The reimagining of ailing malls
Changing to mixed-use, experiential space will bring their back relevance, experts say
Once the darling of U.S. retail and the weekend destination of teenagers everywhere, malls today are hurting. The quest to reinvent the American mall is on.
Roughly 25 percent of America’s 1,200 malls will close in the next three to five years, according to Coresight Research, as the pandemic, which forced a shutdown of malls in New York and across the country, hastened the downturn for traditional brick-and-mortar retail.
Most vulnerable are enclosed malls that rely on big anchor stores, like many in the Northeast. Chain department stores that typically occupy those mega anchor slots — like Macy’s and Lord & Taylor — have been hit hard by bankruptcies in recent years, leaving behind gaping real estate holes and decreasing destination pull for shoppers.
“The development model ties everything together so the various leases are contingent on the other properties being leased,” said June Williamson, chair and associate professor at the Spitzer School of Architecture at the City College of New York. She is also the author of the new book “Case Studies in Retrofitting Suburbia: Urban Design Strategies for Urgent Challenges.”
“It’s turned out to be a fairly precarious model when all the eggs are in one retail basket, so there can be a bit of a domino effect that you don’t see with other use types,” she said.
Case in point: in Kingston, Best Buy closed its Hudson Valley Mall location in October, citing a decline in retail there after the mall saw the exodus of JC Penney, Macy’s and Sears over the past five years. Hull Property Group, which owns and operates the Hudson Valley Mall and did not respond to requests for comment on its future there, last year converted the former Macy’s into a health center and urgent care facility.
It’s that type of mixed-use or experiential space that will make malls matter again, experts say. “Those that are going toward mixed-use are the way things are going long-term,” said James Cook, the Americas director of retail research at JLL, a global commercial real estate services company.
“Leading up to COVID, we were talking about how brickand-mortar retail has to be about experience,” he said. “The best performing malls are Class A shopping centers” — meaning malls with high foot traffic and sales, coupled with low vacancies — “that are really experiential, and people will return to those (post-pandemic).”
The real limit to evolving malls is our imaginations.
“For many people, they have
impressed upon their mind that this is a retail area and that’s what people want and it’s about bringing it back and wringing more retail out of it,” Williamson said. “But really it’s just land. Land is land. It can get reimagined.”
Hudson Valley has enough snow that the region doesn’t need to add indoor skiing to its malls, but the area is trying to diversify its mall mix. Here, three local mall operators share how they’re trying to reinvent their spaces in an effort to stay viable.
What if a struggling flea market mall could transform itself into a kind of in-person Etsy, where shoppers can interact with, and buy from, makers directly?
That’s the inspiration behind Emporium Square Artisan Market, a micro-mall of creators and vendors under one roof that launched last August in Middletown, with Orlando Lallave and Barbara Martinez at the helm.
“How can we make the retail shopping experience work in a world of ebay and Amazon, which are growing at the expense
of small shops?” said Lallave, owner of Emporium Square. “People’s desire to have a personalized shopping experience is not dead. The need for a tangible, unique shopping experience is still there.”
Lallave, who owns and operates Fusion Eyewear, was the last remaining tenant of the former flea market when he decided to rent out the entire 50,000 square-foot space, renovate it and fill it with artisan boutiques — offering an affordable, low-risk way for makers to
enter the brick-and-mortar world. A 10-foot-by- 10 foot space at Emporium Square starts at $300 a month, with no long-term leases required. Lallave and Martinez provide marketing muscle and overhead like heat, Wi-fi and electricity. Lallave said a typical optical store like his would spend $20,000 a month in rent at a large traditional mall.
“We’re about the creator-to-consumer experience, and we’re making it affordable for merchants to do it,” said Martinez, Managing Partner of the emporium. “This is a way to bring personalized shopping to another level without the crippling overhead of brick-andmortar.”
“We keep overhead low and let them (merchants) focus on the things that make their business special while we handle the things that make starting a business seem too intimidating,” Lallave said. He and Martinez help guide merchants through processes like insurance, business registration, e-commerce site development, logo creation and marketing — things that can overwhelm or distract a new business owner.
About 50 merchants — a mix of one-of-a-kind retail and food shops, from Farmbody, which creates CBD skin care products, to Lioness Luv, maker of athletic leggings and accessories for women — operate spaces at Emporium Square, uniquely personalizing each booth. Martinez and Lallave vet all vendor applications with an eye toward keeping the mix of sellers distinctive and without competitive overlap. The duo asks makers to create their wares in their on-site booths, so consumers can connect with them and their craft firsthand.
