Mall owner General Growth Properties will work with Kimco Realty to redevelop and "de-mall" the 1-million-square-foot site — a move that mirrors the remaking of a shopping area in Hunt Valley. Developers said Thursday that they did not know how much of the mall they would demolish, but they expect anchor stores Macy's and JC Penney, as well as the AMC movie theater, to stay.
Surrounded by empty parking lots, the mall has lost a series of tenants over the years, an exodus that experts say left it without hope of recovering in its current form.
It opened in 1985 and was first meant to be an upscale shopping destination. Saks Fifth Avenue opened in 1986 but closed after a decade. Store after store later left the shopping center, including anchors Lord & Taylor, Sears and Boscov's. Most of the mall is now vacant.
Community leaders and county economic development officials say the project is poised to go hand in hand with other efforts to revitalize Owings Mills. The mall sits near the site of the future Metro Center, a long-awaited project that finally broke ground earlier this year.
They also hope it could emulate the transformation of the former Hunt Valley Mall — a shopping center once nicknamed "Death Valley" — that was also "de-malled" and turned into the successful Hunt Valley Town Centre.
"After great effort, the wait is over," County Executive Kevin Kamenetz said. "To the people of Owings Mills, congratulations, because it's going to be happening now."
The Owings Mills Mall project is "still in the design phase," said Tom Simmons, president of Kimco's Mid-Atlantic and Northeast shopping centers regions. Developers plan to release a more detailed proposal next year and finish building by late 2014.
They don't yet know which tenants would move in, but expect them to include both big-box and smaller "junior box" retailers, said Simmons and Richard Pesin, General Growth's executive vice president for anchors, development and construction. The project will transform the enclosed mall into an exterior-facing "town center."
The partnership between the two companies makes sense, analysts said, because General Growth specializes in owning regional malls while Kimco, the nation's largest owner of shopping centers, has an expertise in the non-mall center.
"It is pretty clear that Owings Mills as a regional mall has no future," said Nathan Isbee, a vice president at Stifel Nicolaus & Co. in Baltimore who follows retail real estate investment trusts. "It is dying. It is either do nothing and let it die as a regional mall or try to reinvent it as something else that would draw people to the site."
The mall is so empty that "there is zero interest from national retailers to lease space in Owings Mills Mall," Isbee said.
The type of center developers ultimately build will depend upon the anchors and other retailers they are able to attract, experts said. They said developers will likely try to find a "destination" retailer without a presence in that area now, such as Wegmans, Costco, Kohl's, Lowes or Sports Authority.
"If you get one destination retailer, other retailers will be willing to come along," Isbee said. He added that despite the store closings by several large chains, "national retailers are in pretty good shape now and looking to add new stores. Balance sheets are strong, and they've weathered the storm pretty well."
The Metro Center development is set to eventually feature the county's largest library branch, a community college center, and retail, residential and office space.
The Solo Cup Co. property, less than two miles from the mall, is also slated for redevelopment, although plans there haven't been finalized.
"The hope is that we would achieve a full, high-quality buildout" of the area, said Dan Gundersen, the county's economic development chief. "What we need is that vibrant mix of retail, residential and entertainment venues."
Nearly 155,000 people live within a five-mile radius of the mall, according to 2009 county estimates, with about 66.2 percent of the households making more than $50,000 a year.
"The demographics that surround the mall are not consistent with the condition of the mall today," Kamenetz said.
The Owings Mills area has long sought a hub for community activity, said Brian Ditto, executive director of the Reisterstown-Owings Mills-Glyndon Chamber of Commerce. The mall, Metro Center and redeveloped Solo Cup property together could "form this nucleus," he said.
That way, "we'll be able to shop once again in our own backyards," Ditto said.
"The population of shoppers didn't go away," Ditto said. "The stores went away, and that's what drove people to shop at Hunt Valley and White Marsh and other malls."
With three development projects slated for the Owings Mills market, it's likely that developers would vie for the same tenants. But the projects benefit from strong support from county officials and timing — moving forward at a time when a lot of empty retail space has been absorbed in the last couple of years by retailers such as hhgregg and Petsmart.
"Developers are starting to put things on the books, for opening in 2013, 2014 and 2015 because supply has gone down," said Geoffrey L. Mackler, a principal at real estate brokerage H&R Retail. Despite Owings Mills mall's past struggles, the site remains a strong location, Mackler said.
"It does have great access to the population in Newtown, which is densely populated with young families and single people and access from Owings Mills Boulevard and 795," Mackler said. "If they're able to attract the best tenants there, they'll be able to draw from a larger area and can attract people in Carroll County" as well.
Mackler predicted that the center would be designed as a hybrid, with "big box" stores, the existing department stores and small shops, many of them service-oriented or eateries that would complement the anchors and the movie theater.
The project's $65 million price tag "shows that the area is still attractive for developers," said Glenn Barnes, president of the Reisterstown Improvement Association.
"Everybody should feel a whole lot more positive about being in the area," he said. "If you have a strong, vibrant community from the commercial standpoint, it makes it more attractive for the people who want to buy homes."
Stevenson University, where enrollment has more than doubled over the past decade, is also in Owings Mills, and officials there are excited about the mall project, said Steve Close, the school's vice president for university advancement.
'It's going to be a wonderful amenity for our students and parents and alumni and friends who come to visit," he said.
General Growth is based in Chicago. Kimco is headquartered in New York but has regional offices in Lutherville-Timonium.
General Growth, which emerged from bankruptcy protection last year, also owns Harborplace and The Gallery in downtown Baltimore as well as The Mall in Columbia, Mondawmin Mall, Towson Town Center and White Marsh Mall.
Through September this year, the company had added 17 big-box anchor stores to its regional malls across the country and said it expected that number to grow to 28 anchors by the end of the year, with stores such as Crate and Barrel, Nordstrom Rack, Bed, Bath & Beyond, Cabela's, Kohl's, hhgregg, LL Bean and Ulta.