In an environment where visits to malls nationally fell from 35 million in 2010 to 17 million in 2013, are two of Roanoke’s three major malls a positive outlier bucking the national trend? Or, like so many national developments that arrive here late, are they just not sick yet? Here’s a look.
It’s the Friday before Christmas Sunday—one of the busiest and most frantic shopping days of the year—and I’m driving into the belly of the beast on a mission to visit the places many seek to avoid on a day like this: Roanoke’s three shopping malls.
First stop: Valley View Mall, which greets shoppers with all the holiday trimmings, trappings and—immediately after exiting off Interstate 581—the traffic. I steer away from the jam-packed District and seek more plentiful parking on the backside of the mall. Inside, a mechanized bear orchestra entertains families eating lunch in the food court, and the line to see Santa Claus runs at least 50 deep. People carrying multiple bags walk in multi-file lanes, and turning left to enter a shop requires a healthy dose of patience. Lengthy lines snake from registers across stores and occasionally out the door into the mall.
After a wait through similarly long lines of traffic to exit the mall area, I drive south to Towers Shopping Center and find a similarly packed parking lot. It turns out the only place more crowded than a destination shopping mall is a grocery store; the parking lots in front of Kroger and Fresh Market smell like desperation as motorists relentlessly roam the concrete lot in search of an empty space. Inside, an array of locally owned businesses do brisk business with customers in search of last-minute gifts.
After the hectic feel of Valley View and Towers, I’m relieved to reach the relative tranquility of Tanglewood Mall. Relief quickly turns to melancholy, however, at the sight of the mall’s interior. My memories of the mall’s heyday in the late ’80s, when as a pre-pubescent just discovering popular music I saved up allowance money for monthly trips to the Record Bar, quickly erode and give way to lonely modern reality, with the majority of interior retail spaces shuttered. A multi-storefront display showcases the mall’s vibrant history, but that tribute to the past is surrounded by empty spaces and a significant amount of room for Miller-Motte Technical College.
Shopping malls arrived in Roanoke beginning with Crossroads Mall in 1961 and Towers a year later. The mall formula—destination stores surrounded by acres of parking lots—transformed not just the way people bought things, but mirrored a nationwide shift from downtowns to the suburbs. When it opened in 1973, Tanglewood Mall set a new standard, offering as much gross leasable area as its two predecessors combined.
The disruptive effect of Valley View Mall’s opening in 1985, however, illustrates how quickly the retail world can change. Located conveniently close to Interstate 81 and built with 887,000 square feet of gross leasable area, Valley View began its life as a bigger and newer alternative to Tanglewood Mall, 12 years old by the time its younger sibling opened.
Commercial realtor Dennis Cronk says Valley View signaled the arrival of the “regional mall,” with new-to-Roanoke national retailers that stood out from the “neighborhood mall” model that Crossroads, Towers and Tanglewood had employed.
Reinvention is increasingly important to survival in the cutthroat world of retail. That’s even more true in 2017 than it was in 1985. Proliferation of “big box” department chains like Walmart rattled the shopping-mall model. The arrival of the internet and rapid growth of massive online retailers such as Amazon heralded even more transformative change. In 2016, online sales in the United States were projected to total about $394 billion, according to research and advisory firm Forrester Research. That still represents only about 12 percent of total retail sales, but non-store sales, which include online commerce, are growing much faster than, and clearly cutting into, traditional sales.
Add in the ongoing challenge of maintaining and upgrading buildings that are more than 30 years old—and in some cases a half-century or more—and the national decline of malls becomes more understandable. According to real-estate firm Cushman and Wakefield, visits from malls fell from 35 million in 2010 to 17 million in 2013. Anchor chains like Macy’s and Sears have closed dozens of stores around the country, which in turn has affected smaller chains like Gap and Abercrombie & Fitch.
Those closures can result in a cascading reaction that threatens the viability of malls. Once a mall’s vacancy rate begins to climb, it’s tough to reverse the process, especially if the space has become outdated. According to real estate researcher Reis Inc., vacancy rates in shopping centers increased in 30 of 77 U.S. metro areas last year, up from 24 in 2015 and 19 in 2014. As a mall sheds retailers, it loses customers as well. Lose enough, and it’s game over: Retail analyst Jan Kniffen predicted last year that a third of all malls in the U.S. will close in coming years.
So far, that’s not happened in Roanoke, but the national factors killing malls have put pressure on the firms that own them.
“Since the recession, property owners and brokers like myself are having to get more creative,” says John Nielsen of Cushman & Wakefield/Thalhimer. “You don’t want to go down that one thought process of just true main retail. It can be entertainment or fitness or something that’s not necessarily pure retail—just something that’s going to add some value by becoming a traffic generator or by increasing the radius of the draw for your consumers.”
Tanglewood: Mall in transition
In September 2016, Tanglewood Mall sold to Alabama-based Blackwater Resources for $22.7 million. That sounds like a hefty price tag, unless you compare it to the last time it sold, in 2000 for $38.7 million at a foreclosure auction. That 16-year devaluation, accompanied by a drop in the number of retailers located in the interior, demonstrates the challenges facing 20th-century malls in a 21st-century world.
Tanglewood Mall was Roanoke’s most prominent retail location from 1973 until Valley View opened. Tanglewood sits on Electric Road (419)—the busiest corridor in Roanoke County—but its secondary status to Valley View and location on the other side of Roanoke from Interstate 81 curtailed its status as a retail destination. When Valley View opened in the mid-’80s, Tanglewood was home to 120 national or regional retailers. By 1995 the number of listed stores fell to 91, and by 2015 had dropped to just 45.
However, Blackwater Resources President John Abernathy sees plenty of potential in the 44-year-old shopping center. Its location at the intersection of the U.S. 220 extension of I-581, U.S. 220 and Electric Road makes it attractive, as does its 58-acre footprint. And although many of the small, 1,000-square-foot spaces inside the mall sit vacant, Abernathy says there’s actually lots of demand for space.
“People want 5,000, 10,000, 20,000 square-foot spaces, and we don’t have them,” Abernathy says. “A lot of retailers that maybe wouldn’t go in the interior mall but would go elsewhere, they have nowhere to go. We’re having to refer people elsewhere.”
Blackwater Resources’ challenge, then, will be to revitalize, renovate or reinvent the mall’s interior. The company is still figuring out the best way to do that, but Abernathy suggested looking to another one of its properties, the Centre of Tallahassee in Florida, as a possible model. The project redeveloped the 95-acre Tallahassee Mall by tearing down its middle and replacing it with an amphitheater. It reworked the food court and brought in new restaurants to support the anchor tenants: Belk, Barnes & Noble, Ross, Shoe Carnival, Burlington Coat and AMC 20 Theater.