Worcester Business Journal

wbjournal.com | June 26, 2017 | Worcester Business Journal 15 E N T R E P R E N E U R S & I N N O V A T I O N F O C U S W Malls need more entertainment options While the Greendale Mall in Worcester has been struggling for years, it's not necessarily an outlier: Malls practically everywhere are facing increasingly difficult challenges, both from online retailers, changing consumer habits and rising property costs. When polled online, WBJ readers said the best way for malls to avoid closing was to feature Amazon- proof tenants. F L A S H P O L L What should malls do to stay relevant going forward? Add a grocery store as a longstanding anchor tenant. 25% Focus more on adding entertainment options such as movie theaters and restaurants. 44% COMMENTS: "The days of malls aren't over, but the days of Macy's or Sears as the anchor are done. People just want more, and for places to exist in present form is a recipe for failure." "Malls need to offer services people can't find online. If they would be willing to lower their rental prices, they could offer space to small businesses and local crafters, creating a year round place for people to shop locally, and purchase products they can't find anywhere else." "Redevelop them into mixed-use properties." Add more service-centered tenants like hairdressers and auto repair shops. Nothing. The days of the mall are over. 22% not have the means, transportation or desire to shop at farther-away malls. Tenants who have stayed at Greendale have done so at least partially because of low and ever-declining lease rates. Those who've stayed have just held on. Bling Bling Fashion said sales are down 25 percent from last year, and East and West, a store that sells a bit of everything, is down one-third in the past several years. "Every day, I have custom- ers come in and ask, 'Why are you still here? Isn't the mall closing?'" said Sam Abdel, the owner of Greendale Furniture in the former Old Navy space. He remains confident, at least in the short- term. "This mall can have a future if you invest in it." More competition on the way Competition between malls is noth- ing new. In 1995, when Auburn Mall was planning a $45-million expansion and plans were unveiled for Gateway Mall, an enclosed shopping mall in Millbury, the Worcester Business Journal called it the "Great Mall Shootout." Gateway Mall ended up as the outdoor Shoppes at Blackstone Valley, and even after the project opened in 2003, both malls have carried on. But shopping malls across Central Massachusetts have given residents only more options while retailers have strug- gled. Presenting a fresh challenge for the Greendale Mall, the retail market will grow starting this summer with the 375,000-square-foot Lakeway Commons on Route 9 in Shrewsbury, and this fall with the 475,000-square- foot Apex Center of New England in Marlborough. Another Shrewsbury shopping plaza, anchored by a Market Basket, is proposed for the former Edgemere Drive-In site on Route 20. "If you want to be a player in that industry, the ones that tend to win are the newest ones," Baumann said. "These don't have a very long shelf life." "There's a creative destruction with malls," he added. "This is not a Worcester or a Greendale problem." Other area malls have over- come financial trouble or large vacancies. The Mall at Whitney Field in Leominster went into foreclosure in 2010, then filled a vacant Circuit City with Burlington Coat Factory. At Auburn Mall, the former Macy's home goods store is slated to be replaced with Reliant Medical Group medical offices and retail. Finding a better use Malls across the country have found new use or rebounded with an infusion of cash. Wells Fargo looked at 72 shuttered malls and found 23 were redeveloped into other retail uses, such as open-air malls, and 18 others were converted into residential, industrial or office use. The Wall Street Journal ran a story this month titled, "The Mall of the Future Will Have No Stores," in which the paper detailed examples such as a Michigan mall where Ford took over a former Lord & Taylor department store for 240,000 square feet of offices. That may be in line with what could work at Greendale, said Frank Hoy, a Worcester Polytechnic Institute business professor who suggested space at the mall might work as a business incubator. "We're looking at something that's in a classic need of a turnaround strategy," Hoy said. "There's an opportunity here for somebody." Central Mass. malls Big shopping centers have been opening across Central Massachusetts for decades, with many expanding since opening. Frank Hoy, business professor, WPI Mall at Whitney Field Leominster 1967 Auburn Mall Auburn 1971 Lincoln Plaza Worcester 1971* White City Shopping Center Shrewsbury 1976 Greendale Mall Worcester 1987 Speedway Plaza Westborough 1988 Worcester Fair Worcester 1996 Solomon Pond Mall Marlborough 1996 Shoppes at Blackstone Valley Millbury 2003 Bay State Commons Westborough 2007 Worcester Crossing Worcester 2010 Northborough Crossing Northborough 2011 Lakeway Commons Shrewsbury 2017** Apex Center of New England Marlborough 2017** *substantially expanded in early 2000s **projected Source: municipal property records, WBJ reports After Rue 21 and Payless ShoreSource close, Greendale will have vacancies at 19 of its 44 storefronts. 9%

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