Filter by All
The fight to save Huntsville’s first Super Mall: Leaders discuss future of Madison Square
- September 9, 2013
- Our People, Retail Real Estate
By Lucy Berry | firstname.lastname@example.org
Follow on Twitter
on September 08, 2013 at 8:00 AM, updated September 08, 2013 at 10:13 AM
HUNTSVILLE, Alabama – Strolling through Madison Square Mall after eating lunch in a nearly empty food court, Madison resident Bo Williams reflected on the prime piece of real estate that he once considered a destination.
Williams, who worked at a computer store at Madison Square during college in the late ’80s, pointed out vacant storefronts and fondly remembered former mall tenants that have closed or moved.
Through the ’90s, Williams was drawn to the shopping development for work, to buy music and to hang out with friends. Now, the technical writer can’t recall whether he has ever taken his two young children here.
“This once felt like a destination, a place to come that was worth getting out just to come here,” he said. “At Christmas time, there was an orchestra downstairs. That’s how festive it was all the time. This is what social media was when I was a teenager.”
Belk moving to Bridge Street
Owned by Chattanooga-based CBL & Associates Properties, Madison Square Mall is at a crossroads. With the impending departure of one of its four anchor stores next year, the future of the Rocket City’s biggest enclosed shopping center is uncertain.
When Belk announced last fall that it would close its Madison Square location to open a$20 million, two-level, 170,000-square-foot store at Bridge Street, many Huntsville residents wondered why the city agreed to spend $4 million on public infrastructure upgrades on a new Belk site away from Madison Square.
Although negotiations progressed to keep Belk at the mall, the department store was determined to make a move because its Madison Square location had experienced declining sales to a point that it would be “unprofitable for them” to continue operating there, Mayor Tommy Battle told The Huntsville Times/AL.com in October.
The city’s focus turned on keeping Belk’s sales-tax dollars in Huntsville after the retailer told officials that it had three locations in mind for a new flagship store: Bridge Street, Decatur Mall or along Interstate 565 in the Madison area.
“We really wanted to make sure Huntsville maintained two Belk locations,” said Huntsville Director of Economic Development Michelle Jordan. “We don’t want Madison Square Mall to suffer. Lots of residents expressed their desire for a new retailer. We’re still working to figure out how to attract a retailer that is not already in the market.”
A regional ‘Super Mall’
The “Super Mall” opened at the edge of the city to great fanfare and massive traffic jams in August 1984. Anchored by Belk, JCPenney, Dillard’s Clearance Center and Sears, Madison Square currently spans more than 929,000 square feet on the corner of University Drive (U.S. 72) and Research Park Boulevard.
Over time, some of the mall’s anchors have undergone changes. Madison Square general manager Joe Black said Blach’s, one of the mall’s junior anchors when it opened, closed in 1987. Pizitz, another original Madison Square anchor, was acquired by McRae’s in Jackson, Miss. in 1988 and was renamed as such until Belk later bought out McRae’s.
Black said Castner Knott was acquired by Dillard’s in 1998. Madison Square’s junior anchor Yielding closed its Madison Square location around 1993. Belk purchased Parisian in 2007 and moved its store from the former McRae’s space to a larger former Parisian parcel.
The former McRae’s space remains vacant today, Black said. In 2011, the Dillard’s department store was converted to a clearance center.
Don Beck of The Shopping Center Group in Huntsville said the mall drew shoppers from across North Alabama and parts of southern Tennessee.
“CBL was pretty visionary in choosing a location near the main gate of the Redstone Arsenal and Cummings Research Park that was on the western edge of Huntsville,” he said. “… When CBL first opened the mall back in the 1980s, it really changed the dynamic of Huntsville and brought a large alternative to the western side of town.
“It really became the retail focal point of North Alabama.”
But the city edge has moved further west. Parkway City was remade as Parkway Place. New malls and shopping centers cropped up. Retail developments have lifespans, and as consumer preferences change, developers must adapt.
Since its inception, Madison Square has been renovated twice, in 1994, and again in 2006, with a total expenditure of almost $25 million, Black said. The 1994 renovation involved the removal of two fountains and replacement of skylights, as well as upgrades to the three main mall entrances, flooring, interior and restrooms.
Twelve years later, developers again updated the mall’s entrances, added new tile, replaced skylights, repainted the interior and added custom finish to columns within the facility. Soft-seating areas, expanded bathrooms and an oversized elevator at the center court were added.
Despite the renovations, Huntsville commercial realtor Scott McLain said Madison Square, which hired a consultant last year to examine options for the mall’s future, hasn’t done “a particularly great job of reinventing itself periodically.”
“When you don’t reinvent a retail space periodically, you incur the loss of the enthusiasm from the customer,” he said. “There’s where Madison Square Mall finds itself. Once this trend starts, it takes a mammoth effort to turn it around and that turning around is fitfully created with new tenants, renovated spaces, additions and such – all of which are very expensive at a time when the mall is not producing as much money.”
Ideas to save the mall
A “SAVE Madison Square Mall” page on Facebook, which bills itself as a “public forum for ideas to revamp” the shopping center, shows old photos of the mall, including the 1984 grand opening where people lined up to ride the escalator.
The page was started in response to Belk’s announcement last year that it was moving to Bridge Street and the fact that numerous dining establishments and retail stores have abandoned the 29-year-old mall over the years.
