Shopping for new life: The future of Memphis malls

Once upon a time Memphis bought its goods in neighborhood shopping malls. Southland and Southbrook malls in Whitehaven, Raleigh Springs Mall in Raleigh and Hickory Ridge Mall in Hickory Hill all have served their neighborhoods.
 
But that trend morphed into massive regional centers, and enclosed malls have transitioned into lifestyle centers.
 
Much has changed not just in Memphis but in the national mall landscape. As the 1990s moved into the early 2000s, the development of enclosed malls diminished. It’s not that fewer malls were built; the move was on to lifestyle centers.
 
Joshua Poag is President and CEO at Poag Shopping Centers, the originator of the lifestyle center when it originally developed Germantown’s Saddle Creek in the 1980s.
 
Poag said there were probably some 20 lifestyle centers when he got involved in the business in 1998. By 2008’s recession, that number had swelled to about 400. And in the last 13 years, he said fewer than 20 enclosed malls have been built across the United States.
 
The change has had multiple causes, but the economic recession of 2008 is the one that continues to alter the landscape.
 
“The traditional lifestyle center or mall that has developed in the suburbs is difficult to do and the reason is there were too many developed in the mid-2000s,” Poag said. “They were so aggressive on growth and suddenly when the recession happened retailers were spending money on stores that weren’t performing. In talking to retailers now they have to have a home run location.”
 
 No longer can retailers look ahead to potential future growth. The demographics must be in place now, Poag said.
 
That helps explain where the shopping growth is now in the Memphis area. Carriage Crossing, which is now a Poag-owned property, opened in Collierville in 2005. It sits near the town’s border with Germantown.
 
Together, the two communities provide demographics that make sense for any number of retailers. And in DeSoto County, where Tanger Outlets Southaven will bring some 70 retailers to the market when the mall opens in November, that community was the fastest growing county in Mississippi for most of the early 2000s.
 
There hasn’t been a new enclosed mall open in the Memphis area since Wolfchase Galleria was built in the late 1990s in Cordova. Since its opening, the Mall of Memphis closed and Hickory Ridge Mall has been transformed into a town center.
Hickory Ridge already had lost retailers, but in February 2008 a tornado swept through Hickory Hill, tearing through part of the mall and ultimately leaving Sears as the only anchor tenant.

Today, Hickory Ridge Mall Towne Centre serves five purposes: retail; city, county, community and medical services; training and education; family entertainment; and outreach.

There is a small selection of retail businesses that cater to the neighborhood mixed in with community services.
 
The town center concept is at the forefront of discussions on what to do with other malls in the Memphis community.
 
Raleigh Springs Mall was the city’s second enclosed mall when it opened in 1971. As that area’s population began to shift, the shopping mall’s life slowly followed the people east. Sears announced its closing in 2011, signaling the end for the mall’s final anchor.
 Hickory Ridge Mall has been transformed into a town centerThe Memphis City Council voted earlier this year to tear down the mall. The city has been fighting to take the property through eminent domain to turn it into a civic plaza that would include a police precinct, library, community center and more.
 
It’s certainly one option for failing mall properties. Southbrook Mall in Whitehaven also has been part of that discussion.
 
If a mall’s ownership is willing to invest in the local community it can make a difference. Poag is seeing it work at Collierville’s Carriage Crossing, where a few local small retailers are mixed in with national outlets and anchor tenants.
 
“Some of our best tenants can be locally based, but it’s also difficult,” he said. “The national tenant will sign a 10-year lease and you know you won’t have issues. But a local tenant, if they’re not doing well it can be a more difficult situation. It’s a balance.”
 
Mall management can make a difference. Southland Mall, despite losing Macy’s as a tenant this year when the retailer closed several nationwide, has a strong tenant mix. The city’s first enclosed mall still has Sears as an anchor.
 
“Southland Mall is a decent mall,” Poag said. “It’s had ownership that paid attention to it. They are really focused on their core trade area.”

That doesn’t mean challenges don’t exist, especially with the existence of larger regional centers, including the soon-to-open Tanger Outlets.
 
Danny Buring, Managing Partner and Principal Broker of the Memphis office of The Shopping Center Group, said people in those communities want to drive past smaller malls for the bigger ones, even if they are farther away.
 
