Outdated malls try for own pizazz They're putting on a fresh look to combat those splashy big guys

Retailing

March 29, 1998|By Lorraine Mirabella | Lorraine Mirabella,SUN STAFF

Once the reigning giants of the suburban retail landscape, outdated malls and shabby strip shopping centers now face a mid-life crisis of sorts.

Struggling to compete with the pizazz of bigger, splashier regional malls, themed entertainment centers and category-killer stores that offer an overwhelming choice of toys, towels and tennis shoes, the old standbys in suburban Baltimore, as elsewhere, are seeking to forge a new, fresher identity.

At the long-troubled Hunt Valley Mall, that means bringing in a Wal-Mart and a multiplex movie theater with the now-obligatory stadium seating; both are now under construction.

At Towson Marketplace, whose parking lots resemble a war zone of crumbled concrete and cordoned-off areas, a third reincarnation will add proven anchors, including Target. Stores will begin opening in the summer.

And at Arundel Plaza Shopping Center in Glen Burnie, Lutherville-based Mid-Atlantic Realty Trust, which became a $6.76 million investor in December, is looking to another of the "category killers" -- home improvement chain Loew's Cos. Inc. -- to reinvigorate the 1960s-era supermarket-anchored center, which had lost Sears to nearby Marley Station mall.

With the deep freeze of the recession a distant memory, developers here and elsewhere are spending freely to lure shoppers back amid intense competition.

"Now is the time," said Tom Maddux, a principal with commercial real estate brokerage KLNB Inc.

"Everybody is spending money on their centers. Retailers are asking for newer, more modern facilities, and they are willing to pay the rent to cover redevelopment costs. Developers have access to financing and are willing to do it."

More than half of 1,434 shopping center construction projects started nationwide last year involved renovations or expansions of centers, according to the International Council of Shopping Centers.

In the Baltimore region, store space to accommodate this decade's retail growth only recently has begun catching up to demand, coming mostly from retailers completing expansions in the region, according to an annual retail market update released last week by KLNB.

But, thanks to a strong economy, demand still exceeds supply, as shown by a 1.4 percent rise in average rent for retail space last year, to the current $15.35 per square foot, according to the survey.

"Historically, we've been under-served," Maddux said. "The amount of retail space in our market has always been limited by location -- there are only so many places you can build it."

The rush to put new faces on old shopping spaces is driven not only by the economic upturn but also by the sobering realization that not changing could mean disaster for operators, developers and tenants.

Older centers, after all, must compete with the new so-called "power" centers such as Columbia Crossing in Columbia, Nottingham Square in White Marsh and Corridor Marketplace in Laurel, all completed within the past year. They house "big-box" tenants such as Best Buy, Dick's Sporting Goods, Blockbuster and Toys R Us.

Such retailers have stolen sales from department stores by offering selection, convenience and low prices, said Bruce Van Kleeck, vice president of member services for the National Retail Federation.

"These power centers are going into large, residential communities, and they're being placed closer than the traditional mall," Van Kleeck said. "In families where two people work, people want things quick -- they don't want to drive all the way across town. They want a choice of high, medium and low price. That's what these big-box category killers can do."

"Malls are still continuing to go up in some new markets across the country, but they are very selectively being developed."

Increasingly, malls are targeting a particular niche, whether discount or high end, he said. Hunt Valley Mall, which had lost shoppers to the newer Towson Town Center and Owings Mills Mall, will become value-oriented, with the first new tenant, a 20,000-square-foot Designer Shoe Warehouse, to open Thursday.

Or, as in the case of Towson Marketplace, they're being de-malled. Developer Talisman Cos. is ripping out the interior common areas of a once-enclosed mall to create a 700,000-square-foot power center called Towson Place. Besides Target, tenants will include Petsmart, Bed Bath and Beyond, the Sports Authority and a Superfresh grocery store.

"The regional mall is today still the powerhouse vehicle for retail sales in the United States," said Jim Schlesinger, chief executive officer of Talisman Cos. "The problem is with this proliferation of malls, and some were built too small by today's standards or don't provide the amenities by today's standards. Malls developers are faced with 'How do I make this work?' "

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