No matter what anyone says, Matthew DuPlessie sees a future in indoor shopping malls. At least for his company.
To DuPlessie, malls offer large, open spaces that have been abandoned by many traditional department store anchors, plenty of parking and, in many cases, foot traffic that remains fairly strong.
A perfect place for DuPlessie’s Level99, a 40,000-square-foot entertainment venue that features “challenge rooms,” craft beer and dining.
DuPlessie, the CEO of Level99, opened the first location in the Natick Mall in Massachusetts in 2021. Now he’s ready to move into Providence Place mall, in a space vacated by J.C. Penney Co. eight years ago. Level99 is slated to open in January.
“You need something they can’t get online,” DuPlessie said of attracting a customer base. “[Malls] need to adjust their strategies towards experiences, and things that require people to get out and around.”
The arrival of Level99 at Providence Place is a small victory in a retail landscape that has only grown more dire over time for indoor malls as the public’s shopping habits shift in a digital age.
The predictions for the end of malls entirely have proved to be premature, but it’s clear an evolution is underway. At the height, there were as many as 1,500 large, enclosed malls in the U.S. but the number has now shrunk to about 700, according to a Capital One Shopping research report released in June, and up to 87% are at risk of closing in the next decade.
The regional scene is no different.
Indoor malls such as Lincoln Mall and Midland Mall in Warwick (also known as Rhode Island Mall) that were constructed in the 1970s have been converted to outward-facing plazas featuring big-box Walmarts and Targets.
Others are barely holding on in their original form. Emerald Square Mall in North Attleborough stands at about 65% to 70% full. And the owner of the Dartmouth Mall, Pennsylvania Real Estate Investment Trust, filed for bankruptcy in December.
One regional mall doesn’t even exist anymore. Silver City Galleria in Taunton, constructed in 1992, was demolished in 2021.
Then there is Providence Place and Warwick Mall, which have made slow recoveries since the COVID-19 pandemic and the economic upheaval it wrought but are seemingly the healthiest of the local malls.
In 2022, the owner of Providence Place sought to extend its tax treaty with the city, due to end in 2028, by another 20 years. The proposal drew opposition and was shelved in late 2022 and hasn’t been discussed publicly ever since.
In September of this year, Fitch Ratings predicted “continued performance declines and weaker market fundamentals” for Providence Place in an assessment of commercial mortgage-backed securities involving the mall.
Still, mall owner Brookfield Properties says the occupancy rate stands at 98%, and in recent months, new key tenants have moved in, including Brazilian steakhouse Fogo de Chao Churrascaria (Providence) LLC, which occupies a high-profile spot along Francis Street that had been empty for seven years.
And now Level99’s arrival is perhaps giving Brookfield an additional boost of confidence.
“The downtown is struggling,” said John Zilliken, Providence Place general manager. “And if anyone is going to turn that around, it’s going to be us.”
SHIFTING SHOPPERS
In the mid-1990s, as city officials and developers nailed down a deal to establish the Providence Place mall, municipal leadership held high hopes that the shopping center would serve as an economic boon to the city for decades to come, even inking a 30-year tax deal with mall developers.
At the time, Providence was in good company, with communities throughout the U.S. clamoring to establish shopping malls since their formal creation in the mid-20th century.
The 1.3-million-square-foot Providence Place went on to open in the summer of 1999, boasting the first Nordstrom Inc. location in the Ocean State as one of its anchors, alongside Filene’s and Lord & Taylor.
But since that time, the economic picture around malls has changed drastically.
“It’s a trend we’ve seen over the past 20 years or so,” said Allison Shwachman Kaminaga, a lecturer of economics and mathematics at Bryant University. “Part of it was that the market was a bit oversaturated … but then we started seeing a change in the way people shop.
“People started going to more open-air shopping centers, as opposed to enclosed malls,” she said, and they flocked to big-box retailers such as Walmart and discounters such as Dollar General.
