Hailed in the late 1950s as a modern shopping wonder, the first enclosed mall east of the Mississippi has been bulldozed into rubble. A new Harundale Mall, soon to rise from the dust in Glen Burnie, will boast several large anchors and little resemblance to its predecessor.
Farther south on Ritchie Highway, Severna Park Mall, a relic of the mid-1970s, sits intact but mostly a shell, unable to compete with the pizazz of regional malls. For its salvation and a "de-malling," owners look to an expanded, gourmet-style supermarket and perhaps a mega-bookstore.
From neighborhood shopping strips to the biggest malls, the Baltimore region is seeing hundreds of millions of dollars poured into a retail renaissance, fueled as much by a booming economy with willing consumers as by aging centers forced to change with the times.
More centers are forging fresh identities, attracting new tenants and getting infusions of capital than possibly at any time since the 1960s, when retailers began following the flow of residents from downtown to the suburbs.
From Bel Air to White Marsh, from Reisterstown to Columbia, from Glen Burnie to Annapolis, more than 40 centers are in various stages of redevelopment or expansion. The makeovers -- everything from new facades to multimillion dollar additions -- represent an investment of hundreds of millions of dollars on the part of landlords and retailers and mean thousands of new jobs.
In the first six months of the year, area permits for new retail projects and renovations totaled $111.5 million, according to the Baltimore Metropolitan Council's summary of permits valued at $200,000 or more. The permits have gone mostly to projects at existing shopping centers, including major redevelopment at Hunt Valley Mall, where a Wal-Mart Stores Inc. and megaplex theater are under construction, as well as for new department stores in Columbia and Owings Mills. But those permits represent just a fraction of centers now being redeveloped.
Dozens of new hires come with each store opening -- close to 100 full- and part-time jobs for some of the big discounters; more than 100 for supermarkets, and several hundred for department stores, said Mark Millman, president of Millman Search Group, a national retail consultant firm based in Lutherville.
Though the suburban retailing landscape constantly changes as the more competitive players edge out weaker ones, the late '90s have shaped up as an especially active period, retail experts say.
"We're really just seeing the fruits of a six- or seven-year expansion cycle," said Tom Maddux, a principal with Towson-based commercial real estate brokerage KLNB Inc.
Much activity stems from expansions that national retailers launched early in the decade, starting in rural areas with lower development costs before moving into the more densely populated East Coast. Expansions have come from department store chains such as May Department Stores Co., "category-killer" discounters such as Wal-Mart, Dayton-Hudson Corp.'s Target and Home Depot Inc., drugstore chains Rite Aid Corp. and CVS Corp. and grocery retailers such as Food Lion and Metro Food Markets.
"You've got quite a lot happening in retailing in general, and you've got some large retail chains that have been expanded," said Bruce Van Kleeck, vice president of member services for the National Retail Federation. "When they're in the expansion mode, that gets developers' attention quickly."
Retail space has been growing nationally, he said, at an annual rate of 20 square feet per capita.
Even after many retailers broke into the market early in this decade, companies have continued filling in the gaps as sites have become available, fighting to stave off the competition. With the region's oldest centers well into their third decade, many are ripe for redevelopment. By today's standards, store spaces are often too small, ceilings too low, parking spaces too few, public spaces too poorly lighted, facades too outmoded and unattractive.
New retailing concepts
"They're now getting to the point where the economics are leading toward renovation or demolition," said J. Lawrence Mekulski, also a principal with KLNB, who recalls the mid- to late-'80s as only the second-busiest redevelopment period.
Today's developers find themselves forced to drastically re-align centers to accommodate new retailing concepts.
"The anchor stores, [the] major attractions, have all tended to get larger over the last five to 10 years," said Frank Watkins, president of Annapolis-based Bignell, Watkins, Hasser architects, which does about half its work on retail centers. "People who own the centers have to improve them to keep competitive."
A booming economy has driven much of retail's expansion, but retailers have just begun seeing signs of eroding consumer confidence. Upscale stores, more than others, have watched recent stock market declines cut into customers' willingness to spend. Some on the local retail scene said they expect expansion to slow, as lenders tighten requirements.
Still, consumer demand remains strong, and few are worried about an economic downturn that would cripple sales significantly. For one thing, Maddux said, local retail development is tied to immediate demand, rather then speculative growth. And demand from retailers, responding to consumers, remains strong.
Big changes coming
At Odenton Shopping Center, for one, big changes are on the way, promises Keith Allen, general counsel for Nellis Corp., the shopping center's management company. Built in 1960, the neighborhood center on Annapolis Road served area residents well for years, with a Super Fresh grocery store, an Ames discount store and smaller stores.
