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Kent County News Retailing And Restaurants

Dover Mall open for distribution future with zoning change

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The Dover Mall Macy’s was converted into a fulfillment center in late 2020. Dover city officials recently approved zoning language to open the Dover Mall into other warehouse and distribution uses. | DBT PHOTO BY KATIE TABELING

DOVER — To position itself for current shopping trends and Kent County’s overall economic development efforts, Dover officials have amended the zoning code to allow distribution and warehouse use in regional shopping centers.

The Dover City Council accepted the recommendation on July 12 with a unanimous vote. The new zoning language would only affect the Dover Mall, a 554,000-square-foot shopping complex next to the Dover International Speedway.

Dover Director of Planning and Inspections Dave Hugg said the zoning amendment may pave the way for a new life in the mall.

“It’s no secret to all of us that regional shopping centers across the country are suffering, and the Dover Shopping Mall certainly hasn’t escaped that fate,” Hugg told the council on July 12. “It is very unlikely that the mall will continue to function viably as a regional shopping center without being able to take advantage of customer behavior and new opportunities.”

Warehousing and distribution are among the top targeted industries for central Delaware, according to Kent Economic Partnership Executive Director Linda Parkowski. Assets like easy access to major highways and existing warehouse space and land make Kent County more ideal for distribution avenues for companies across the nation.

“With the rezoning of the Dover Mall, we will have more sites to market,” Parkowski told the Delaware Business Times. “We have seen similar rezoning of malls across the country and are fortunate Dave Hugg was proactive.”

Built in 1982, the Dover Mall has boasted seven anchor tenants, including Sears, Macy’s, JCPenney, Boscov’s, Dick’s Sporting Goods and Old Navy. But as the years passed, some stores like For Your Entertainment shrunk its footprint while others like Hobbytown and Jeweler’s Loupe left for larger space at lower rent.

Today, about 12% of the Dover Mall is vacant, Hugg said.

Malls were a major success story in the past three decades — especially in sales tax-free Delaware — with about 24 square feet of retail space for every American, according to the accounting consultancy PwC. But as online shopping became a convenient and affordable option, that cut into the brick-and-mortar retailers’ profits.

Vacancies for U.S. malls hit 11.4% in the first quarter of 2021, the highest percentage in a decade, according to Newmark and Moody’s Analytics REIS. 

The Dover Mall was valued at $129 million in 2011, but later dropped to a $41 million estimate in 2021, according to loan data reported by data analytics firm Trepp. Simon Property Group, a publicly-traded real estate investment trust, owns the mall.

The Dover Mall is about 12% vacant, with anchor stores like Sears out of business, according to city officials. | DBT PHOTO BY KATIE TABELING

But the best sign of the future may come from the mall’s Macy’s, where the former retail tenant has turned into a fulfillment center. Last October, Macy’s executives announced it would discontinue in-store sales at the Dover store and another in Colorado while launching a pilot program for “omni service centers,” where customers would be able to pick up orders in store or at curbside, make returns and pay bills.

While the holiday rush has long passed, Macy’s spokeswoman Carolyn Ng Cohen said the retailer plans on continuing fulfillment use in the Dover department store. The number of positions would not be impacted by this change.

“The Macy’s customer is becoming increasingly more diverse in how they choose to shop with us, using Macy’s mobile app or shopping on macys.com, shipping to their nearest store or visiting a store,” Cohen said. “As a result of this shift, we’ve seen an increase in demand across the network to get our customers their product when and how they want it.”

With 19-foot ceilings, loading docks, ample parking and large retail space, Hugg noted that altering the zoning language slightly would open the door if Simon Property Group wanted to head toward a distribution or warehouse use.

Simon Property Group did not respond to the Delaware Business Times’ request for comment.

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3 Comments

  1. Joseph James July 24, 2021

    What about the Concord Mall? It looks kinda empty too

    Reply
  2. M. Vogel July 24, 2021

    There goes the mall. It will become merchandise pick up only.

    Reply
  3. Connie September 21, 2021

    I heard they are remodeling concord mall? Are they?

    Reply

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