Older Mall Falls Prey to New Concepts

SOUTHFIELD, MI-The 40-year-old Tel-Twelve Mall here has worn out its use as an enclosed shopping center, and its owner believes the property will do better as a strip center. Ramco-Gershenson Properties Trust, also based in this Detroit suburb, is tearing down portions of the mall to make it an outdoor destination area at the bustling corner of 12 Mile and Telegraph roads, flanked by I-696.

The area has had heavy competition by the increased openings of big-box electronics, clothing and media stories surrounding the mall and in nearby Novi.

Company officials says the older mall does not fit with today’s enclosed mall concepts, and new anchors must be built to take over from the current space formerly occupied by Crowley’s and Montgomery Ward, which was cleared out after bankruptcy earlier this year. Many stores in the mall have suffered, and moved out.

“The retail market place is evolving,” says Richard Gershenson, executive vice president. “Tel-Twelve is an example of how a concept will work during one time, and not in another.”

Many of the older malls in the Metropolitan Detroit area have suffered losses and have undergone renovations to attract new customers, including Westland Mall in Westland, Wonderland Mall in Livonia and Fairlane Town Center in Dearborn.

The redevelopment consists of the demolition of a major portion of the building to allow for the construction of a 140,000-sf Lowe’s Home Improvement store.

Also included in the project is the expansion of the existing 129,000-sf Kmart to a 156,000-sf super store format and the relocation and expansion of DSW Shoe Warehouse.

In addition, the project includes the development of 47,000-sf of outlots, which will be tenanted by destination-oriented users and nationally recognized restaurants.

“Tel-Twelve doesn’t fit the current regional mall prototype. It was really a unique enclosed mall, but now the area fits better with more big-box developments. The enclosed area no longer made any sense,” Gershenson tells GlobeSt.com.

Company officials expect the costs for the redevelopment to drop profits about $0.20 per share in early next year.

The new DSW should be finished by spring, the Super Kmart by fall, and the Lowe’s by spring of 2003, Gershenson says.