Saturday, Oct 20, 2018
One of America's Great Newspapers ~ Toledo, Ohio

Economy

Decision time for 2 Toledo malls

  • Decision-time-for-2-Toledo-malls-3

    The mall has just 21 tenants for its 90 store fronts, with MC Sports the closest it has to an anchor.

  • Decision-time-for-2-Toledo-malls

    MC Sports is the biggest tenant at the 756,000-square-foot North Towne, near the Michigan border.

    blade

  • Decision-time-for-2-Toledo-malls-2

    Plans are afoot to revive 30-year-old Southwyck, a South Toledo retailing fixture.

ADVERTISEMENT
Decision-time-for-2-Toledo-malls

MC Sports is the biggest tenant at the 756,000-square-foot North Towne, near the Michigan border.

blade Enlarge

They are struggling regional malls with uncertain futures, and experts say prompt action by their owners is necessary for Southwyck Shopping Center and North Towne Square.

Plans are afoot to revive 30-year-old Southwyck, a South Toledo retailing fixture.

It has a vacant anchor store, two closed theaters, and vacancies in 40 of its 103 store sites.

But Sears Roebuck & Co. has announced plans to fill the former Montgomery Ward spot if it gets tax and wage incentives from the city of Toledo, which in turn wants assurances the mall will be redeveloped by owner Sherman Dreiseszun.

North Towne's prospects seem bleak.

Decision-time-for-2-Toledo-malls-2

Plans are afoot to revive 30-year-old Southwyck, a South Toledo retailing fixture.

Enlarge

Its owner, Simon Properties, Inc., of Indianapolis, the nation's top mall owner and developer, put the 756,000-square-foot center up for sale in 1999 after Elder-Beerman closed its department store there.

Since then, the two remaining anchors, Dillard's and Montgomery Ward, have left, as have many other stores.

The mall has just 21 tenants for its 90 store fronts, with MC Sports the closest it has to an anchor.

Simon Properties will not say whether the mall, at Alexis and Telegraph roads, remains for sale or if it plans to redevelop it. The city of Toledo is not in discussions to help redevelop it.

Many older malls nationwide like North Towne and Southwyck are ``dead men walking'' in a fast-changing retail environment, said Michael Beyard, a mall consultant at the Urban Land Institute in Washington.

Decision-time-for-2-Toledo-malls-3

The mall has just 21 tenants for its 90 store fronts, with MC Sports the closest it has to an anchor.

Enlarge

``The market is changing dramatically,” he said. “We have so many other kinds of shopping, there is a reduced demand for what we once had in the enclosed malls.''

Such malls, now a 40-year-old concept, are facing stiff competition from specialty shopping, town centers, redeveloped older main street districts, outlet malls, off-price malls, and entertainment centers.

In extreme cases, malls have been torn down and have been replaced with mixed office and retail centers, Mr. Beyard said. Others have been remade as off-price or ``big box'' retail centers, he added.

But generally, he explained, few older malls are being updated to what they previously were: enclosed regional fashion malls.

``Even if you made it the glitziest mall imaginable, the market studies show the price per square foot can't justify the investment nowadays,'' Mr. Beyard said.

Don Weiher, a principal at Michael Realty Co., a Toledo commercial real-estate firm, said redevelopment of North Towne is particularly difficult.

The area around it, much of which is industrial, does not have a high density of population or traffic, he said. And a competing mall in Monroe grabs potential Michigan customers.

Those factors hurt possibilities to revive North Towne as a regional mall, Mr. Weiher said. Still, he added, it could remain as retail but become what is known as a power center, such as the Spring Meadows Shopping Center on Airport Highway at U.S. 23, which has TJ Maxx, Target, Dick's Sporting Goods, and OfficeMax.

Toledo is helping the possible redevelopment of Southwyck but not North Towne because the owner of the former asked for it, but the owner of the latter has not, said City Councilman Pete Gerken.

``Anything involving North Towne would be conceptual at this point,” he said. “With Southwyck, we're much further along because an anchor and the owner are active participants. We haven't had that type of involvement with the owner of North Towne.''

North Towne can be successful, Mr. Gerken said, but its best future use may be light commercial or industrial. Without Simon Properties proposing some changes, however, it's unlikely anything will be done, Mr. Gerken said.

Even though the mall owner won't discuss its plans publicly, a few tenants said last week they think Simon Properties has plans to redevelop the mall, possibly with mixed-used retail. But they haven't been told precisely how.

North Towne tenants MC Sports and Renl Novelty and Sales said they do not think Simon Properties will shutter North Towne, but rather, reinvest in it.

