Retail turmoil creates challenges at Bayshore
Bayshore Town Center’s ownership change comes at a time when retailers are facing big challenges — and shopping malls are adding new uses to broaden their appeal.
The Glendale mixed-use development, which includes stores, offices, apartments, restaurants and a movie theater, is now owned by AIG Global Real Estate Services, an affiliate of New York-based financial services provider American International Group Inc.
AIG took ownership of Bayshore as the result of loan restructuring negotiations initiated by the previous owner, New York-based Olshan Properties.
AIG declined to provide details about those loan negotiations, and Olshan didn’t respond Tuesday to a request for more information.
Olshan apparently wasn’t late on its loan payments to AIG, said John Fuchs, Glendale city attorney.
And Olshan was current on its financial obligations to the city and its Community Development Authority, Fuchs said.
That’s crucial because the authority helped finance Bayshore’s $305 million redevelopment in 2006. The city funds are being repaid through annual property tax payments on the mall’s improvements.
The city has spent around $84 million, which includes interest charges on its debt.
Once that debt is paid off, which is scheduled for 2024, Bayshore’s property tax payments will flow to the city’s general fund, its school district and other local governments.
“The mall certainly is busy,” Fuchs said.
But Bayshore has faced some challenges, said Fuchs and Glendale Mayor Bryan Kennedy.
The spring 2016 liquidation of the Sports Authority chain and the December 2014 closing of the mall’s Sears department store both created large vacancies at Bayshore. There have been other closings in recent years, such as Eddie Bauer, Williams-Sonoma, Aeropostale and Talbots.
Also, the continuing growth of Amazon.com Inc. and other online retailers has taken its toll on shopping malls nationwide.
“This isn’t limited to just Bayshore,” Fuchs said.
Those vacancies created challenges for Bayshore, Kennedy said, with cuts in security employees and reduced upkeep at the mall.
Also, Olshan was less involved with community events than the mall’s previous operator, Columbus, Ohio-based Steiner & Associates Inc., Kennedy said.
All those circumstances “gave an overall perception that Bayshore wasn’t doing very well,” he said.
Kennedy and other city officials have high hopes for the mall’s prospects under AIG’s ownership.
“I only see things getting better,” he said.
City officials have been waiting for the mall’s north end to be redeveloped.
The vacant Sears department store was demolished this fall to make way for new stores and possible apartment buildings.
Seattle-based Nordstrom Inc. in June announced plans to open its discount wing, Nordstrom Rack, at Bayshore in fall 2018. Total Wine & More, T.J. Maxx and HomeGoods are other possible new retailers at the mall.
Dallas-based Cypress Equities Managed Services, which AIG has hired to help operate Bayshore, has indicated new development plans for Bayshore will be announced in 2018. Those plans will require city approval.
If the plans include housing and more stand-alone retail buildings, Bayshore would be following a formula used by other new Milwaukee-area mixed-use developments.
Those include Whitestone Station, in Menomonee Falls, and 84 South, in Greenfield.
Also, other area shopping malls have increasingly turned to commercial uses other than stores to draw people.
That includes restaurants and entertainment uses, such as movie theaters and gaming centers, at Brookfield Square and Greendale’s Southridge Mall.
Tom Daykin can be emailed at tdaykin@jrn.com, and followed on Twitter and Facebook.