“I think people will drive out of their way to go to the newer, shinier properties,” he said.
 
“People from Raleigh and Frayser are driving out of their way to go to Wolfchase. And Whitehaven, they are driving by the mall to go to Southaven. With Hickory Ridge it was the same. If you look at when Hickory Ridge Mall was built in the ’80s, there was no interstate. When 385 was built it cut everything off.”
 
When Tenn. Highway 385 began its reach to Collierville from I-240 in the mid-’90s, it began a slow downward march of Hickory Hill, along with that community’s annexation by the city of Memphis. By 1999, the highway had made its way to Collierville, altering the traffic flow of Winchester Road.
 
That and the development of Wolfchase in Cordova would accelerate the death of the massive amounts of big-box retail that stretched along Winchester from Riverdale Road west for a couple of miles to Hickory Ridge Mall.
 
The move of much of those retailers to other locations has made the commercial centers of Hickory Hill virtual ghost towns.
 
“On Winchester there is so much square footage that was built in the mid- to late-’90s that as people dropped out or retailers went bankrupt there was no one to backfill,” Buring said. “There are empty boxes there now. It’s better than during the recession but it’s still empty. There is not enough of the second- and third-generation users to backfill those spaces.”
 
If the extension of 385 cut off the Hickory Hill neighborhood, the existence of I-40 is what makes the Wolfchase area tick. Recently national restaurant chain Cheesecake Factory made its Memphis debut at the mall. And Ikea is bringing its first furniture superstore to Tennessee near Wolfchase.
 
Buring said Wolfchase is a regional retail giant that isn’t going away.
 
“It’s the biggest and best performing mall with the ability to reach 75 percent of the population in a 20-minute drive,” he said about why Cheesecake Factory would choose the Wolfchase area instead of other locations in the city. “They pull in so many people, they look at the cost of what they’re going to pull into the mall. People will wait an hour and a half for a seat so they have to shop while they wait.”
 
Of course being located near an interstate doesn’t guarantee success. The former Mall of Memphis site at Perkins Road and Interstate 240 is a giant field waiting to be developed. The premier mall in Memphis saw its downfall from a mix of a reputation for crime, not to mention the success of Wolfchase and Hickory Ridge.
 
The mall closed Dec. 24, 2003, and was demolished the next year. Since then, a number of possible development opportunities have come and gone, including talk of relocating Walmart and Sam’s Club to the site.
 
Developers of what would have been a more than 1 million-square-foot industrial park on the former mall site recently pulled out of their proposed project because of concerns over a payment-in-lieu-of-taxes application.
 
The former Mall of Memphis site isn’t likely to be considered a retail destination again. Buring said the heart of retail is now centered in Wolfchase, Collierville, East Memphis and Southaven.
Land availability makes suburban development more practical.
 
“The retail demand has to be there. We’re looking more at urban core development,” Poag said. “Historically people fled the urban cores and that’s led a void in the market. Urban core demographics have existing population and office workers, but it’s difficult to get land. What we’ll have to do is blend retail on the bottom floor with things above it. Make it more dense.”
There is one city retail center that will continue having life in the heart of East Memphis, Oak Court Mall.
 
“It’s always a phenomenal Macy’s, the top-performing store in the city,” Buring said. “That mall, they are pretty creative. They’ll look at ways to create some opportunities to open it out from Poplar. If they could do that with a partial redevelopment that would be unique. Retailers know the area. They want to be in that pocket.”
 
As the city’s retail life continues moving away from neighborhood malls, could there be mall growth in the city’s future?
 
It certainly won’t be of the enclosed variety. While some developers continue opening a few enclosed malls – two recently opened in Puerto Rico and Florida – any large-scale retail openings would be of the lifestyle variety, although that’s not likely on the horizon either.
 
“The way I describe it is if you’re a mother with two kids and have to park a quarter of a mile away from the door and it’s sleeting outside, you have to get the kids in the stroller and walk from the parking lot in,” Poag said. “You park at the food court entrance and realize it’s the wrong door. You’re already exhausted by the time you get in the mall. You have to walk across the mall to get to your store. You walk all the way back to your car and you’re exhausted. It took you an hour.
 
“Or you can pull up to Saddle Creek. I see Ann Taylor 15 feet away. Park nearby and I’m done in 20 minutes.”