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This past year was not a good one for malls; Joplin was no exception.
Last year, one Northpark Mall anchor closed, a second anchor declared bankruptcy and a third anchor foreshadowed what it announced last month — it, too, would close.
Many malls also experienced significant revenue drops after being closed because of the pandemic, and last fall, the owner of Joplin’s mall, CBL Properties, filed for bankruptcy.
But, experts say, don’t count out malls. They are reinventing themselves. Think fewer retail stores but more entertainment. Think hotels, live music and maybe even residential space.
CBL recently redeveloped the site of a former Sears store at a mall in Chattanooga, Tennessee — CBL’s hometown — into an entertainment and restaurant destination that includes a boutique-style hotel.
“CBL’s long-term vision for the company and our properties is to transform our traditional enclosed malls into suburban town centers,” Stacey Keating, a spokesperson for CBL, said in an email to the Globe. “As part of this, we’re focused on shrinking and strengthening the retail presence at our properties and adding new uses that add energy and value to our properties. New uses in other markets have included office space, hotels, casinos, entertainment venues, destination restaurants and experiential retail.”
She did not offer specific plans for Northpark Mall.
“It’s the stuff you can’t buy online,” said Brandon Bond, general manager of Vintage Stock, which took over as north anchor of Joplin’s mall 11 years ago in what was originally the Montgomery Ward store.
He said it’s a “scary time” for malls but said his company has done well since reopening this summer. Vintage Stock is not just a store but also offers a visitor experience, an eight-station area called the Octagon that allows visitors to sample different games. (The Octagon remains shut down because of COVID-19.)
“There is no doubt malls are going to change in the future to entertainment-oriented landscapes,” Bond said. “With Amazon, you keep evolving or you are going to be obsolete.”
Sears and Macy’s
Joplin had had a Sears store for more than 90 years — until 2020. Originally downtown before it drove the creation of Joplin’s first big shopping center, near Seventh Street and Illinois Avenue, Sears moved again, to Northpark Mall in 1996. In December 2019, the retailer announced plans to close its Joplin store in February 2020.
That same month, Macy’s announced more “deep cuts” — store closings that it said were painful but necessary. The Joplin closure was announced later — on Jan. 6 of this year, to take effect in a few weeks. Macy’s, too, had a longtime on-again, off-again presence in Joplin. It moved to the downtown area in 1954, taking over the former Christman’s building and stayed until 1976. Macy’s returned to Joplin in 2006, ultimately opening two stores in Northpark Mall.
J.C. Penney — another anchor for Northpark Mall — filed for bankruptcy last spring and announced it would close 30% of its 850 stores over a two-year period, but the Northpark Mall location survived, reopening in May. When asked at the time if the reopening was a signal that its Northpark Mall store would survive, Dionne Martin, spokesperson for the retailer, told the Globe, “I wouldn’t assume anything. It’s all a strategic process, and there’s a lot that will go into the decision.”
Penney’s, which has been in Joplin since the end of World War I, is one of the few original tenants of the mall still there today.
In all, more than 30 of CBL’s tenants nationwide either closed or declared bankruptcy in 2020, including Ascena Group, which operates brands such as Ann Taylor, Lane Bryant and Cacique, as well as Christopher and Banks, which has a store in Northpark Mall.
In November, CBL itself, which operates 107 properties mostly in the Southeast and Midwest, also declared bankruptcy.
As part of the bankruptcy filing, Mark Renzi, a managing director of Berkeley Research Group, which was retained by CBL as an adviser, filed a document that outlines the company’s history and financial challenges.
He noted that even before the pandemic, “CBL was suffering from the ongoing challenges in the retail environment that have resulted in store closings, tenant bankruptcies and rental reductions for tenants with high occupancy costs.”
Renzi also wrote: “CBL, as a national retail landlord, is susceptible to changes in the retail and real estate markets. Over the past several years, the brick-and-mortar retail industry has been shifting, with the closing of brick-and-mortar retail stores becoming more common as shoppers have increasingly moved toward e-commerce. The company anticipates that the number of traditional department stores, like those acting as anchors and junior anchors in the malls, will decline over time. Beyond the decline in number, the market share of traditional department stores is declining, as is their ability to drive traffic.”
Aside from the pandemic, malls are not struggling as much as many people think, said Stephanie Cegielski, with the International Council of Shopping Centers.
“The reality is that 90% of all retail sales still take place in a physical store. In fact, many malls are adapting to offer convenient pickup locations for purchases made online and picked up in person,” she told the Globe.
She also said malls will continue to adapt.
“The important thing for any retail real estate property is that tenants be curated to meet the needs of the community,” she said. “The property must adapt to shifting demographics and economic circumstances so that they remain relevant.
“Millennials and Gen Z are definitely looking for more experience than retail. This is why there has been a shift to bring more restaurants into malls rather than just the food court that we grew up with. Gen Z is the first digitally native generation, but they crave social interaction and therefore like to go to the mall with their friends. While they balance online and in-person shopping, the physical space is still important to them.”
Many of these changes were underway before COVID-19, said Mervin Jebaraj, director of the Center for Business and Economic Research at the Sam M. Walton College of Business at the University of Arkansas in Fayetteville.
“The pandemic has just sort of supercharged it,” he said.
Today, malls are converting to office space, living space and experience-based businesses, Jebaraj said. That’s not too far from original concepts for the Joplin mall, which included a motel and apartment building nearby, as well as a cinema.
“Where I have seen malls be successful is with a conversion to housing, leisure and office,” Jebaraj said. “Consumer preferences have changed over time, and we have people returning to the downtown. If malls are going to have a chance, they are going to have to replicate that with an indoor setting.”
Casinos and more
Keating, of CBL, said that since 2015 the company has completed more than 45 redevelopments, totaling more than 2.7 million square feet, including a casino at a mall in Pennsylvania and a live music venue at a mall in Texas. She said a Dick’s Sporting Goods and Dave & Busters are part of the redevelopment in Chattanooga, along with Aloft Hotel, now under construction and expected to open this spring.
“These additions have worked to draw additional traffic to our properties,” Keating said. “Though traffic hasn’t rebounded to pre-pandemic levels, we are seeing it steadily increase across our portfolio and our retailers are reporting that conversion rates are higher. We expect this trend to continue throughout the year and for there to be pent-up demand for the dining and entertainment uses we’ve added as the year progresses.”
She said malls will remain “the heart of many local economies, generating significant property and sales tax to fund local programs, acting as a large employment base, and a center of commerce and social interaction. It’s critical for us to tailor the tenant mix to the market and position the properties, and therefore the communities, for future growth.”
Sales tax revenue from Northpark Mall properties, including restaurants along Range Line Road:
FY 2020: $1,356,443
FY 2019: $1,521,078
FY 2018: $1,695,579
FY 2017: $1,489,766
FY 2016: $1,798,472
FY 2015: $1,870,712
FY 2014: $1,679,655
Source: City of Joplin (Joplin’s fiscal year runs from Nov. 1 to Oct. 31)
Category: Restaurant News