“To qualify to be a merchant, I always ask: If I can find it in Walmart we don’t want it here,” Lallave said. “I don’t want to recreate Walmart or a (chain) mall. What you find here is customized, one-of-a-kind.”
The duo has plans to expand Emporium Square later this year to include an indoor farmers market, event space and coworking space. They have already been asked to recreate their model elsewhere in the Hudson Valley.
“We’ve been contacted by (the town of ) Nyack to replicate our model, and we said, ‘We just started! We need more time!’” laughed Martinez, who previously was the executive director of the Goshen Chamber of Commerce.
While it might seem unwise to start a retail market in a pandemic, Martinez insists the timing was ideal.
“I think the pandemic has fueled this model. It’s hard to get foot traffic in right now, yes, but a lot of these small businesses were closing their doors or not making the money they needed to survive, and now they can,” she said.
“This is our way of saving small business. We’re offering a solution that’s affordable and low risk, so you can still do what you do and follow your dream.”
“As we all know, malls have been really struggling,
and what we want to do is … reinvent that regional mall experience,” Bob Desalvio, president of Genting Americas East, told the Town of Newburgh board at its Feb. 22, meeting. The board reviewed Genting ’s proposal to bring a 90,000-squarefoot electronic gaming casino to the Newburgh Mall.
The $32 million project would transform a former Bon-ton department store into Resorts World Hudson Valley, creating a sister property to Resorts World Catskills in Sullivan County, also owned and operated by Genting Americas. The new facility would bring 1,300 video gaming machines and a Bar360 lounge to the mall, which has struggled in recent years and is home to the last Sears store in the Hudson Valley.
At the February town board meeting, Meghan Taylor, Genting Americas’
vice president of government affairs and public relations, said the project would employ 200 to 225 people full time, with 70 percent of those jobs filled by union employees. That would translate to more than $15 million in annual wages, she said, plus another $3 million annually to the town of Newburgh through a Host Community Benefit Agreement.
Desalvio and Taylor said it is Resorts World’s hope that the gaming facility would spark interest among local businesses to join the mall and benefit from foot traffic. “The last time we were at the mall we counted, I believe, 17 vacancies,” Desalvio told the town board. “By us not putting restaurants or retail in the (gaming) facility, we’re encouraging those businesses to make a deal with the mall to bring their businesses into the mall.”
Orange County Executive
Steve Neuhaus supports the proposal, saying in a statement that this project “is an investment in jobs, in growth and in the future of Orange County, and it will have an immediate — and positive — impact at a time when we need it the most.”
Apartments may be joining the Poughkeepsie Galleria mall footprint in Dutchess County. Pyramid Management Group, which owns and operates that mall and 13 others in the Northeast, announced plans to build 282 apartments adjacent to its mixed-use Kingston Collection mall in Massachusetts
This effort follows a national trend to redevelop malls in a way that makes their footprints more population dense by building an apartment complex or hotel inside of, or immediately adjacent to, malls.
Essentially, it’s a reimagining of the American village square.
A spokesman for Pyramid declined to share specific plans or timelines for the mall in Poughkeepsie
“The development of a residential complex at our Kingston Collection is really just the beginning of a much broader, portfolio-wide diversification strategy to bring popular, exciting new uses, such as residential, into the mix with our existing assets,” Stephen J. Congel, CEO of Pyramid Management Group, said.
The developer also applied this “live/work/ play” diversification strategy to the Crossgates Mall in Guilderland when it announced in 2018 that it would build 192 apartments and 30 town houses on land just west of the mall. The subsequent traffic impact is a top concern for residents.
Of many proposed mall fixes, don’t expect Amazon to be a widespread silver bullet, experts say. While the online retailer is bringing a 4-Star store to Crossgates Mall, talk about converting malls to Amazon fulfillment centers is highly unlikely, according to Cook.
“Turning a mall into an industrial-like warehouse or e-commerce fulfillment is really difficult.
“Municipalities would lose sales tax dollars, and then you’d have all the people living around the mall — because malls tend to be built in residential areas — who do not want an industrial-use space where they live and having things like 18-wheeler trucks driving around,” Cook said.
“It’s a hard sell, definitely.”