Experts: Mall can absorb closings
Sears, Elder-Beerman fates will speed site’s transition, officials say.
The Dayton Mall is looking at a frightening future when at least 250,000 square feet of retail space becomes empty, hundreds of jobs are lost and thousands of dollars in tax revenue vanish in the next few months.
In November, longtime retailer Sears will close its doors, which follows the shuttering next week of Elder-Beerman’s location at the mall after months of liquidation sales due to its parent company’s bankruptcy earlier in the year.
“The closure of the Sears store will be a challenging time for the employees and the mall, but the community has laid the ground work for the transformation of this highly valuable area,” said Miami Twp. Community Development Director Chris Snyder.
Sears wasn’t counted on to be a major player in the Dayton Mall’s future as far back as 2015, when an economic development board created by Miami Twp. and Miamisburg adopted a master plan for the area.
That board, now known as the Miami Crossing Joint Economic Development District, commissioned the plan with an eye on reshaping activity around the mall – including residential development — due largely to changing demographics.
The mall accounts for more than $200 million in annual sales, and the 2.2-square mile master plan area employs more than 8,000 workers.
Local economic development experts said losing these major department stores, while unfortunate, is not the beginning of the end for the mall.
“It’s certainly disappointing to see that the Sears store at the Dayton Mall won’t be able to remain open,” said Chris Kershner, executive vice president of the Dayton Chamber of Commerce. “But we have strong confidence in Miami Twp. and the Dayton Mall, that that is going to continue to be a successful location in the future.”
The Sears site covers more than 15 acres, and the Miami Twp. group has been in discussion with Seritage, a Sears holding company, about the future of the property.
“We cannot comment at this time regarding specific plans for the site beyond the current redevelopment of the former Sears Auto Center facility, but we can say that this was not an unexpected decision by Sears and that planning for this transition has been underway for some time,” Snyder said.
Last year, the township announced the first move in that strategy, when a deal was struck with Outback Steakhouse to convert the closed Sears Auto Center into a restaurant.
History of Sears
Sears Holdings, the owner of both Sears and Kmart, announced Wednesday that it would close 46 “unprofitable” stores. The Dayton Mall store and Cincinnati’s Northgate Mall store made the list.
The department store that was America’s number one retailer based on sales for decades has been struggling in recent years, announcing back-to-back rounds of closures to stay afloat and avoid filing for bankruptcy. Just this month, CEO Eddie Lampert offered to buy Sears Kenmore brand, another move analysts say was meant to stave off filing for bankruptcy.
As of May 5, Sears Holdings Corp., which owns Sears and Kmart, had 894 stores, according to the Wall Street Journal. The recent announcement of closures will bring that number to 848.
The retailer that moved from a catalog business to retail stores to fight off competition in 1925 had 863 mallbased Sears stores and an additional 1,200 hardware, outlet, tire, battery and independently owned retail stores in smaller markets by the end of 2000, before it was purchased by Kmart in 2004, according to the company’s website.
Sears seems to be following the same fate as other big boxes like Elder-Beerman and Toys R Us, which couldn’t adjust to the new retail landscape. As online shopping grows, more brick-and-mortar stores that couldn’t keep up announce closures or bankruptcy filings.
Future of the Dayton Mall
Miami Twp. created its plan as a means of keeping the area vibrant with short- and long-term projects.
The 145-page plan includes a market assessment that proj- ects more than $200 million in proposed investment. The analysis shows a potential to create 1,200 multifamily residential units and more than 350 new jobs from thousands of square feet of new retail and office space within 12 years.
The plan focuses on three sites; the Sears parking lot was considered, but was scratched months before the final plan was adopted. At the time, master project manager Steve Kearney of Stantec’s Urban Places Group said officials thought targeting sites around the mall – and not the mall itself – would be a better strategy.
“The mall will never be one of those catalytic sites,” he said in 2015. “Because of that, we did not want to create any confusion with the public that that’s an area we would be looking at.”
In addition to the loss of Elder-Beerman and Sears, JC Penney and Macy’s — the mall’s remaining anchors — have struggled and both didn’t have positive earnings reports recently that investors hoped for. One success for Macy’s has been Backstage, which offers an off-price outlet section inside their stores that has become popular with consumers.
Despite a national mall vacancy rate that hit 8.6 percent in the first quarter of 2018 — the highest since 2012 — some said malls like the Dayton Mall will still remain relevant.
“Malls aren’t dead. Malls are going to continue to grow,” said Gordon Gough, president and CEO of the Ohio Council of Retail Merchants.
Malls are becoming more experience-based, he said. And while not a lot of department stores are looking for new locations, those spaces will be filled with some kind of mixed-use project. And with the Dayton Mall’s location in a more affluent part of the county near Interstates 75 and 675, Gough said the mall is far from dying.
What’s next for Sears First, Seritage will decide if it’s selling the Sears property, and if it is, someone will buy, said Andrew Feinblatt of OnSite Realty. Dayton Mall owner Washington Prime could purchase the property, as it has done in the past when it acquired four Sears properties and adjacent auto centers for $28.5 million in other parts of the nation.
“If they feel like there’s something they can do with it, they’re going to go work a deal,” Feinblatt said. “If they have an end game, then they’ll probably pursue it right away.”
The mall owners did not return a request for comment.
Somebody else with a different “end game” could also buy the property, Feinblatt said. Either way, he said he’s confident the space will be used or redeveloped.
But the potential buyers will have a lot of work ahead of them, including a deal on the property, modifying governing documents and working with the local municipalities. Just to modify a governing document can take years and cost more than a million dollars, Feinblatt said.
The options
Regardless of who buys the Sears property at the Dayton Mall, there are many redevelopment options, including another department store to fill the same use. The Dayton Mall has found some success in filling large spaces this year. A Ross Dress For Less store will open at the mall in the former space housed by hhgregg, according to county records.
With mixed-use becoming the new retail trend, Feinblatt said the space could become some sort of large entertainment center that would offer bowling, laser tag, a trampoline park, etc.
The Tuttle Mall in Columbus has done this with the announcement of a large arcade and indoor amusement park planned for an anchor space, Gough said.
Gough said the space could also be broken up into smaller stores for more specialized retail.
Or the owners could knock down the anchor spaces altogether and add outward facing restaurants like the Mall at Fairfield Commons did in 2015 after its two Elder-Beerman stores consolidated into one.
“There may be other opportunities we don’t even know about that the current owners are reviewing,” Gough said.
Sears in the Miami Valley
Aside from the Dayton Mall’s Auto Center closing last year and the Trotwood Sears store on Salem Avenue closing in 2013, the Dayton area has largely escaped the chopping block each time a new round of closures was announced — until now.
Stores in Piqua, Springfield and the Mall at Fairfield Commons in Beavercreek, as well as the appliance outlet stores in Kettering and Huber Heights, were not on the list to be shuttered.
After the two recently announced Ohio closures, the state will have 47 Sears and Sears Auto Center stores left, according the company’s website. However the state has been purged of Kmart stores, with only 12 left and none in the Dayton region after the last one closed in 2017.