Southdale Center, the nation?s first enclosed regional mall, recently redesigned and relocated the food court from the third level to the second level near a brand new mall entrance in the wing between anchors Macy?s and J.C. Penney. The mall also installed skylights to bring in more natural light to that area of the mall. (STAFF PHOTO: BILL KLOTZ)
Southdale Center is hoping that a multimillion-dollar facelift will give the aging mall a much needed boost in attracting tenants and shoppers.
Work on the nearly yearlong project is wrapping up this month at the 1.3 million-square-foot center, which made history when it opened in 1956 as the nation?s first enclosed regional mall.
?We are seeing shoppers that have not been in this mall for years that are coming back,? says Southdale General Manager Laurie Van Dalen.
Key changes to the mall include a redesigned food court, the addition of a new entrance between anchors J.C. Penney and Macy?s, and renovations to six other entrances. Southdale also created a children?s play area near J.C. Penney and upgraded lighting and flooring throughout the mall.
?I think the results are amazing,? says Steve Griffin, store manager at Herberger?s department store, another anchor. ?Customers that are walking in and seeing the mall for the first time and those customers that haven?t shopped here for years are going to be very excited by the new look.?
The old greens and browns have been replaced by a more neutral color scheme, and the overall design is much brighter, notes Griffin.
?We have already seen a lot more traffic in the mall and to our store,? he says.
Van Dalen declined to disclose exactly how much money the mall?s owner and manager, Indianapolis-based Simon Property Group, has spent on the renovations. But to qualify for a $5 million interest-free loan from the city of Edina, Simon agreed to invest at least $14 million in renovations by the end of the year. The city is using funds from the Centennial Lakes tax increment financing district to finance the loan.
Minneapolis-based Kraus-Anderson served as general contractor and Baltimore-based JP2 Architects handled the design.
Simon is hoping on a big return on that investment in terms of more shopper traffic, higher sales and increased leasing activity. Renovations have been on the agenda since Simon acquired the mall in 2007.
?Once we had developed our plans, we started talking to retailers who we thought would want to come to the center once we had decided to renovate, and we have definitely seen an uptick in leasing,? says Van Dalen.
Renovations entice tenants
The proposed renovations were instrumental in landing Herberger?s as a new anchor tenant to fill the vacant Mervyn?s space. Herberger?s opened its 150,000-square-foot store at Southdale in November 2011, and the move served as a catalyst to launching the renovations.
?We knew they were going to start their remodel in January, and we knew about all the plans they had to improve the food court and add the new retailers,? says Griffin. ?That was one of the reasons we came here. We knew it was going to be a very fresh and exciting mall.?
Renovations also have helped to attract additional tenants in the past year. Lucky Jeans, Madewell, Francesca?s, Soma Intimates and White House | Black Market have all opened this year. Sephora and Journeys opened this month.
Although Southdale declined to disclose its current occupancy, some industry estimates place the vacancy rate at the mall between 10 percent and 15 percent. That vacancy is still well above the 3.3 percent average vacancy rate among the Twin Cities area?s eight regional malls, according to year-end data provided by Bloomington-based Cushman & Wakefield/NorthMarq.
Southdale has struggled to remain competitive with aging property and increased competition from the Mall of America in Bloomington and Eden Prairie Center.
?I think Simon is trying to make the best of what wasn?t the greatest design to start with,? says John Johannson, a senior vice president at Colliers International in Bloomington.
Southdale was one of the early pioneers in mall design.
?That mall was built before there was any experience in building indoor regional malls,? he adds.
Despite its flaws, Southdale earlier this year was included in a PBS documentary titled ?10 Buildings That Changed America.?
An extra challenge for mall leasing is that Simon is trying to push its rents higher in the wake of the property improvements, notes Johannson. However, the completed renovations and changes at the mall should help the mall to boost its occupancies, he adds.
?I am certain that the activity ? construction, new design, new tenants ? has had a positive impact,? says Johannson.
As one of the largest mall owners in the country, Simon is in a good position to leverage its national roster of tenants to bring new retailers to the mall, he adds.
?It?s still a great location with great demographics. It is just a very tired product, and they are doing what they have to in order to try and keep the property competitive,? says Johannson. ?You either invest in it or let it wither away, and they chose to invest in it.?
Facelift and added amenities
One of the main goals of the renovation was to reposition its food tenants and bring in more variety. The mall relocated the food court from the third level to the second level near a brand new mall entrance in the wing between Macy?s and J.C. Penney. The mall knocked down walls to reclaim some leasable space that had been sitting empty.
?That gave us an opportunity to really open up the second floor in the J.C. Penney wing,? says Van Dalen. The mall also installed skylights to bring in more natural light to that area of the mall.
On one side of the food court, there is now room for seven fast food restaurants along with a common seating area. On the other side, there are two fast casual restaurants near the new entrance. Both of the fast casual restaurants, Qdoba Mexican Grill and Smashburger, are new to the mall. Qdoba opened Dec. 10 and Smashburger will open in spring 2013. Subway, Teriyaki Japan and Panda Express all opened in the first half of December. The mall is expected to release the remainder of its fast food tenants soon, according to Van Dalen.
In addition to creating a new entrance to the mall, Southdale gave its other six entrances a facelift that included installing sliding glass doors. Other improvements to the mall include cosmetic changes such as painting, upgrading public restrooms and adding new flooring and lighting throughout the property.
The mall added a new children?s play area on the first floor of the J.C. Penney wing, which opened Dec. 8.
?Even though the renovation is complete this year, we will continue to be adding stores next year,? says Van Dalen.
Southdale also hopes to benefit from a 232-apartment development coming to the corner of 69th Street and York Avenue. (Southdale sits between West 66th and West 69th streets and is bordered by France Avenue on the west and York Avenue on the east.)
The apartments, under development by StuartCo, should bring more people into the community ? and, it is hoped, into the mall, Van Dalen says.
See below for a slide show of the renovated Southdale Center by staff photographer Bill Klotz:
This entry was posted on Tuesday, December 18th, 2012 at 7:30 am and is filed under Business & Economy, Construction & Development. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.
Source: http://finance-commerce.com/2012/12/renovations-perk-up-aging-southdale-center/
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