One idea on the site for revitalizing Madison Square includes creating a new main mall entrance with ramp access from Research Park Boulevard to encourage friendly competition between Bridge Street and the mall.
Another idea would involve clear cutting the trees along Research Park Boulevard for better mall visibility and to build an attractive stone-retaining wall with new Madison Square signage and better landscaping around a granite water fountain.
The page also suggests expanding the size of each department store, building new parking decks, updating the mall’s exterior and demolishing the current movie theater to make way for a new main entrance and to reconstruct a more modern theater on another location of the mall’s property.
The trend toward mixed-used developments and outdoor malls that resemble downtown shopping districts has posed challenges to enclosed shopping centers across the Southeast, including Madison Square, which has an 87.8 percent occupancy rate.
“Over the years, we have seen alternative uses for traditional mall space, including hotels, offices, medical facilities and residential space,” said Black. “Available anchor space offers opportunities for large space users, such as Costco or Target, or even a restaurant district or entertainment component and even a wine bar.”
McLain said the fact that most of Madison Square’s anchor tenants own their space has been difficult for CBL as it considers future options for the mall.
“When anchor tenants buy those spaces, it allows the developer enough cash flow to develop a project,” he said. “On the front end, it’s expedient and useful, but then when they’re trying to change things, it’s a limitation because you don’t control all the space.”
Black said it’s not uncommon in malls for anchor tenants to either lease or own their spaces. As CBL considers future options, Black said the mall will continue working with its retail partners “to achieve purposeful solutions.”
Black said CBL’s other Huntsville mall, Parkway Place, remains a popular destination with a consistently solid sales performance and loyal customer base. Beck called CBL and Madison Square Mall “a victim of their own success.”
“As nice of a job and as nice of a center as Parkway Place Mall is today, it has captured a lot of the retail demand for south Huntsville,” he said. “In some ways, they did such a nice job with Parkway Place Mall that they cut off to some degree the south Huntsville folks needing to go out to Madison Square.”
Beck said Madison Square began having issues when Walmart opened a supercenter on University Drive on the other side of Research Park Boulevard. When the big-box retailer proved to be successful, Beck said retailers became more comfortable moving farther west, which sparked the development of the Westside Center.
“Couple that with the last five or seven years and you then get Bridge Street,” Beck said. “Bridge Street showed up and started getting the upper end of the market with their offerings that were new to Huntsville … and Westside Center had your typical power-center retailers that have been competing with malls for the last 15 to 20 years.”
A retail power center is a shopping development with several dominant anchor or big-box retailers, as well as smaller tenants.
Online shopping, another threat to malls, makes up about 5.2 percent of retail profits in the U.S., according to figures by the Alabama Retail Association. Experts predict Internet shopping, which brought in $225 billion to the U.S. last year, will account for up to 9 percent of total U.S. retail revenue by 2016.
Despite the steady increase in online shopping, Black said it does not replace the experiences that brick-and-mortar shopping centers offer.
“The key is to find ways to coexist for the benefit of the consumer,” he said. “Many stores have capabilities of showing options online from their selling locations. The advancement of texting and geo-targeting also offer consumers instant information on store values while actually shopping at the malls.”
Location is still great
Although CBL officials aren’t ready to make an announcement about the mall’s future, Huntsville’s Director of Urban Development Shane Davis said the location is still one of the best in Madison County.
“The property is in the heart of a very active retail corridor and at the corner of two major roadway corridors of U.S. 72 and Research Park Boulevard,” he said. “I believe it has great potential to be the site of a destination type retailer or maybe even a mixed-use development, given the proximity to Research Park and Redstone Arsenal.”
Huntsville Councilman Will Culver, whose district includes Madison Square Mall, said the space is ideal for offices.
“Huntsville doesn’t have enough office space,” he said. “That’s not to say that the mall can’t be resuscitated. There are so many things that can be done with it, but we’re working with CBL and other individuals to try to help them in any way we can. We certainly don’t want it to become an eyesore.”
McLain said Madison Square’s proximity to Cummings Research Park could open doors for alternative uses, such as an amphitheater on the back side, or for offices, multi-family housing or a mixed-use development.
Mayor Battle has had several meetings with CBL’s leaders. Jordan in Huntsville said CBL has been open with the city about the challenges Madison Square faces.
“North Alabama residents would be hurt, employees of the existing tenants at Madison Square would be hurt and the city of Huntsville would be hurt if the mall were to die,” she said. “Since the city does not have ownership of the mall, our hands are tied regarding the operation of the mall, but the current administration has been, and will continue to be, a strong advocate for redevelopment and reinvestment at the mall.”
George Osborne, owner of Teddy Bear Factory, invested about $125,000 in his startup business, which opened in May near the mall’s food court. A week ago, Osborne packed up his store and left because he was not making enough profit.
“Last Sunday, I pulled everything out,” he said. “I had too many days of no sales and could not afford the rent, plus my products were running low and I just had to go. We had too many days of just sitting there looking out the window and seeing nobody, literally, in the mall.”
Osborne, who said he likes the mall but hasn’t produced the revenues he thought he would, doesn’t have immediate plans to reopen the store, but will donate some of his leftover merchandise to Huntsville Hospital.
“The mall is still trying to negotiate with me to consider reopening within the mall again, but to be honest, I do not have the money right now to go and buy new product and begin again right this minute,” he said. “I first have to recuperate from all this time lost sitting over there at the mall.”
Send Lucy Berry an email at email@example.com.
Original article appeared here