None of Providence Place’s three original anchors remain in the shopping center, with Filene’s and Lord & Taylor locations – the latter of which was replaced by J.C. Penney – now completely shuttered. And while Nordstrom has held on nationally, the last of the mall’s three original anchors left the shopping center in 2019, and was later replaced by Pennsylvania-based department store Boscov’s.
Meanwhile, other higher-end stores at the mall, such as Williams-Sonoma, Pottery Barn, Crate & Barrel and Restoration Hardware, have also departed Providence Place over the years.
A Providence Place spokesperson did not respond to an inquiry seeking the mall’s annual-sales-per-square-foot figures – a key measure of retail performance. Boscov’s also did not respond to a PBN interview request.
Zilliken says he’s confident that Providence Place can remain relevant despite bumps in the road and national trends.
The way to do that, he says, is through bringing in tenants that reflect changing consumer trends. People no longer look to malls just for retail but for entertainment and social activities.
Domenic Schiavone, general manager at the Warwick Mall, holds a similar optimism.
Schiavone declined to provide a figure on the Warwick Mall’s annual sales per square foot, citing a lack of accurate data due to “differing tenants’ sales reporting timing or lack of sales reporting requirements.”
In July, a Fitch Ratings assessment of commercial mortgage pass-through certificates involving Warwick Mall noted “additional stress” on a mall loan, but noted that the complex has also benefited from a renewal of the Nordstrom Rack lease and signing a new lease with the standalone Apple Cinemas Warwick Inc., which replaced Showcase Cinemas in 2022.
The 1-million-square-foot Warwick shopping center boasts a 95% occupancy rate, Schiavone says, and is also striving to integrate more entertainment-focused tenants. Over the summer, for instance, the mall brought in photography studio and event space Blissful Selfie Spot.
“Malls that have stayed current do well,” Schiavone said. “Overall, the doom and gloom about malls dying is certainly not the case. … It’s a matter of just remaking.”
That doesn’t mean abandoning traditional retailers, he says. While these stores may have felt initial pressure from the rise of e-commerce, many have adapted to an “omnichannel” approach, drawing customers to their brick-and-mortars through strategies such as free, in-store pickups for online orders.
CHANGE OF PLANS
Still, reminders of the decline of malls linger throughout the region.
The Emerald Square Mall in North Attleborough, for instance, attracted lively crowds of shoppers for decades after its opening in 1989.
Almost 35 years later, however, the 1-million-square-foot shopping center now sits at just a 65% to 70% occupancy rate, according to North Attleborough Town Manager Michael Borg.
Sears, one of the mall’s original anchor tenants, pulled out in 2021 as part of a wave of nationwide chain closures, and mall ownership hasn’t attracted another tenant. Instead, three floors remain entirely empty, a specter of the shopping center’s glory days.
There’s no sense in trying to re-create the past, says Borg, who acknowledges that the heyday of Emerald Square Mall – and malls in general – has passed.
“The bottom line is the traditional mall, the way it was before, is not viable, and it has to change,” Borg said. “Otherwise, it’s just this large piece of property that becomes urban decay.”
Town leaders believe the site along Route 1 and Interstate 295 can play a vital role in solving issues such as a housing shortage affecting the region. They are working with a developer who wants to construct more than 250 apartments on the property.
Kohan Retail Investment Group, the mall owner, did not immediately respond to an interview request. But the town is working with Dedham, Mass.-based developer Schiavo Enterprises LLC to combine new construction and the abandoned Sears infrastructure, Borg says.
The project still remains in its development phase, Borg says, and the town continues to welcome project bids. North Attleborough officials will eventually need to seek zoning changes.
The town is also encouraging infrastructure for other, nonretail tenants, such as medical offices or even a Massachusetts Registry of Motor Vehicles office, Borg says, with the intention of driving up sales at stores remaining in the mall.
