Mall Rebirths Not Without Its Obstacles

Victor B. Dover points to two Florida success stories – the $40-million redevelopment of Boca Raton Mall into the Mizner Park mixed-used development as well as the ongoing conversion of the Winter Park Mall – as well as Mashpee Commons in Massachusetts.

However, the Eastgate Mall in Chattanooga, TN is another story, as the previous owner re-leased vacant retail space to users for training centers and call centers, as well as questionable rehabilitation. "A lot of money has been spent in the interior skylights when they should have focused on turning it inside out," Dover says. "It'll have to be re-kick-started."

That will be done by yet another owner, Dover notes, as the property was foreclosed upon last week.

Property owners are hesitant to consider redevelopment, agreed William R. Anderson of Economics Research Associates, also a member of the San Diego plan commission. An old mall can often be a cash cow to its owners even if rented at relatively low rates, he adds, providing little incentive to change uses. Meanwhile, the public often holds out for replacement retail space, he adds, rather than support a mixed-use project that can include multifamily space and streets rather than expansive parking lots.

A Sears store in the Hillcrest area of San Diego was bought by the city in 1990, Anderson says, and the original plans called for a new library there. However, city officials decided to create a town center there, with a grocery store as well as other retail space along with residential development.

"The stand-alone Sears couldn't compete anymore," says Anderson, who isn't shy about reminding planning officials of their power of eminent domain. "The idea is control."

Although REITs would appear to have the largest inventory of potential mall redevelopment projects, the panelists urged planners not to ignore smaller centers for local opportunities. "Don't assume you'll start at the top first," Dover suggests. "Don't expect (REITs) to transform their stellar performers first."

A supportive local government is key to redeveloping the dead mall, Dover maintains. He notes that the developers' original plans for Winter Park Mall were deemed "underwhelming" by city officials, who urged creativity. The resulting Winter Park Village leased up quickly, he notes.

"We thought it would take a lot longer for the housing market to accept that site," Dover says, adding the redevelopment is a work in progress that must adapt over the next decade. "They're going to have to find ways to reinvent themselves very quickly."