For decades, Chesterfield Mall was the go-to place for people across West County to meet, dine, shop and play. Before Chesterfield became a municipality, many people thought it was already incorporated because of the large, indoor shopping mall that bears the city’s name. In fact, the city’s incorporation ceremonies took place in Chesterfield Mall in 1988, a full 12 years after the opening of the mall.
But six months ago, U.S. Bank sued mall owner CBL & Associates Properties for allegedly defaulting on a $140 million loan associated with Chesterfield Mall. CBL also owns West County Center and South County Center.
The bank requested that St. Louis County Circuit Court put the property in receivership with Washington, D.C.-based Madison Marquette. CBL had earlier downgraded Chesterfield’s mall to “noncore” status in its portfolio and pointed to the pair of outlet malls that opened in 2013 a few miles away for the older mall’s declining performance. At that time, Chesterfield had more than 20 vacant storefronts. Its most recent expansion had been in 2006.
A month later, the court approved the bank’s request for a receiver to manage the mall, allowing Madison Marquette to take over immediately.
A water main break in September swamped the Dillard’s anchor store, closing it for Black Friday and the Christmas holidays. Dillard’s plans to reopen this month.
In early November, Pottery Barn announced its departure before expiration of its lease on Jan. 31. Last month, The Limited clothing store announced all of its U.S. brick-and-mortar locations would shutter as it transferred to an online-only platform.
Also in January, the mall backed out of an agreement to open a 6,600-square-foot pet adoption center after customers threatened protests and boycotts if the adoption center opened.
A bright spot is Cheeburger Cheeburger, which recently celebrated its 10th anniversary and announced that it had renewed its lease with the mall.
“We want to set the record straight, we are here at Chesterfield Mall and we are staying,” said Howard Soll. He and his wife, Marti, are co-owners and longtime St. Louis residents.
Still, many area residents are wondering: What is Chesterfield Mall’s future? According to Libbey Tucker, Madison Marquette will manage the mall until the property transfers title and can then be sold.
Tucker is Chesterfield’s assistant city administrator/community services and economic development director.
“We are told that [process] could take months to years, depending on how quickly the court system moves it through,” she said.
So What’s Next?
With the fate of Chesterfield Mall sitting with the courts, the future of the mall has become a popular topic of conversation. Will it be razed and reborn as an outdoor shopping area? Will it become a mixed-use development like the one planned for the former Crestwood Plaza site?
“It’s a very viable property, with tremendous location and income demographics and is attractive to prospective developers,” Tucker said.
Dillard’s, Macy’s and Sears own their own buildings and parking lots and those properties will not be part of the CBL receivership/loan default. “When the mall does sell, those properties would have to be negotiated separately, if purchased,” she added.
Currently, there are deed restrictions on the property, which state it can only be used for retail purposes. If a developer desires other uses, such as a hotel, apartments or offices, the property will have to be rezoned, Tucker said.
“Overall, Chesterfield Mall has been an important part of Chesterfield’s identity … and it continues to play a vital part in our community,” Tucker said.
Gundaker Commercial Group President and CEO Michael Hejna knows real estate, especially in Chesterfield. So, West Newmagazine asked what would be his prescription for the mall.
“Chesterfield Mall has an extraordinary location but is burdened by three department store owners and sluggish traffic,” Hejna said. “It is also burdened with Chesterfield Village covenants that restrict the mall to 100 percent retail activities.
“The mall cannot survive under those restrictions; they need to be modified before anything can happen. I would approach Sears and buy it out, demo/rehab the building into a large call center with office uses. The large parking area gives the mall an advantage to secure call center tenants who require eight to 10 spaces per 1,000 square feet. That could add 1,500 daytime employees flooding into the mall at times.
“I would push Macy’s and Dillard’s into store retrofits that generate more traffic. With the additional traffic from office tenants and new department store layouts, leasing the retail spaces within the mall becomes much more desirable. Traffic begets traffic and the mall thrives again.”
The Rise and Fall of Area Malls
Between the mid-1950s and 2003, nine malls were built in St. Louis County. Only three are economically viable today.
Northland Shopping Center went up in 1955 in Jennings, just west of the St. Louis City limits. Famous-Barr left the mall in 1994, the movie theater closed three years later and by 1999, redevelopment plans were proposed. Demolition occurred in 2005. The center now offers grocery and retail shopping and acts as a Metro bus transfer center.
Westroads Shopping Center in Richmond Heights also opened in 1955. It used a single anchor store, Stix Baer & Fuller, and provided an open-air feel to the rest of the site. In 1984, a property company bought Westroads, razed most of it and started construction of The St. Louis Galleria, “Where the best stores put their best store.” It fully enclosed in 1989, expanded in 1991 to add to anchor stores, Famous-Barr [now Macy’s] and a Lord & Taylor. Nordstrom’s replaced Lord & Taylor as an anchor in 2011.
