Hartford Business Journal

6 HARTFORDBUSINESS.COM | NOVEMBER 1, 2021 Deal Watch By Christopher Hoffman W alking through some Connecticut malls today can be a depressing experience: vacant storefronts, shuttered anchor stores, rundown exteriors and empty parking lots abound. The shift to e-commerce, accelerated and exacerbated by the COVID-19 pandemic, has turned some of these once bustling centers of commerce into shadows of their former selves. But can these one-time seemingly invincible retail titans be brought back to life, even in the face of the growing popularity of Amazon and other online commerce sites? The answer, according to local real estate professionals, municipal officials and mall owners, is yes. But to survive, malls must change. The days of the massive enclosed shopping mall anchored by traditional department stores are over, they say, at least for some properties. Something new must take their place. "The future is not what the past was," said Rina Bakalar, director of economic development in Trumbull, home to the Westfield Trumbull Mall. "It needs to transform." That transformation requires a shift to new uses, including medical facilities, offices, apartments, entertainment venues, hair salons and fitness and wellness centers. In some states, empty mall space has been turned into Amazon fulfillment centers, even schools. Backing that view is an April analysis by Bridgeport law firm Pullman & Comley that concluded a radical rethinking of Connecticut malls "is imperative for their long- term viability and survival going forward." Without doing so, they risk becoming "the brownfields of the 21st century," the analysis, co-authored by attorneys Gary B. O'Connor and Amanda G. Gurren, said. Transformation, however, will not be easy. Malls seeking to remake themselves face major obstacles, including fragmented ownership that leaves different parties controlling different parts of the property and local land-use boards reluctant to grant needed zoning changes. Adding to the challenge are owners looking to sell and therefore uninterested in transformation, or focused on squeezing value from their deteriorating properties instead of resurrecting them. "All of them need transforming," said Dan Zelson, a principal at Charter Realty & Development in Greenwich, which has helped remake malls in Rhode Island and Pennsylvania. Charter also owns several retail properties in Greater Hartford, including Windsor's Evergreen Walk and Blue Back Square in West Hartford, which has been hit by vacancies from the pandemic. "The smart mall owners are doing that where they can right now. But it's very complicated to do it. There are issues." The vacancy rate for U.S. regional malls hit a record 11.4% in the first quarter of 2021, up from 10.5% in the fourth quarter of 2020, according to Moody's Analytics. Live, work, play Back in Trumbull, economic development chief Bakalar said she thinks her town has found the secret sauce to saving its mall. In October, developers broke ground on 260 luxury apartments on the Westfield Trumbull Mall property. The complex, a short walk from the mall, is the centerpiece of a "live-work-play" model that many believe is the future of malls. The idea is to create apartments along with walkable green spaces linked to malls that have more restaurants, entertainment venues and health and fitness businesses in addition to retail. "With the connections to the mall, we think [the apartments] will be attractive to residents, and it will attract tenants to the mall to have people living there," she said. Trumbull, Bakalar said, worked closely with owner Unibail-Rodamco- Westfield to enable the concept, making zoning changes in 2018 that allowed for apartment development. The town, she said, is committed to strengthening the mall, which is its biggest taxpayer and provides 3,000 jobs. But concerns remain. Unibail- Rodamco-Westfield, which is based in Europe, announced earlier this year that it will sell its American properties, including the Trumbull mall. That inevitably creates anxiety, Bakalar said. "Candidly, we're not against a sale," she said. "What we are concerned about is who would buy it. We want a quality buyer. We don't want a bottom feeder. We want someone that wants to do something to transform the property." Trumbull isn't the only Connecticut mall where the live-work-play model is seen as salvation. Just up the road in Milford, owners of the Connecticut Post Mall — Centennial Real Estate of Dallas, Texas — had similar plans for that facility. The company wanted to demolish the empty Sears store and build 300 market-rate apartments along with pedestrian-friendly green spaces. "Our approach is, and what you will see from many others, is remaking these projects into a more mixed-use environment that provides a smaller amount of retail with residents, hotels, entertainment, miscellaneous medical in an integrated pedestrian- friendly gathering place," Centennial CEO Steven Levin said. "You're creating a place to live, work, play and entertain." But the city's Planning and Zoning Board stymied the project in Struggling CT malls look for new uses — office/ medical space, apartments — to fill empty storefronts Owners of the Connecticut Post Mall in Milford proposed to demolish an empty Sears store and build 300 market-rate apartments along with pedestrian-friendly green spaces, but the plan was rejected by the town. RENDERING | CONTRIBUTED Steven Levin Dan Zelson

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