Monday, September 16, 2013

St. Louis Outlet Mall, formerly St Louis Mills, struggles amid tough market

by Kavita Kumar St Louis Post Dispatch 9/16/13

HAZELWOOD • Randy Tienes knows only too well the signs of a dying mall — and he doesn’t see them yet at the struggling St. Louis Outlet Mall.

His shop, St. Louis Custom Gear, a sports apparel and custom embroidery shop, was in Jamestown Mall until 2010 when he moved his business to the sprawling outlet mall, then known as St. Louis Mills, in Hazelwood.

“Business is still good,” he said. “I think it’s just malls in general. I don’t think any mall has done that great with the exception of a few.”

The mall, which was renamed last year, has been grappling with challenges of the economy and competition from online shopping. And the opening of two new outlet malls in Chesterfield last month probably won’t help either, he added.

As is obvious to most shoppers who roam its cavernous corridors, this is not the best of times for St. Louis Outlet Mall.

Black curtains — the telltale signal of a struggling mall — cover up a number of empty storefronts. One of the most recent casualties was the Marshalls that closed in May. A sign above the recently vacated store promises: “New store coming soon!” but the mall did not provide any further details.

According to data included in a recent report by its management company, the mall was 84 percent leased at the end of June. By comparison, the average occupancy rate at malls in many markets is roughly 92 percent.

While the empty storefronts may be most visible to shoppers, what has not been as much in the public eye is that the mall, formerly owned by Simon Property Group, had been delinquent on its loan.

In October 2011, the loan was transferred to special servicing. And in January 2012, the $90 million Morgan Stanley Capital Investment construction loan matured and was defaulted on.

So in August of last year, the mall’s ownership was transferred to the lender via a special warranty deed in lieu of foreclosure. The Woodmont Co. came on board to manage the property and the mall was rebranded as St. Louis Outlet Mall shortly after.

Simon Property Group happens to be the developer of St. Louis Premiums Outlets, one of the two new outlet malls in Chesterfield. Woodmont is also a minority stakeholder in that project.

A Simon spokesman declined to comment on the company’s separation from the Hazelwood mall other than to confirm it was no longer the owner. Woodmont officials did not respond to requests for comment. And a spokeswoman for the mall also declined to comment for this story.

When the mall first opened in November 2003, it was the first new mall to be built in the region in 16 years. The $250 million mall was unusual in that it not only offered a hybrid of outlet-type stores and full-price stores, but also included a number of entertainment venues.

Mall officials at the time trumpeted the whole experience as “shoppertainment.” Today, the mall still has a NASCAR SpeedPark, an Ice Zone where the St. Louis Blues practice, and a skate park.

Now the assumption by Hazelwood city officials is that the lender is preparing to sell the mall.

“That would be the most logical thing,” said David Cox, economic developer for the city of Hazelwood.

He noted that Woodmont has been putting some resources into deferred maintenance of the property that was neglected during Simon’s tenure.

Cox added that the mall also has a number of things going for it. At the top of that list is that it has the only Cabela’s store in the state, which continues to post strong sales.

“Every time I go in there, it’s packed,” he said. “It doesn’t matter the time of day. It’s a pretty big draw from several states.”

Other mini-anchors such as the movie theater, the Children’s Place, Burlington Coat Factory, and Bed Bath & Beyond also seem to be doing fairly well, he said. So while there’s been a lot of turnover among smaller specialty stores, it’s those anchor stores that have kept the mall going. And sales tax returns indicate the mall has been showing small gains coming out of the recession, he added.

As for the empty storefronts, Cox said one of the challenges is that the mall is so big — probably too big — at 1.2 million square feet.

“They could have a lot more stores than a lot of other malls and still have a lot of empty space because it’s huge,” he said.

The mall had a small victory in March when Ross Dress for Less opened, finally filling the space that had been vacant since Circuit City went under a few years ago.

Christopher Lewis of Hazelwood still shops at St. Louis Outlet Mall about once a month. He’s noticed a lot of the smaller shops come and go. But he said the place is still pretty busy on the weekends.

“I hope it doesn’t go out of business,” he said.

Paul Parker of Florissant has been coming to the mall for years, too. He’s also seen the traffic dwindle since the mall first opened.

“For me, the fact that it’s not crowded is a plus,” he said. “And it has what I need.”

And, yes, the mall corridors may seem kind of empty at times. But he said that sight can be deceiving.

Because when he walks into some of the more popular stores, he finds to his surprise that they are actually kind of busy.


Premium Outlet Shopping® Has Arrived in St. Louis

No comments:

Post a Comment