Unfulfilled growth for Maumee retail site

The Shops at Fallen Timbers opened with fanfare and many plans in 2007. But that was just before the Great Recession hit and a revolution driven by the profileration and popularity of online shopping. Nearly 520 acres of undeveloped land surrounds the 108-acre mall.

The Blade/Jetta Fraser
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Amid fanfare and excitement, the Shops at Fallen Timbers "lifestyle center" in Maumee opened 10 years ago with a core of 40 retailers and a promise that more would come.

But unforeseen events, including a recession, a rearranging of the nation’s retail landscape, and changing consumer shopping habits, have kept that promise from being realized.

Now as the 1 million-square-foot lifestyle center heads into the future, question abound as to how the mall will look after 20 years and more importantly, if something other than green fields will surround it.

“What the city has long wanted out there is a balanced development that would include retail and office. That’s still in the cards as far as the city is concerned,” said John Jezak, administrator for the city of Maumee.

The Shops at Fallen Timbers opened with fanfare and many plans in 2007. But that was just before the Great Recession hit and a revolution driven by the profileration and popularity of online shopping. Nearly 520 acres of undeveloped land surrounds the 108-acre mall.

In fact, nearly 520 acres of undeveloped land surrounds the 108-acre mall, which is owned owned by Chicago-based GGP Inc. (formerly General Growth Properties).

However, by now the site, located just west of the U.S. 23/I-475 interchange and near the Fallen Timbers battlefield for which the mall was named, already was supposed to be occupied by hotels, big box retailers, restaurants, other stores, and service providers.

"The plans I saw at the time [of opening] showed it was probably 80 percent occupied, but there were more restaurants to come. The original plans had an Olive Garden by the theater, it had two hotels on it instead of the one we got, and it had more restaurants," recalls Phil Kajca, whose J. Foster Jewelers store was among the initial tenants on a rainy day in October, 2007 when the mall opened.

"Obviously, the recession held their expansion plans back," the jewelry store owner added.

Zac Isaac, whose family owns 330 acres surrounding Fallen Timbers, said there were more problems than just the recession.

Mr. Isaac’s family sold to General Growth the land it needed for the mall, and then the family planned to turn the surrounding land in a retail “power center” that included big box retailers, hotels, and restaurants.

“The recession did one thing to retail, but then online shopping started to change retail drastically,” he said.

“We had to reconceive the 330 acres surrounding Fallen Timbers,” Mr. Isaac said. “We’ve determined it would have to be retail, mixed office use, and residential. We think it needs some multi-family housing, which is consistent with what‘s happened at other lifestyle centers.”

Currently, Mr. Isaac and the city of Maumee have pitched the vacant land to Amazon.com as a potential site for its second U.S. headquarters. The site, however, does not meet many of qualifications Amazon said it preferred, including locating in a bigger city.

Mr. Isaac said he and others realized the land surrounding Fallen Timbers is “an incredible piece of property” with better uses than retail. He added: “I think that the opportunity going forward is for non-retail development. Perhaps multi-family, medical, some general office or warehouse as well.”

Fallen Timbers opened in 2007 with Dillard’s, J.C. Penney, and a 14-screen theater. Beer Barrel Pizza and Grill and Maxx Fitness Center opens next month.

There's little doubt that Fallen Timbers was a victim of bad timing. Opening just two months before the 18-month Great Recession, the lifestyle center with its clock tower, artificial lake, and retail streetscape fought mightily its first year to retain stores and fill unoccupied spaces.

It managed to keep all but one original retailer its first year, but the road ahead would be rocky.

Fallen Timbers opened with three anchors, Dillard’s, J.C. Penney, and a 14-screen theater, and expected to have 62 stores and be nearly 85 percent full after its first year. But by October, 2008, it had just 49 stores and a third of the space at the 108-acre mall was empty.

In April, 2009, debt-laden General Growth filed for Chapter 11 bankruptcy. It emerged from bankruptcy in November, 2010, but with a leaner profile — it sold off several high profile malls.

General Growth, which declined to comment for this story and has changed its name to GGP, continued to bring in new tenants to replace those which left. By early 2014, it had 90 tenants.

But by September, 2014, the mall company quietly decided that the $125 million Fallen Timbers mall no longer fit in its portfolio and listed it for sale for about $30 million, according to industry newsletter Commercial Real Estate Direct.