But times changed. Odenton's population mushroomed. Ames, which had filed for bankruptcy protection, closed its store in 1993. Still, the center has remained otherwise fully occupied and viable. Now, Nellis is negotiating with Super Fresh to move into the former Ames space, twice the size of the current supermarket, with hopes of attracting a major tenant to the Super Fresh space.
"In today's market, when you look to see the viability of the center for the next 10 to 20 years, you feel you need a full-sized grocery store, and full-sized today means 50,000 to 60,000 square feet," as opposed to older supermarkets of less than 35,000, Allen said.
Supermarket growth and expansion is driving much of the region's neighborhood center redevelopment, brokers say.
Food Lion a factor
Food Lion, which began quietly creeping into the region last year, has snapped up space, spurring redevelopment in centers such as Aeroacres Shopping Center, at Martin Boulevard and Middle River Road; Liberty Crossroads, at Liberty Road at Old Court Road; Deer Park Plaza, at Liberty and Deer Park Roads; and Edgewood Plaza.
Metro Food, also expanding, helped breathe new life into Lutherville Station, a former, partly vacant mall in Lutherville that once housed a Stewart's department store. Owner Mid Atlantic Realty Trust eliminated interior spaces and added Metro, remodeled Caldor and relocated Loehmann's. Sales have shot up both at Loehmann's and Caldor, said Bruce Preston, vice president of acquisition and development for MART.
MART is also reviving the 30-year-old Arundel Plaza in Glen Burnie, a $10 million project, where a former Sears, Roebuck & Co. has been demolished to make way for a 130,000-square-foot Lowe's Home Center, a chain expanding into the region. Real estate investment trusts such as MART have become important means of financing shopping centers, according to the International Council of Shopping Centers. And these days, older centers with redevelopment potential are hot investments, Preston said.
"There is additional risk, but the reward is also better" because of the potential to redevelop with new, higher-paying tenants, Preston said.
Costly face lifts
Though the centers require costly face lifts, they also tend to have strong demographics in areas with known shopping patterns.
"The York Road corridor in the Timonium area is one of the strongest retail locations in Baltimore," Preston said. "There was a vacancy there which provided revenue opportunities."
Baltimore-based Manekin Corp. bought into a similar situation when it purchased Harundale Mall from Rouse Co. last December. The James Rouse-built center was considered a novelty when it opened in 1958 with Hochschild Kohn's, Kresge's and an enclosed, climate-controlled design. It thrived until the bigger Marley Station began stealing business when it opened nearby in 1987.
The new Harundale will open in April as a 237,000-square-foot strip center, with only an expanded version of Value City remaining. New anchors will include Super Fresh and an as yet unnamed apparel retailer, said Dicky Darrell, head of retail development and leasing.
But redevelopment has not been limited to older centers. Developers are putting new faces on even more recently built regional malls.
Rouse is spending some $200 million to expand or renovate several Baltimore area centers, including Columbia Mall and Owings Mills Mall, where both have work under way, and White Marsh Mall, Harborplace and Cross Keys, all recently completed. Growth has resulted from Rouse's strategy, developed earlier this decade, of reinvesting in and renovating properties that can dominate some segment of the market, said David L. Tripp, a Rouse vice president and spokesman.
Competition less likely
"This is definitely the most activity for us, somewhat coincidentally, because projects seemed to fall together at once," he said. "White Marsh, Columbia and Owings Mills will all be five-department-store centers. That makes it very less likely that there will be a competing center built nearby."
On a recent weekday morning at Owings Mills Mall, Michael A. Khouri, general manager, led the way down a marble wing of new stores leading to the new Sears, which opened earlier this month.
At the north end of the mall, Lord & Taylor is building a department store to open in November. Across the mall parking lot from Sears, a free-standing 17-screen General Cinemas movie megaplex is under construction, set to open in December with several "premium" theaters -- meaning adults-only and tableside service. And near the entrance along Red Run Boulevard, crews are clearing the way for a five-restaurant park.
The changes, which will bring the center to 1.2 million square feet, are the biggest ever for the mall, which opened in 1986 as a high-end fashion center. The original focus appeared to be too high-end -- Saks Fifth Avenue pulled out in 1996, to be replaced last year by J. C. Penney Co. Inc. Booming residential growth, with a large influx of first-time homebuyers and families, has prompted the mall to turn its attention to family shopping habits.
"This area is growing tremendously, both residentially and commercially," Khouri said. "We are keeping pace with that growth. It's a continual evolution."
Pub Date: 10/25/98