Memphis aims to invigorate malls

By SARA CLARKE, The Commercial Appeal

Published 1:11 pm, Saturday, December 13, 2014

MEMPHIS, Tenn. (AP) — It’s the holiday shopping season in Memphis, but at the Raleigh Springs Mall, a movie theater sits abandoned. Doors to an anchor store are boarded up.

Empty storefronts also pock Hickory Ridge Towne Center and Southbrook Mall while the shuttered Peabody Place and the razed Mall of Memphis await redevelopment.

Once a symbol of prosperity in Memphis and America, many enclosed shopping malls now struggle for relevance as the nation embraces lifestyle centers, outlet malls, dollar stores and online commerce.

Memphis’ worn out malls raise a challenge because they are within the city limits while the affluent suburbs covet retail merchants to help fund their new school districts through tax revenue. In response, Memphis officials are trying to head off further erosion in the city tax base by reviving the dying malls.

“We’ve got to protect our flanks, we’ve got to protect our borders and keep people from moving out and creating blight,” said Robert Lipscomb, the city of Memphis’ housing and community development director.

“If that mall stays empty,” he said of Raleigh Springs, “it’s going to lead to more blight and more people moving out, and a decline in surrounding property values, which is our largest source of what? Revenue.”

Protecting those flanks has touched off creative strategies around the country. “Today’s shoppers demand a more urban experience — specifically, pedestrian-friendly streetfront retail,” says a 2006 study by Urban Land Institute, a Washington think tank. “They want to experience ‘place’ when they spend their money.”

To provide that sense of place, Atlanta converted the troubled Oriental Mall into Plaza Fiesta, a gathering place for Hispanic and Asian neighborhoods. In South Florida, Sears is considering making a mall store into an open-air center with restaurants, offices and a hotel.

Those lessons aren’t lost on Memphis retail experts. “The ones that will survive are the ones that adapt to change,” said Shawn Massey, a property broker withThe Shopping Center Group.

Massey notes successful malls adjusted to demographic shifts, like Southland Mall in Whitehaven, a 90,000-population area of Memphis. Mall merchants learned to cater to middle-class black families as white families moved away. Germantown Village and Park Place Centre also succeeded by converting enclosed malls to lifestyle centers.

Despite those successes, Memphis’ retail vacancy rate measures 9.2 percent, compared to 6.3-percent nationwide. In the category that includes indoor malls, Memphis’ vacancy rate was 18.3 percent, and some area malls are as much as two-thirds empty, according to an analysis by Cushman & Wakefield/Commercial Advisors.

“It’s just been a slow progression away from enclosed malls in our area,” said Carson Claybrook, the firm’s vice president of retail brokerage services.

Rather than let the old malls crumble, city officials are plotting revival. Here’s a look at some of the strategies:

City Hall plans to demolish Raleigh Springs Mall and build a $27.3 million traffic and police precinct office, a library and park space. Money for the project would come in part from the sale of the former Union Avenue police precinct and a former Raleigh supermarket site the city owns.

Recently, the city offered to buy the mall from Raleigh Mall LLC for its appraised value, Lipscomb said, but might seek the property by eminent domain if the offer is refused.

World Overcomers Outreach, a Hickory Hill church, bought Hickory Ridge Mall after the 2008 tornado tore through. Aiming to restore the community icon, church leaders envisioned stores, government and medical offices and eventually a conference center, youth facility and home for retirees.

But the church owners didn’t get the level of support they expected from the city or the neighborhood, said Jimmie Haley, the mall’s economic development director.

“The community by and large doesn’t seem to understand what the vision is. They thought we were going to come in here and create another Wolfchase (mall). … We never said that,” Hailey said, noting, “We’re not where we had hoped to be, but we are endeavoring to move forward.

The huge Mall of Memphis was closed in December 2003 and soon razed after a string of crimes and a high-profile shooting death triggered the nickname “Mall of Murder.”

Johnson Development Associates bought the 113-acre parcel in 2012 and markets it as Aerotropolis Logistics Park. The vacant land on American Way between Perkins and Getwell, is surrounded by chain-link fences.

Peabody Place, a 300,000-square-foot Downtown retail and entertainment center, was opened in 2001 by Belz Enterprises, a prominent Memphis real estate firm that earlier brought back to life The Peabody, an adjoining Downtown hotel.

Despite hefty tax breaks, Peabody Place’s centerpiece, a 22-screen cinema, was shut down in 2008. Patrons complained the theater drew too many rowdy young people. When shoppers stayed away, the stores soon closed.

Now the big building is nearly empty. A committee organized by City Hall is considering revamping the site for meeting rooms to complement the Memphis Cook Convention Center and The Peabody.

Southbrook Mall, located at busy Elvis Presley Boulevard and Shelby Drive, is mostly vacant while across Shelby the bustling Southland Mall is almost 95 percent leased.

Last month, city officials announced a $2.1 million taxpayer-backed grant to renovate the old Whitehaven mall to fit the owners’ plans. They envision government offices, merchants and performance space for actors.

Some, including Massey, question the city’s involvement. When he recently brought in a national retailer, Massey said, mall managers dismissed the merchant even before rental rates came up for discussion.

“They had other plans,” Massey said of Soutbrook’s owners. “I hate to see the city sink more money into a project that doesn’t need city money.”

Southbrook’s chairman, Memphis bail bondsman Willie Harper, said “quite a few” potential tenants have inquired about leasing spaces at Southbrook, but he notes the building must be repaired first.

What he favors for the mall is a live venue like Hattiloo, an independent black theater in Midtown. Such an attraction, he said, can invigorate Whitehaven culturally.

“It’s not about making the money,” Harper said. “It’s about making a difference.”

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Information from: The Commercial Appeal, http://www.commercialappeal.com

 

Original article appeared here.