Business

What's next for Lindale Mall? New stores are moving in

In a changing retail world, Cedar Rapids' northeast mall has plans

The former Four Seasons (left) will soon house a seasonal haunted escape room, NeverMoor. Four Seasons moved to a smaller location in the mall. Photographed at Lindale Mall in Cedar Rapids on Monday, June 24, 2019. (Liz Martin/The Gazette)
The former Four Seasons (left) will soon house a seasonal haunted escape room, NeverMoor. Four Seasons moved to a smaller location in the mall. Photographed at Lindale Mall in Cedar Rapids on Monday, June 24, 2019. (Liz Martin/The Gazette)
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CEDAR RAPIDS — Like a duck, calm on the surface and paddling underneath, the plain exteriors of Lindale Mall’s former Younkers and Sears stores mask ongoing efforts to revitalize those vacant spaces, plus the shopping center they bookend.

A yet-to-be-disclosed retailer has signed a letter of intent to take over the Younkers space, which shut its doors in August 2018 after the liquidation of parent company Bon-Ton Stores earlier that year.

And a new buyer soon might acquire the vacant Sears property, which is up for sale and could be subdivided into smaller spaces for multiple tenants.

As plans progress for two of the center’s three anchor store spaces, Lindale representatives say they’ve introduced multiple other changes at the mall this year, geared toward transforming the 59-year-old mall into more of a modern “community center.”

Lindale’s new approach comes as retail and shopping center experts point to a changing landscape for malls nationwide, in which customers are looking as much for an experience and entertainment as they are for merchandise, if not more so.

On the ground floor

Inside Lindale Mall, at Collins Road and First Avenue NE, the specific makeup of businesses, and how many there are at any given time, continues to evolve.

Several local businesses, including Rollipop Rolled Ice Cream, coffee shop Java Jack and Midwest Airbrushing, opened earlier this year, in January, April and May, respectively.

Jack Hur, who owns both Rollipop and Java Jack, said he decided to locate in Lindale as the “last standing (enclosed) mall” in Cedar Rapids, and one where he could replace previous ice cream and coffee stores that closed.

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Hur said his businesses have experienced “ups and downs” since opening, corresponding with how many mall patrons there are at any given time — “When it’s busy, we’re busy, for sure.”

With locally sourced ingredients and a focus on customer service, Hur said Rollipop and Java Jack aim to create returning customers both for themselves and the mall in general.

“One of the reasons I opened up Java Jack (in addition to Rollipop) was that I really wanted to strive for success at the mall,” he said. “Tenants will be kind of scared away if they see vacant spots — but if we fill those spaces up, more people will come. That’s what I’m hoping for as owner.”

Some of those spots won’t remain vacant much longer.

Clothing store Y-Fashion is scheduled to open Monday in the spot that until this year held Payless ShoeSource. Your CBD Store, a cannabidiol health products seller, is set to move in to the former Rogers Jewelers space July 11.

Island Secret Catering, a new soul food restaurant, is slated to open July 28 in the mall’s food court, next to Maid-Rite.

And NeverMoor, a haunted house-esque escape room concept, has plans to take over the 10,000-square-foot former home of Four Seasons, in September as a temporary tenant. Four Seasons moved elsewhere within the mall.

Gazette reporters in June identified 63 open businesses and 13 vacancies in and around Lindale Mall.

Washington Prime Group, which owns the majority of Lindale, listed a 93.1 percent occupancy rate for the mall at the end of 2018, compared to a 94.3 percent occupancy rate at the end of 2017, according to annual reports filed with the U.S. Securities and Exchange Commission.

In its latest quarterly report, filed in April, the company listed a 93.3 percent occupancy rate across its portfolio of tier one and open-air shopping centers nationwide.

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“What we’re trying to do at Lindale is reinvent the wheel and have businesses come in for every type of customer, that maybe wouldn’t have been here five years ago,” said Becky Eckley, general manager for Lindale, who works to lease mall spaces to a mixture of permanent and temporary tenants.

Of Lindale’s total 723,666 square feet, the Younkers and Sears closures opened up 246,000 square feet, or about one-third of the mall’s leasable space.

Eckley confirmed a new retailer has signed a letter of intent for the 100,000-square-foot Younkers space. Lia Pontarelli, Lindale’s marketing director, said mall representatives had worked to fill the box store since they learned the Younkers — one of the mall’s three original anchor stores dating back to 1960 — would close, and currently are “waiting for a signature on the dotted line” of a lease.

Columbus, Ohio-based Washington Prime Group is in “active planning and negotiations to transform the former Younkers space,” said Kim Green, the company’s vice president of investor relations, in an email.

Though Green did not specify a dollar figure, company filings show Washington Prime Group expects to spend between $100 million and $125 million on “significant redevelopment and expansion” projects at its properties in 2019, with $300 million to $350 million budgeted to revamp 29 vacant or soon-to-be vacant department stores nationwide over the next three to five years.

“The redevelopment opportunity at Lindale Mall demonstrates our commitment to the community, while illustrating our mandate to diversify tenancy, elevate the shopper experience and strengthen Lindale Mall as the dominant town center within the area,” she said. “We are excited about the project and will announce details in the future.”

In the meantime, Pontarelli said, Lindale representatives have not let the vacant Younkers gather dust. Spirit Halloween sold costumes and decorations out of the building last fall, and Cassill Motors set up an indoor showroom there from Black Friday through the end of the year.

On the other side of the mall, the former Sears property — owned by Seritage Growth Properties of New York City — is listed for sale online through Cushman and Wakefield Iowa Commercial Advisors. A schematic shows a buyer could subdivide the building into up to nine spaces for smaller tenants.

