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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.
Julianne Rainone
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.
“We don’t have an arena proposed for Tanglewood, but certainly a teardown in the future is a possibility among other things,” Abernathy says. “The right mix on an older mall brings traffic back. Often it becomes entertainment-oriented, or it could be office, school, medical, restaurants—whatever brings the traffic back to the location. It could be turning it inside out a little bit, to get a little more green area. We can keep portions of the inside or not. It’s really what the market dictates.”
Roanoke County stands to give Tanglewood’s new owner a helping hand, too, as the county government is conducting an urban development study on the area where 419 and 220 meet. As part of its comprehensive plan, the county is considering changes to improve traffic flow and increase commercial density to make the area more of a town center and boost prosperity (and thus tax revenue).
That should give Blackwater more flexibility with its plans for Tanglewood, which gives the mall a better chance for a new life.
Towers Shopping Center — A study in evolution
If Tanglewood needs inspiration, it need only look down Colonial Avenue to see Towers Shopping Center.
Opening just a year after Crossroads, Towers is Roanoke’s oldest mall that’s still functioning as a mall. Unlike its larger counterparts, its tenant mix has consisted largely of homegrown shops such as the A Little Bit Hippy, Ram’s Head Book Shop and the Roanoke Coin Exchange. Over the years, its fortunes have ebbed and flowed, including hard times just a decade ago.
“When we first began working on that particular property, it had some vacancy issues,” says Nielsen, who held the listing on the property at Cushman & Wakefield/Thalhimer during the late ’00s. “One thing you never like to see is large blocks of vacancy.”
Working out of that funk took several years and a piece-by-piece process of attracting businesses.
“The initial catalyst occurred when we were able to bring in Planet Fitness on that lower level,” Nielsen says. “That fitness center was the catalyst because it was able to bring in additional consumers and additional traffic that weren’t necessarily visiting that shopping center previously.”
One of Towers’ biggest assets is its location: It’s just off I-581/U.S. 220, convenient to Old Southwest, South Roanoke and southwest Roanoke County. It’s built success largely through tenants that serve daily-use needs of the residents in those neighborhoods: Kroger, Fresh Market, Virginia ABC and PetCo. Roanoke’s first Chipotle restaurant opened in 2011 in a Towers outparcel and remains a popular destination today. These anchors complement a variety of homegrown shops and restaurants that uphold Towers’ long tradition of working with local business owners.
“We believe the strength of our shopping centers is going to come from those local shops, those mom-and-pops,” says Jarnell Bonds, vice president of marketing for Rappaport, which currently owns Towers. “We do have national retailers but the majority you’ll see are local. We like to help them evolve and develop their space as they meet their market more.”
A case in point would be Present Thyme, which sells furniture, antiques and other home decor. Since Present Thyme opened at Towers in 1995, it’s occupied several different spaces within the mall, eventually growing large enough to merit its own building.
Rappaport also spent $2 million to improve the mall’s lighting, replace escalators with an elevator and new staircase, add free WiFi service and make the building ADA-compliant.
“You go through the life of these properties and there are going to be those ebbs and flows,” says Nielsen. “Those ebbs and flows can be created by bigger economic trends, or it can be something more tangible with the given ownership of the property and how they’re taking care of their asset.”
With its newly renovated interior and a mix of stores that attract both neighborhood and destination customers, Towers is showing how even a more than 50-year-old mall can continue to see success.
Valley View Mall — The regional hub
Meanwhile, Valley View Mall continues to set the standard as Roanoke’s premier collection of destination retailers. At age 32, it continues to adapt to a changing marketplace through creative thinking and regular reinvention.
CBL & Associates Properties owns the core of the mall, but the outparcels around it—everything from Walmart and Olive Garden to anchor department stores attached to the mall—are owned by third parties, which not only relieves the burden of maintenance but also gives more flexibility to businesses to reshape their spaces as needed.
Mall management also partnered with government to improve the flow of traffic, including the incorporation of an alternate pattern during the holidays. After years of construction to build out and rework a partial intersection with I-581, the nearly $64 million Valley View Diamond Interchange opened late in 2016. The built-out interchange provides an additional entrance and exit from the interstate, as well as potential access to developable open space on the west side of I-581.
Additionally, the mall’s management has been willing to shake things up. It redeveloped a portion of the parking lot and mall near the JCPenney and Sears entrances into what’s now known as the District at Valley View. The District, which includes Barnes & Noble, clothing retailers and restaurants such as Carrabba’s Italian Grill and Abuelo’s Mexican Food Embassy, is an example of Valley View’s dedication to providing “an experience for our customers—a place where they can gather with friends and family to shop, dine or be entertained,” says Valley View Mall Manager Louise Dudley.
Cronk is bullish on the mall’s longterm future: “I think Valley View will always be successful, primarily because of the market. Valley View made Tanglewood and Crossroads reinvent themselves. No one’s going to come in and create something that will make Valley View reinvent itself. Something with a national impact would have to happen to affect them.”
Of course, something with a national impact is happening—the continuing shift from physical stores to online retailers. Dudley, however, says she doesn’t see online as the enemy of bricks and mortar.
“Retailers that get it know that a physical store location can build brand loyalty and increase spending both in-store and online—the two really need each other,” Dudley says. “Mall owners are looking to provide the in-mall infrastructure needed to support retailers’ omni-channel efforts.”
That’s included a recent redesign of the mall’s website to make it easier to access on a mobile phone, she says. And sure enough, during my visit, I checked the web via smartphone a couple of times: Once to look at the mall’s directory to find a particular store, and again to price check an item, which I eventually bought in-store.
Valley View looks entrenched as the alpha mall in Roanoke, with Towers finding success by diversifying its tenants to reach a range of new customers. Tanglewood has struggled in recent years, but with a new owner planning substantial physical changes, there’s reason for optimism on Electric Road.
The continuing growth in online buying—and a related sag in brick-and-mortar sales—looms over the Roanoke Valley as it does elsewhere. But while other cities have seen widespread mall closures, creative management and ongoing investment have allowed Roanoke’s malls not only to survive, but to thrive. Well, two out of three of them, anyway.
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