Delaware shopping malls could be transformed

Steven Chambliss, general manager of Christiana Mall, will welcome a new candy store and an Asian restaurant to the mall in 2018. Christiana is the only 100 percent occupied mall in Delaware.

From Long Island’s storied Roosevelt Field Mall to Los Angeles’ swank Westfield Century City, extreme mall makeovers are turning boxy hardtop shopping centers into open-air entertainment districts. Delaware could be next – but that depends on the closely held plans of a private company and on DelDOT’s to-do list.

Nationally, 9 out of 10 mall developers are changing things up. Roofless malls are trending, along with upscale food courts, fast-casual restaurants, yoga studios, virtual-reality spaces and family destinations like Kidzania, an experiential learning center where children can try their hands at 100 occupations.

With major retailers like Gymboree and The Limited filing for Chapter 11, American malls are stretching their wings, literally. They’re adding bowling alleys, “chef-driven” restaurants, wine stores, IMAX theaters, grocery stores, even apartments and pediatricians’ offices.

Here in Delaware, a $100 million-plus addition is proposed at Dover Mall; GGP’s Christiana Mall has reinvented itself three times, and execs at privately owned Concord Mall have hinted that a renovation is in the offing.

Christiana, with its enviable 100 percent occupancy rate, is always evolving. Lolli And Pops, a candy store, and Yong Kang Street, a new Asian restaurant, are coming next year. As general manager Steven Chambliss put it, “It’s all very fluid. That’s retail. We have some very productive stores here. There’s always some new, great trend in retailing and some tenants past their prime. That’s the retailing world. It’s something we deal with every day, mostly as leases come up or if there are stores that are underperforming.”

Delaware’s largest mall hits a sweet spot for shoppers because it follows the newest mall model – retail plus entertainment tenants. At Christiana, shoppers can hit the stores, then stay for dinner and a movie.

The mall, with its tax-free status and its convenient perch on I-95, draws shoppers from four states. To keep foot traffic high, Chambliss said the mall owners are always looking at new uses of space. Asked about Kidzania, the experiential learning center for children, he said, “We don’t have any signed up, but we’re looking at things like that.”

At Dover Mall, a Washington, D.C. developer wants to invest more than $100 million to build a power center at the back of the mall with 647,0000 square feet of high-end retail space, including a popular unnamed national grocer.

The 35-year-old mall is currently only 91.5 percent occupied, and its Macy’s store has been put on Morningstar Credit Ratings list of likely closures.

The expansion, which reportedly would also include upgrades to the mall, now hinges on DelDOT agreeing to a public-private partnership that would build a connector road to the property.

The road is on DelDOT’s to-do list, but it’s not slated for construction until 2024. Western wants to fast-track the project so construction can start by the end of 2019.

“We believe we need to have the road constructed sooner in order to reinvigorate the Dover Mall. There are users in the marketplace who have told us if we can build it sooner, then they will come to Dover,” said John W. Paradee, the Dover attorney who represents Western Development Corp. The company’s many projects include Franklin Mills, the Philadelphia discount mall that draws 19 million visitors a year, and Georgetown Park, an upscale retail and residential complex in D.C’s posh Georgetown neighborhood.

“We’re talking hundreds of millions of dollars put into a reinvigorated new mall,” Paradee said. “Malls like Christiana or King of Prussia or Tyson’s Corner are good examples of malls that have adapted and continue to thrive, but, if we can’t expedite it, it may be too late.

Christmas shoppers head for stores at Dover Mall, which 91.5 percent occupied.

“If this doesn’t happen, I think it’s a certainty that Sears will be gone. As you know, Sears has been in trouble nationally, and they’re closing stores at a pretty pace. So we don’t expect Sears to be here much longer,” he said. “I don’t want to cast a negative pall over the mall, but it’s no secret that Macy’s has been closing stores. If Sears and Macy’s both go, then the other anchors out there will probably be scratching their heads, wondering how long they want to stay. We see this road as, literally, a lifeline for the mall.”

Simon Property Group, the owner of the mall, declined to comment. Simon, the largest mall operator in the U.S., has joined Western in backing the connector road.

Mall walker Judy Taylor of North Wilmington pointed out cracked tiles and uneven flooring at 49-year-old Concord Mall, which sits near the border of Brandywine Hundred, where the median home price is $389,630 and Glen Mills, Pennsylvania, where it’s $549,900.

Kevaughn Brown, regional manager of the calendar pop-up store at the center of the mall, said traffic is down at Concord. He said Concord shoppers are generally older than their Christiana counterparts, and many don’t venture out in cold weather.

Allied is privately owned so no occupancy figures are available for the mall, but, according to the mall website, 50,899 of the center’s 892,574 square feet is available for lease.

Jim Oeste, vice president of real estate for mall owner Allied Retail Properties, did not return repeated phone calls, but he told Delaware Public Media six months ago that Allied was reimaging the mall’s format, tenant mix and overall look.

Allied has business relationships with popular major retailers like DSW, REI and TJ Maxx, because they also own Christiana Town Center, Christiana Fashion Center and Concord Gallery in Delaware, and retail centers in neighboring states.

Concord Mall’s current mix includes more than a dozen clothing stores, a category Pennsylvania does not tax, so that state’s residents have less impetus to cross the state line.

A recent JLL Retail report on the health of malls said restaurants are moving into vacated department store space in many locations, and some restaurants are so popular that they are becoming destinations or anchors in their own right.

Supermarkets are another popular replacement for failed department stores. A Whole Foods opened on the first floor of a former Sears in Clearwater, Florida. Theaters are moving into spots formerly leased by stores such as Nordstrom and Saks Fifth Avenue, and entertainment options are expanding.

And, a JLL survey showed 18.9 percent of malls are removing the “M” word from their names. They’re opting for words that evoke a sense of community – “shoppes,” “towne center” and “village.”

No mall hopes to wind up on Deadmalls.com, as three Delaware malls have. The circa-1971 Blue Hen Mall was one, despite its Blue Hen Cinema with a giant screen, stadium seating, a cry room and deluxe skybox seating with a bar. The Shipyard Shops Outlet in Wilmington, an outdoor mall, and Tri-State Mall in Claymont are the others.

Retail construction has slowed by more than 14 percent from the third quarter of 2016, according to JLL Retail. Analysts say investors are on the sidelines, waiting to gauge the need for retail space.

Mall landlords across the U.S. are minimizing their exposure to low-growth retail and diversifying their tenant mix.

Still, if the proposed connector road to Dover Mall is built earlier than scheduled and if Allied Properties opts to reinvent Concord Mall, Delawareans could see popular retailers, fast-casual restaurants and new entertainment options at their local malls.