“Imagine going to the RMV, and you already know you’re going to have to wait an hour-plus,” Borg said. “But they give you a buzzer like you would get in a restaurant, and you go right into the stores. We have an opportunity there.”
“Maybe [Emerald Square] is something that’s become a burden to the community,” Borg said, but how do we take it and make it a benefit to the community?”
Elsewhere, the owners of the defunct Swansea Mall – Anagnost Cos. and Brady Sullivan Properties – have been pursuing a similar “lifestyle center” concept, with plans calling for two new residential buildings with 144 apartments, as well as space for offices, retail and restaurants.
So far, the 84-acre site has a self-storage facility, a gym, a packaging manufacturer, a warehouse and a church, says Dick Anagnost, president of New Hampshire-based developer Anagnost Investments Inc., part of Anagnost Cos.
The town has given the go-ahead for the apartments, to be built with Brady Sullivan Properties.
“The days of shopping malls as we knew them have gone by the wayside,” Anagnost said. To adapt, these former mall sites need to “become more mixed-use developments,” he said. “And a lifestyle center provides a residential community and a mixed-use development that allows you to run the gamut.”
The range of current tenants “is symbiotic, but you wouldn’t normally find all of those in one place before,” he said.
In other states, Anagnost has repurposed five malls into lifestyle centers, which are based on the idea of bringing various needs and recreational activities into one development. Those developments are now fully leased, he says.
It takes time to get to that point, Anagnost says, and he doesn’t have an estimated completion date for the Swansea project.
‘POWER’ PLAY
Other mall properties have taken a different route.
Lincoln Mall, Rhode Island Mall in Warwick and Harbour Mall in Fall River have been renamed and transformed in recent years into what’s known in the commercial real estate sector as “power centers,” outward-facing retail locations that function as open-air shopping centers anchored by big-box stores.
Kristen Regine, a professor of marketing at Johnson & Wales University, believes those transitions are the way these locations will remain viable as retail properties.
Most traditional malls are becoming outdated, she says, and consumer tastes have shifted to open-air complexes such as Garden City Center in Cranston.
“They have the right offerings people will go out and get,” Regine said, offering exclusive brands, food and experiences such as concerts.
While outdoors, Garden City Center doesn’t base its concept around big-box stores; the shopping center instead offers a combination of local retailers and higher-demand national stores, such as Anthropologie and Madewell, that often choose Garden City Center as their only Rhode Island location.
In fact, around half of the shopping center’s tenants house their sole Ocean State storefronts at Garden City, says Faith Lockhart, the center’s marketing manager.
Still, Kaminaga isn’t ready to write off malls entirely.
“I don’t think malls are going to disappear,” she said, though they’ll need to adjust. “Malls that are able to diversify to include both retail and nonretail spaces have the most promise.”
NEXT LEVEL?
That’s what Providence Place is attempting to move toward now.
When mall owner Brookfield Properties, run by parent company Brookfield Property Partners LP, sought to extend its tax treaty with the city through 2048, the proposed ordinance would not have only continued the property tax discount but would have expanded how the property can be used.
Instead of focusing on retail sales, as the existing tax treaty states, the new one would have allowed the owners to redevelop the space, adding office, education, residential and medical uses, among others, to the existing shopping center.
With talks at a standstill for more than a year, the mall owners are forging ahead with finding entertainment-aligned tenants. Level99 is building out about 40,000 square feet of space on the third floor once occupied by J.C. Penney.
In addition to various mental and physical “challenge rooms,” Level99 will feature an on-site taproom and restaurant through a partnership with Boston-based Night Shift Brewing Inc.
Zilliken describes Level99’s opening as part of a strategy to attract more experiences based on socializing – rather than traditional retail shopping.
DuPlessie says that Level99 will power the mall itself.
“We tend to be a destination-drive location … as opposed to the pretzel shop in the mall,” he said. “We’re the folks who bring people from afar, with long drive times to come see a concept like this, so many of the smaller tenants really benefit from that increase in traffic.”
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