In 1957, Crestwood Plaza debuted with two anchors, Sears and Scruggs-Vandervoort-Barney, and a split-level parking garage – pioneering ideas that went on to become mall benchmarks nationwide. Crestwood started as an outdoor shopping center that became partially enclosed in 1967, when it added Stix, Baer & Fuller as its third anchor. Fully enclosed in 1984, it was billed as “The Ultra Mall,” but even that tagline was not enough to save it.
After anchor stores began to close, Dillard’s in 2007 and Macy’s in 2009, the name changed to Crestwood Court and its owners began eyeing alternative ways to keep it open, including space for art galleries and dance studios. A LensCrafters store was the last business to remain prior to the Court’s closure in 2013. Urban Street of Chicago spent most of 2016 razing and continues to raze the original structures in preparation for a mixed-use development of residential and retail.
River Roads Mall opened in 1961, just one mile from Northland, in Jennings. Its J.C. Penney’s anchor became an outlet store in 1984 and its Dillard’s closed in 1986. The JCP Outlet shuttered in 1996, the same year the mall closed. After remaining vacant for 10 years, a construction company bought it, demolished at least part of the mall in 2006 and presented plans to build houses, businesses, a residence for senior citizens and more. Then, the construction company went bankrupt and the project died, too. The final building came down in 2011.
In 1963, South County Center opened for business with a Famous-Barr as its anchor. Like Crestwood, it was expanded and partially enclosed in 1967, when it added Stix, Baer & Fuller, along with an entire wing of stores. A Sears, food court and more mall stores came online in 2001. CBL bought the property in 2007.
Crestwood Plaza’s creator tried to add to his success when he founded Northwest Plaza in St. Ann in 1963, giving it four anchor stores, open-air ancillary stores and 1.8-million square feet. At the time, it was the largest shopping center in the United States. What was a mall comprised of 210 stores, four anchors and a movie theater closed in 2010. The mall has since been rebranded as the Crossings at Northwest and has a Menard’s home improvement store as one of its new anchors, surrounded by other, smaller stores and a Charter Communications call center.
A booming suburbia pointed the way to opening West County Center in Des Peres in 1969. The original format offered Famous-Barr and JCPenney as anchor stores and lasted until 2001. The JCP store was the only part of the original mall not razed for the new West County Center that opened in 2002. It added a Nordstrom, a food court and three parking garages. It has one of the area’s two Apple Computer stores and St. Louis’ sole LEGO store.
Jamestown Mall in North County was built in 1973. In Jamestown’s case, developers thought they could cash in by opening a mall ahead of a perceived wave of residential development that would support it. However, local geology betrayed them. There are sinkholes, or karst topography, scattered throughout the area north of the mall, which thwarted residential developers.
Sinkholes did not halt the mall’s expansion plans, however, which were completed in 1995 with the opening of its fourth anchor store. Five years later, the area’s demographic and housing altered to the point where it could no longer support the mall. Closure of the Ford assembly plant in Hazelwood followed by the addition of another North County mall in the early 2000s signaled Jamestown’s death knell. Many redevelopment ideas have been floated since 2008, but none have taken root. Jamestown Mall is now derelict, with mold, graffiti and other signs of suburban blight.
In 2003, the St. Louis Mills Mall, a “destination mall” was built in Hazelwood, the county’s ninth mall. With more than 200 specialty shops and eight anchor stores, it was supposed to draw customers from Columbia, Missouri, to Effingham, Illinois. Within four years, owner Mills Corp. merged with another company. In 2012, the mall was sold and renamed St. Louis Outlet Mall. Despite the addition of a Cabela’s in 2007, the 18-screen Regal Cinema and the Ice Zone hockey rink where the St. Louis Blues practice, the mall was auctioned last year for $4.4 million, a fraction of its $250 million original price tag.
Hejna summed up malls this way: “All indoor malls are dominated by the department store anchors; many own their own facilities. The mall cannot change until it understands how the department stores within its property redesign their merchandising and re-commit to the mall with their brand of retail marketing. Once that is determined, then the mall owners can begin a rebranding/repositioning that collaborates with the department stores.
“To assume that the old 100 percent retail sales process is the future is probably not survivable. The indoor malls will need to adapt to new, modern purchasing and buyers’ needs. There is a new generation of retailers emerging and the indoor malls will need to be nimble enough to adapt quickly to those newer retailers. Additionally, the new retailing will include non-retail sale components that feed off of retail sales and vice versa.”
How Much Retail is Too Much?
In an August 2012 interview with West Newsmagazine, Martin Sneider, adjunct professor of retail at Washington University’s Olin School of Business, called it “suicidal” for developers to build competing outlet centers in Chesterfield.