Commercial Real Estate Direct, an industry newletter, reported at the time the listing was sent out quietly to a select list of potential buyers. Real estate industry sources said a tentative deal was struck to sell the mall to Chicago real estate investment and management firm M&J Wilkow Ltd., but the purchase never was finalized.

Commercial real estate investment trust Devonshire REIT II, located in Whitehouse, was among those that considered buying Fallen Timbers.

Doug Dymarkowski, Devonshire’s senior vice president and general counsel, said the mall did not fit the investment trust’s desire for “Internet-proof” retail centers.

“We look for what we view as centers that are somewhat Internet proof, that have hair salons, restaurants, grocery stores, and other things you can’t readily buy online,” Mr. Dymarkowski said.

“With Fallen Timbers, we saw a lot of space that had to be taken care off, and Dillard’s and Penney’s were not part of the purchase. We did not have lot of faith that those retailers could survive the onslaught of internet-based shopping,” he explained.

The center has another problem, one that can’t be easily overcome: it cannot be seen from the road.

Jon Roumaya, of hotel developer Key Properties, agreed that Fallen Timbers “is hard to see from the major highways.”

Key, which has built several area hotels in the last seven years, including one at nearby Levis Commons, was offered the opportunity to build at Fallen Timbers. It passed on the offer, Mr. Roumaya said.

One upside for Fallen Timbers that hasn’t seemed to help nurture the mall is the large amount of single-family housing, much of it upscale, that has been built within a few miles of the mall over the past 10 years. According to Toledo area commercial real estate company the Reichle Klein Group, within three miles there are 22,035 people with a median household income of $97,552 and a median housing value of $222,140.

Even with disadvantages such as visibility and retailers that could be susceptible to online shopping, Mr. Dymarkowski sees a future for Fallen Timbers.

The lifestyle center has amenities such as a theater and ice skating in the winter. It has restaurants, outdoor events, and, importantly, it is viewed as very safe and family-friendly.

“I think they might have a rough go of it in the future, but I think they will survive. They may have to reinvent themselves though,” he said.

Mr. Kajca, the jeweler, thinks that reinvention may be already occurring.

A 10,000-square foot restaurant, Beer Barrel Pizza & Grill, opens next month as does a gym, Maxx Fitness.

“The gym is a big change. That’s never been in the retail mix there before. And we’ve always been missing more of the bigger restaurants and now we’ll have another one. We will catch up to Levis Commons in terms of restaurant square footage,” said Mr. Kajca, who also has a jewelry store at Franklin Park Mall in Toledo.

“We’ve alway done good business (at Fallen Timbers). Our best customers come from Liberty Center, Napoleon, the Defiance area. But now that U.S. 24 is better than it use to be, we are seeing customers from Fort Wayne (Ind.),” Mr. Kajca said. “That’s a surprise.”

Mr. Jezak said that, if the city of Maumee had relented and let General Growth build an enclosed mall, like it first proposed, Fallen Timbers might be among the hundreds of malls nationwide in trouble or mothballed.

“Had it not been built as a lifestyle center, it would have been one of the last of its kind and it really would have been a white elephant,” Mr. Jezak said.

Like Mr. Isaac, the Maumee administrator also sees multi-family housing as the key to Fallen Timbers’ future.

“It seems in northwest Ohio the way development is occurring in a lot of these places is they have become more of a planned community, rather than retail from corner to corner,” Mr. Jezak said. “If you create a town center that has every type of use in there, that makes each of them more viable. You can walk to work or walk to the retail center.”

But Fallen Timbers’ fate may not be in GGP’s hands.

Last Monday, Brookfield Property Partners LP, one of the world's largest commercial real estate firms, made an unsolicited $14.8 billion bid to buy the remaining 66 percent stake in GGP. Brookfield already owns 34 percent.

If its bid is successful, there is no telling what might happen to Fallen Timbers, which for now no longer is listed for sale. A GGP official refused to discuss the mall’s status.

“I don’t think anybody walks away from an investment like (Fallen Timbers) that’s in good condition. You don’t see something like that boarded up,” Mr. Jezak said.

Contact Blade Business Writer Jon Chavez at jchavez@theblade.com or 419-724-6128.