenblatt said. He conceded, though, that daily customer count has dropped in the last few months but said it still is healthy.

Two sites in the center remain vacant.

There s no question about it retailers nationwide have all pulled back and they re not willing to open as many stores as they were, Westgate owner Liz Holland said. Even if you find an interested retailer and the stars all align, it takes a really long time to get deals done.

Contact Jon Chavez at:jchavez@theblade.comor 419-724-6128.



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