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Though a Seritage representative declined to comment, the company said in its federal filings that it aims to re-lease existing space it owns nationwide to “diversified, non-Sears tenants,” with a focus on “growing national retailers.”

“As we lease space to such retailers, we aim to create multi-tenant shopping centers that command superior rents and valuations due to their prime locations, synergies with adjoining retailers and proximity to productive malls and shopping centers,” Seritage said in its annual 2018 report.

One such tenant could be Planet Fitness, which Seritage listed in the annual report as a lone “significant tenant” for the former Lindale Sears building. Filed in March, the report included leases signed but not yet open as of the end of 2018, with 126,100 square feet of the 146,000-square-foot former Sears classified as “not leased” and the remaining 19,900 square feet as “diversified.”

Planet Fitness, which did not return a request for comment, typically opens 20,000-square-foot fitness centers, its website says.

Company filings show Planet Fitness had 1,806 stores across North America as of March 31 and commitments to open more than 1,000 new stores under existing area development agreements, including more than 500 stores over the next three years.

Washington Prime Group has had discussions with Seritage over potentially purchasing the former Sears property, Eckley said. She noted that, though she could not speak for the company, she believes the move could be beneficial.

“If we could acquire that property, we’d have more say on the tenants we’d put in there,” she said.

City property records show an assessed value of $4.53 million for the former Sears property as of Jan. 1.

On the right track

New retail offerings aren’t the only developments taking place at Lindale Mall.

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Starting this year, Lindale representatives have put a “very strong emphasis” on holding free community events, aiming to turn the mall into more of a “community center,” Pontarelli said.

In early June, the mall held a summer kickoff block party in its parking lot off First Avenue NE, with food trucks and vendors, face painting and a rock climbing wall.

Such gatherings are planned to continue into this year, with a “Christmas in July” event scheduled for July 13 and a “Boo ’N’ Brew” event planned later this fall.

“Hopefully then, while they’re here, they go shopping and their love for the mall is revitalized,” Pontarelli said.

Lindale representatives also made investments in the mall’s food court between March and April, installing a new projector system to screen sporting events and movies, plus “The Yard,” featuring games such as Jenga and Connect Four for younger visitors.

Those events and investments are an indicator that Lindale is on the right track, said some retail and real estate experts.

“Retail’s not dying, retail’s changing,” said Josh Seamans, vice president of Cushman and Wakefield Iowa Commercial Advisors. “It’s the Dave and Buster’s of the world, the movie theaters ... . It’s more of that environment that malls are evolving to.”

Beyond entertainment, Seamans said he sees shopping centers attracting future tenants that “don’t really compete with the online customer,” naming furniture stores and discount retailers as examples.

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In general, shoppers are “not very patient people anymore” and visit malls that serve as “lifestyle centers,” with integrated features such as movie theaters and restaurants, said Nancy Abram, associate professor of marketing at the University of Iowa.

“I think people are more interested in experiences than they are in acquiring more stuff,” she said. “I think there’s a tide changing with people having an interest in sustainability, and there’s just a heightened awareness or people are becoming more woke about the fact that they just don’t need one more T-shirt.”

More than 7,000 retail stores are on track to close by year’s end, up from a reported 5,528 closings in 2018, according to Coresight Research, a global marketing research firm.

More than a dozen national retailers, including Sears, Bon-Ton Stores and Mattress Firm, filed for bankruptcy protection in 2018, with upward of 20 retailers, including Toys ‘R’ Us and Gymboree, filing in 2017, per CNBC reports.

Cedar Rapids city officials keep in touch with Lindale representatives and assist in making sure the mall is “on the radar” of retailers seeking to grow, said Jasmine Almoayyed, the city’s economic development manager — “Put us (Cedar Rapids) in your three- to five-year expansion plans.”

One challenge Almoayyed noted is that some retailers only will open new locations with a minimum number of people living within a certain radius — 284,204 people live within 20 miles of Lindale, its promotional materials show. But she said this can open the door for local entrepreneurs to start up comparable businesses in place of the larger companies.

A ‘bright’ future

There have and always will be changes in tenants at malls, explained Stephanie Cegielski, spokeswoman for the International Council of Shopping Centers. She said her group’s data shows all age groups still shop at the mall at least once a month.

Members of Generation Z in particular are an indicator that “the future of brick-and-mortar shopping is bright,” Cegielski said.

A September survey from the council found that Generation Z members made an average 8.6 trips to the mall in a three-month period. Sixty-seven percent of those surveyed said, in five years, they still expect to make most of their purchases in physical stores.

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In a separate survey, the council found that entertainment (61 percent of respondents) and dining (53 percent) are the primary drivers for customers to visit brick-and-mortar locations.

“Successful centers are always adjusting to the changing needs of their unique communities — what works for one center might not work for another,” Cegielski said. “Overall, malls in the U.S. are adapting successfully, as indicated by the net number of malls the past five years. ... More malls have opened than closed.”

One key driver behind the changing nature of malls is that modern customers have significantly more access to different retail options, said Mark Mathews, vice president of research development and industry analysis with the National Retail Federation.

“Historically mall operators have always gone out to attract anchor stores that would bring in foot traffic. I think that dynamic is shifting, to be honest,” Mathews said. “Every kid’s got an iPhone and you’re able to access brands and retails in a way that you never have been able to before. That makes it a more competitive industry, but it gives new retailers a potential leg up.”

Gazette reporter Kayli Reese contributed to this article.

• Comments: (319) 398-8366; thomas.friestad@thegazette.com

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