``We're waiting to hear what the redevelopment plans are. Our rent structure is still profitable, thanks to our loyal customers there,'' said Bruce Ullery, president and chief executive officer of Grand Rapids, Mich.-based MC Sports, a regional sporting goods chain.

``We will be monitoring the situation, and there's been some talk of a skate park facility and maybe another retail anchor. We will meet with Simon next month to hear what the plans are for the mall.''

Bob Lynch, owner of Renl Novelty, a sports-collectibles store, met with Simon officials last week. ``They told me they are working on stuff and they just wanted to assure me they are not closing this mall,'' said Mr. Lynch, who signed a five-year lease seven months ago.

The mall owner told him it has prospective new tenants but could not reveal who they are, he said.

Mr. Lynch added: ``Things could always get worse. I think it might drop more here this year, but this should be our last bad year here.''

Stan Eichelbaum, a mall consultant with Marketing Developments, Inc., in Cincinnati, said changing North Towne into light commercial or office space as Mr. Gerken suggested might be difficult. ``The problem is the mall wasn't built to be recycled,'' he said.

Standard malls like North Towne have been used as storage, university classrooms, and new forms of retail, but they often don't adapt well to the new situations, he said.

Larry Gresham, a retailing and marketing specialist at Texas A&M University's Center for Retailing Studies, said it has been difficult for owners of slipping malls to reverse that course.

``More and more anchors are moving more into strip center locations because of the convenience factor,” he said. “Regional malls are having a really rough time.

``Some are turning aging malls into office space, but I'm not sure that there is a sound, long-term strategy for those kind of centers.”

Mr. Weiher, of Toledo, said the shopping numbers near the 950,000-square-foot Southwyck are better than they are near North Towne.

``There's no question it could remain a strong retail property even if the new mall is built in Maumee,” he said of Southwyck, referring to the proposed General Growth Properties super-regional mall off U.S. 24 near U.S. 23/I-475.

“Will Dillard's and their partner, Sherman Dreiseszun, along with the city of Toledo help attract new retailers to Southwyck? That's the 64 thousand dollar question,'' he added.

Mr. Dreiseszun last week declined to discuss the Southwyck situation until after Sears or a comparable anchor commits to putting a new store into the mall.

“The department stores have to make the announcement first. I don't like to say anything that would get people stirred up and then have it not happen or change,'' he said.

A Dillard's department store and a Dillard's for the Home store are the only anchors in Southwyck, which could lure Sears and possibly other stores that General Growth has said would go into its project. Retail experts say it is unlikely anchor-size stores would have sites in both Southwyck and the Maumee mall.

Southwyck tenants Phil Kajca, owner of J. Foster Jewelers, and Gloria Granata, owner of Sweet Elegance candy store, said the redevelopment of the South Toledo mall is just a matter of time because Sears has said publicly it wants to be there and the city of Toledo is willing to help.

But a General Growth executive contends Sears remains committed to his suburban project.

“I feel very positive,'' said Mr. Kajca, who said he thinks Southwyck will announce its redevelopment plans this month at the International Council of Shopping Centers convention.

``The stores that you build your center around are here,” he said. “We're just missing another department store, and then the other fluff things could fill in rather quickly. It is the right core mix of stores here now.”

Ms. Granata, who moved her store from Franklin Park Mall, said Southwyck merchants are upbeat. ``At this point, the turning of the page will be if a major anchor signs,” she said.

If Sears agrees to come, J.C. Penney will follow, she said, and that in turn probably would bring in 10 smaller tenants by Christmas, reducing the high vacancy rate in the center off South Reynolds Road and Glendale Avenue.

``I have met [Mr. Drieseszun] and think he's very shrewd,” she said. “I think if he can get any city to help, him, any kind of tax abatement, he'll take it. But if they offer it to him, I also feel he would step up to the plate and redevelop [Southwyck].”

Bill Beckham, owner of the Red Baron arcade at Southwyck, said a Sears and city help would spur Mr. Dreiseszun to revive the mall. ``I do believe he has plans,” he said. “What stage they're at and how realistic they are I don't know. But if I was a gambling guy, I'd say it's going to happen.”

Click to comment

Quis autem vel eum iure reprehenderit qui in ea voluptate velit esse quam nihil molestiae consequatur, vel illum qui dolorem?

Temporibus autem quibusdam et aut officiis debitis aut rerum necessitatibus saepe eveniet.

Copyright © 2018 Toledo Blade

To Top

Fetching stories…