Can retail be rescued? Why so many U.S. stores are closing
It’s been a furious few months of changes at the Triangle’s traditional shopping malls.
Northgate Mall in Durham was nearly foreclosed on before being sold to a private-equity firm late last year.
Cary Towne Center just sold to an out-of-state developer.
The Streets at Southpoint are plotting a rezoning request that would allow them to build apartments, a hotel or office buildings there.
And University Place in Chapel Hill is headed for a big makeover as well.
But there is still another big domino to fall in the rejuvenation of this area’s shopping malls: What will Crabtree Valley Mall in Raleigh do with the empty shell that was Sears?
Sears had owned its 168,000-square-foot building there as well the 3.3 acres around it — but as the company’s struggles intensified it started to shed its properties across the company. That’s when the mall itself decided to take back control of the property for nearly $20 million last April.
“If you look back at the Sears situation .... and look at their struggles, we wanted to gain control of that property,” Brian Asbill, director of marketing for Crabtree, said in an interview. “They owned it but we thought taking that leap of faith and taking control was important because it really gives us a blank slate for what comes next for Crabtree.”
So what is next?
Asbill said the mall is probably four to six months from revealing concrete details about the future of the Sears property, but clearly it has a mixed-use future — whether that means a new hotel, residential units or office space.
The owners could just redevelop the former Sears space, or they might take the opportunity to re-imagine that entire side of the mall. It also could give the mall a chance to add more parking, which often becomes an issue during peak hours.
“I think what you can look for from Crabtree are plans that are going to be forward thinking and looking to be more of a mixed-use development — possibly residential, office or hotel,” he said, noting that green space and entertainment space could also be added. “You see that in various forms (at other regional malls) and we are looking at what aligns best for our property and re-imagining Crabtree.”
While current zoning allows the mall to build up to 12 stories on the property, the mall could ask for a rezoning, Asbill said. He also noted that the mall’s owners wouldn’t be looking for public dollars and want to fund this project personally.
In all honesty, Asbill added, what Crabtree is going through right now is very similar to what the Streets at Southpoint are thinking.
The two malls are still in positions of strength relative to some of the other malls in the area, and they both believe they need to evolve now to avoid a decline in the future.
Brookfield Properties, the owners of Southpoint, haven’t revealed their exact plans yet either — but as The News & Observer reported last week, they began the process of rezoning the property to allow the construction of 200,000 square feet of office space, 100,000 square feet of new retail space, a hotel and up to 750 apartments,
“It’s good to be ahead of the curve so that you don’t have another Cary Towne Center experience or a Northgate Mall experience,” Patrick Byker, a lawyer with the Morningstar Law Group that is representing Brookfield, said last week. “You’ve got to be ahead of the market and figure out where it’s going.”
The new owners of Cary Towne Center — Turnbridge Equities and Denali Properties — paid $31.5 million for the 76-acre mall, according to Wake County land records. But so far, the new owners have declined to comment on their plans for the mall. Similarly, the new owners of Northgate Mall in Durham — who paid $34.5 million — have also not spoken about their plans for that mall.
Asbill said that Crabtree, like Southpoint, is trying to stay a head of the curve.
“You have to give people a reason to come for other reasons than shopping. That is what makes a healthy property,” he said. “That is simply responding to a changing retail environment.”