Anchor tenants are leaving, and vacancies are high. Yet mall managers are trying to put a good face on the matter and insist their vacancy problems are only temporary.
The city’s two traditional, shopping malls, The Citadel and Chapel Hills malls, won’t offer statistics about their vacancy rates, but a stroll through either reveals that they’ve seen better days.
Managers at both malls said vacancy rates are higher than before the recession.
The Macy’s department store at The Citadel closed more than two years ago and has remained vacant. That one vacancy represents more than 193,000 square feet of the mall’s 1.2 million square feet.
At least 27 of the mall’s 140 storefronts are vacant, and most of them are concentrated in the former Macy’s area.
Citadel manager Victoria Harley said the situation is bad but that it could be worse.
“We are slightly down in occupancy over the last few years,” Harley said. “But given the economic climate, it’s not as bad as it might be in other areas and I attribute that, in part, to the military.”
Chapel Hills general manager David Moss said his vacancy rate is between 10 and 15 percent.
He said the vacancy rate is higher now than it has been in the past and that the mall recently lost its Old Navy store and had a number of shops close when their parent companies filed for bankruptcy during the last few years.
Chapel Hills Mall itself emerged from a bankruptcy this summer. Parent company General Growth Properties gave up the mall in bankruptcy proceedings, and Coyote Management and Garrison Investment Group acquired it.
While occupancy is down, Moss said it’s not the worst he has seen and is confident the mall will rebound.
He believes now that the mall has stable ownership, several deals already in the works will be easier to negotiate.
“Businesses, like anyone else, don’t want to sign a lease when they don’t know what owner they’re going to be dealing with,” Moss said. “This should take some of the uncertainty out of the leasing process.”
Moss said the mall, built in 1982, has only recently been drawing business that would have gone to The Citadel before. The Citadel, built in 1972, was the more popular shopping center for a long time, he said.
“We have really good demographics around here,” he said. “Most of our population in this area is white-collar workers who can spend in the shops.”
A lot of those spenders, though, are flocking to new outdoor malls, or lifestyle centers, to do their shopping.
Up the road from Chapel Hills Mall is The Promenade Shops at Briargate, which has a 5-percent vacancy rate.
The shops at Briargate is occupied by primarily high-end retail such as Apple computers, Anne Taylor Loft and Banana Republic.
General Manager Jennifer Crowley said she’s managed both indoor and outdoor malls for years.
“Everything in the retail market is cyclical,” she said. “The history of retail — everything started outside, downtown on main street. Then in the 1970s with the advent of heating and air conditioning, indoor malls became incredibly popular.”
The concept of lifestyle centers was born about 20 years ago. And people who lived outside of the center of town looked to them as an opportunity to shop in a “downtown environment” without having to go downtown, Crowley said.
“So what people would say is a new concept, is actually just a refresh of what shopping was like in the ‘50s and ‘60s,” she said.
Crowley said that the 95 percent occupancy rate at Briargate is easier to maintain when there are few stores to start with. Instead of more than a million square feet, the shops at Briargate has a little more than 225,000.
“And we’re lucky,” she said. “We don’t have any large anchor stores that could go out.”
While Crowley said it does seem to be true that centers like hers are drawing high-end retailers and, in turn high-end shoppers, away from indoor malls here in Colorado Springs, it’s not necessarily happening that way everywhere. She noted that the Cherry Creek Mall in Denver is vital and sustains high occupancy rates even in down times.
One of the biggest issues for mall properties, Crowley said, is that most were built in the 1970s and early 1980s. They’re getting old and it’s becoming harder and more expensive to maintain them.
One of the city’s first malls, now the Marketplace at Austin Bluffs, was built in 1974. When United Properties bought it in 2005, 80 percent of the retail space was vacant, said Kevin Kelley, vice president and regional director for United Properties.
“It was the original mall in Colorado Springs and it didn’t work in that concept anymore,” Kelley said.
Today the shopping center is 98 percent leased, he said, with a focus on necessity shopping. The anchor store today is a King Soopers. Others inside include Hancock Fabrics and 24-hour Fitness.
Kelley said it’s important to look at properties and allow them to evolve with the times.
“The center has been very successful,” he said.
Whether The Citadel will follow the same path is unknown. Shoppers aren’t so sure.
Alec and Michelle Diaz grew up near The Citadel but usually pass it up and shop at the Chapel Hills Mall or another retail outlet.
“It’s empty,” Michelle said. “It used to be full of stores, but you go down some corridors and there are just a couple shops.”