In 2013, Standard & Poor’s Rating Services reported on outlet center and mall competition.
“It is our belief that the St. Louis market will likely not be able to support all of this retail … There are just so many retail slices an existing trade area pie can be cut up into.”
Seemingly every time a major mall or strip center opens, critics ask a poignant question: How much retail can this area support? How many Lowe’s, Home Depots and Bed, Bath and Beyonds do we need? Are we just swapping older retail for newer sites and expecting customers to follow the brick-and-mortar trail?
As West Newsmagazine reported in October 2012 as Taubman was under construction, the city of Chesterfield could not have blocked construction of the newcomer malls. “We don’t have the ability, based on so many laws, to pick and choose winners and losers,” explained former Mayor Bruce Geiger. What most residents do not understand, said Geiger, is that as long as developers build in accordance with the zoning requirements of the city’s comprehensive [master] plan, the city has little choice but to let them proceed. In fact, if the developer complies with all city requirements and the city denies its approval, the city could open itself up to legal action.
In the case of the outlet malls, both sites are zoned planned commercial. This allows the building of retail stores, hotels, restaurants or office buildings.
“We didn’t zone it for a premium outlet center,” said Geiger. “We zoned it for a planned commercial, which allows retail.”
Pair of Newcomers
In 2013, those two new outlet malls opened approximately two weeks apart, Taubman’s Prestige Outlets and Simon’s Premium Outlets. What role, if any, have the two new outlet malls played in Chesterfield Mall’s waning prominence?
“Our sales tax data does show that the mall’s sales did decline once the outlet malls opened in 2013,” Tucker said. However, she added the city does not release actual sales figures.
Taubman, at 310,000 square feet, is located on the north side of Interstate 64 at the Boone’s Crossing exit. It offers an open-air, village-style property that is canine-friendly and offers fashion-focused retailers. In its 2015 annual report, the most recent available, Taubman posted tenant sales of $800 per square foot. It had a 95.3-percent occupancy rate and the average rent was $60.38 per square foot.
Simon’s property is located on the south side of the Missouri River, nearly adjacent to the eastbound span of the Daniel Boone Bridge. At more than 351,000 square feet, it has retailers such as Bath & Body Works, Calvin Klein, Disney Outlet and Fossil. The mall had a 99-percent occupancy rate, according to Simon’s 2015 Annual Report. Simon’s total sales were $568 per square foot while rents averaged $48.96 per square foot in its total portfolio.
Some people argue shopper attitudes are at the heart of the shopping shift in the last 20 years. No longer content with parking at a large mall and navigating on foot through or around anchor stores to find what they want, today’s customers may want to be able to park just outside their retail target, pop in, buy and leave.
Shoppers also seem to desire experiences, too. According to 75 percent of those surveyed about experiential shopping by Coldwell Banker Commercial and Harris Poll, shoppers want to be catered to, take in-store classes, view product demonstrations and receive free samples.
Beware the ‘Amazon Effect’
The so-called Amazon Effect is prompting retailers to reconsider how they do business – from customer service to physical locations to supply chains and more.
According to an article on seekingalpha.com, Amazon, with a market value of $355.9 billion on Dec. 30, 2016, is larger than most brick-and-mortar retailers combined. Together, Walmart, Target, Best Buy, Macy’s, Kohls, Nordstrom, JCP and Sears only yielded $297.8 billion on Dec. 30.
Moreover, brick-and-mortar values have fallen sharply in the past decade, according to Visual Capitalist. Walmart’s off slightly less than $1.6 billion over that period while Sears tumbled $26.7 billion since 2006.
While there are some inherent disadvantages – you cannot touch or examine objects or try on clothes – the positives of online shopping have outweighed the negatives for many people. People can save fuel, money, wear and tear on their vehicles and aggravation by avoiding shopping plazas. Amazon and Wayfair are just two of many popular online retailers.
“Online shopping has affected all brick-and-mortar retailers,” Tucker admitted.
In a store portfolio streamlining effort, Macy’s plans to open just 32 rather than 100 stores this year and invest the $250 million cost savings in its digital platforms and other strategies, but is it a case of too little, too late?
Blending the in-store experiences one cannot get online with the personalization and convenience that are online shopping hallmarks is key. Starbucks pioneered this model by using mobile ordering and payments, but also deciphering its customers’ buying habits. Up next is a coffee version of Siri or Cortana, the personal assistants from Apple and Microsoft, called My Starbucks Barista.
The take-away that is physical retailers must change their business model if they want to stay in business; doing things a certain way because that is the way they have always done them is no longer profitable. Adapt or die, though perhaps harsh, is the call to action that separates the malls that vanish from the ones that retain traffic.