Business

After Sears and Younkers closures, what happens to Lindale Mall?

The mall will lose two anchors that have been there since it opened

Younkers store at Lindale Mall in northeast Cedar Rapids, Iowa, on Wednesday, April 25, 2018. (Jim Slosiarek/The Gazette)
Younkers store at Lindale Mall in northeast Cedar Rapids, Iowa, on Wednesday, April 25, 2018. (Jim Slosiarek/The Gazette)
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CEDAR RAPIDS — For the first time in its almost 60-year history, Lindale Mall will be without a Younkers or Sears store when both close later this year.

They were two of the three original anchor stores for the mall when it opened as Lindale Plaza in 1960. (Killian’s was the third.)

The anchors stayed with the mall through multiple redevelopments, including Lindale’s change to an enclosed shopping center in 1980. No longer, though.

The parent companies of both have announced in recent weeks that they will shutter the stores sometime later this year. Sears, the last one in the Corridor, will close in mid-July as property owner Seritage Growth Properties takes over the building.

The Lindale Younkers will close within the next 10 to 12 weeks — putting a closure in late June or early July — as a result of the liquidation of its parent, the Bon-Ton Stores Inc.

The two closures will result in about 150 people losing their jobs. That also will mean Lindale will have about 246,000 square feet — about one-third of its leasable space — to fill by midyear, unless new tenants are announced before then.

It is not clear what will replace the two Lindale anchor stores.

Lindale will “continue to focus on providing a dynamic experience for our guests with a mix of retail and dining options, as well as family-friendly events and activities,” General Manager Kerry Sanders said in an emailed statement.

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“When there is a store closing, it provides an opportunity for us to introduce new brands to our guests, and we will work closely with all our stakeholders on potential redevelopment opportunities.”

Seritage Growth Partners, which owns the 146,000-square-foot Sears building, did not respond when asked about its plans for the Sears space. Earlier this month, though, the company said it would consider redeveloping the building.

“In keeping with Seritage’s business strategy, we are excited by the redevelopment potential of this property and look forward to sharing more detailed plans in the future,” Seritage said in an April 13 emailed statement.

OPPORTUNITY ‘TO REPOSITION THE MALL’

The loss of both stores likely will require Lindale owner Washington Prime Group and Seritage Growth Properties to redevelop the Younkers and Sears buildings into space for smaller tenants, local real estate experts said. While Lindale could try to land a single department store tenant to fill the space, the decline of traditional big-box stores makes that unlikely, the real estate experts said.

“No. 1, they’ll try to find a replacement anchor to take the whole space. No. 2, they’ll figure out if they can reconfigure the existing space, demise it and open it up to multiple tenants to occupy the space,” said Scott Byers, a commercial broker with Pivot Real Estate in Hiawatha.

“Three, if that doesn’t work, then they’ll (demolish) and restructure those two barbell ends of the mall.”

Property listings for the Sears store — including one on Seritage’s own website — market it as being suitable for multiple future tenants.

“It's not that people are spending less money, people are just shifting the way they shop. The department store itself has probably struggled disproportionately."

- Nancy Abram, associate professor of marketing at the University of Iowa

Cedar Rapids’ Economic Development Manager Jasmine Almoayed said city staff will meet with Washington Prime officials in coming weeks to discuss the mall. She also is preparing to attend RECON, a retail industry convention, which she said will allow the city to market properties around town and meet prospective retailers for Cedar Rapids.

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RECON is a three-day event put on by the International Council of Shopping Centers in Las Vegas with about 37,000 attendees and 1,200 exhibitors, such as real estate investment groups, retailers, restaurant groups and shopping mall owners, according to its website.

STILL A PRIME LOCATION

Even with the loss of the heritage stores, Byers and others said they don’t see it as cause for alarm for Lindale.

“I’m not ready to send out the warning signals or anything like that. I think it opens opportunity for them to reposition the mall. ... I see it as an opportunity for them to carve it up into smaller spaces potentially and a good mix of types of uses, including entertainment,” said Josh Seamans, retail specialist with GibbsLambDrown in Cedar Rapids.

Seamans pointed to Merle Hay Mall in Des Moines. A redevelopment at the mall resulted in multiple exterior entrances for some stores and the addition of Flix Brewhouse, a movie theater mixed with a brewery and restaurant.

“It’s going to take an investment to get there, but I think at the end of the day, five years down the road you see a much more vibrant Lindale Mall as a result of this,” Seamans said.

The area around Lindale still is a prime location for retail in Cedar Rapids, Almoayed said.

“The amount of daytime traffic that’s around there, the amount of traffic that’s on Collins Road, the amount of other retail and entertainment and restaurants that surround that area, that really is at the moment and probably for the foreseeable future, the primary retail center for Cedar Rapids,” Almoayed said.

Byers agreed the area around Lindale, at the corner of Highway 100/Collins Road NE and First Ave. East, will stay as Cedar Rapids’ main retail hub.

“Whenever there is a tenant looking to enter the Cedar Rapids market, they absolutely say ‘find me something as close to the corner of First and Highway 100 as you can,’” Byers said.

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‘SHIFTING THE WAY THEY SHOP’

Sears and Younkers are casualties of the downfall of multiple big retail chains. As companies such as Bon-Ton, Sears Holdings and Toys “R” Us declare bankruptcy or shutter stores, they will leave many malls with vacant department store spaces.

“It’s not that people are spending less money, people are just shifting the way they shop. The department store itself has probably struggled disproportionately because they don’t have unique goods and there’s been a big growth in discounters,” said Nancy Abram, an associate professor of marketing at the University of Iowa who specializes in retail.

Shoppers are buying more items online or at discount stores, such as TJ Maxx and Kohl’s, Plus, fewer people want to spend hours walking around a mall unless they also can get a bite to eat, see a movie or access some other type of entertainment, she said.

“They don’t want to walk into the time drain of the mall. I want to pull up to a TJ Maxx, I want to go in there, I want to get a dress for a wedding tomorrow and I’m done. I don’t want to wander around the mall, which people used to do that as a pastime,” Abram said.

In response, former department store space will need to incorporate more than just big-box retail, she said.

“People are still spending money and getting goods, consumer confidence is fairly high right now. This brick-and-mortar space has to be repurposed. For 20 or 30 years or more we’ve seen a growth in consumer demand for services, connectivity and experiences, more so than our growth for things.”

l Comments: (319) 398-8366; matthew.patane@thegazette.com

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