Yakima Mall Faces Uncertain Future

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Yakima Mall Faces Uncertain Future - at the Yakima Herald-Republic

Sunday, July 21, 2002
1594 words
Yakima Herald-Republic

Yakima Mall Faces Uncertain Future

By DORI HARRELL
Yakima Herald-Republic

While most of the Yakima Mall stores have shut down or plan to move to the Valley Mall when the Bon Marche opens there in two weeks, the big question is what will happen to the Yakima Mall?

Will the multilevel, 650,000-square-foot Yakima Mall become business offices, an entertainment complex, a call center facility, a higher-education structure, or a specialty boutique and restaurant plaza? Will it start over with a new mix of anchors? Or will it simply close?

In one form or another all these ideas have been bandied about -- by mall owner Joe Morrier, city officials, community residents and mall store employees.

But Morrier isn't saying what direction he plans to take the mall. What he did say in late June when asked about the mall is that he's working on "a lot of deals at this time, but we just can't talk about them. But we're optimistic about the future."

Since the decline of the mall in the last two years -- starting when J.C. Penney pulled out in June 2000 -- Morrier has said he's focusing on recruiting new retail businesses.

In March 2000, he even displayed an M & F (Meier & Frank) symbol on a Yakima Mall newspaper advertisement.

But new retail hasn't appeared and old retail continues its string of departures.

In March of last year, Morrier said The Bon Marche's space could turn into apartments. He's discussed plans to give his mall a face lift and turn it into a community center.

But so far, it's all talk. The city has received no requests for remodeling permits.

According to a consultant who's earned the honorary title of "mall doctor" within the shopping center industry, Yakima has a huge problem on its hands.

"The reality is, the Yakima Mall shouldn't be a conventional mall going forward, it should be something else," said Mark London, a Lake Bluff, Ill., consultant who helps turn around failing malls. "But it'll take some sort of civic and intelligent private enterprise to evolve it successfully."

As for the Valley Mall, undergoing a $38 million expansion that includes a nearby plaza already filled with retailers such as Old Navy and Famous Footwear, it will most likely become the Yakima Valley's main shopping center, he said.

The area simply cannot support another mall given its lack of population and depressed economic climate, London added.

The Yakima Mall could wind up as administrative offices or a mix of retail, entertainment and restaurants or any number of things. It could also just stand empty, he said.

To convert it will likely require government-funded incentives, he said.

Three years ago, London advised on the Port Plaza Mall, a declining shopping center in downtown Green Bay, Wis. Its story is similar, in part, to the Yakima Mall.

Built in the late '70s to help revitalize the downtown, the mall declined rapidly after an anchor pulled out in 2000. Like the Yakima Mall, Port Plaza stores were lured to the suburbs.

Its vacancy rate climbed to 40 percent, said Jeff Mirkes, executive director of Downtown Green Bay Inc. In 2001, his agency commissioned a study to see how the 1 million-square-foot mall could best be used.

In order to keep Port Plaza from failing entirely, the Green Bay mayor spearheaded the city's purchase of the mall in November from its East Coast owners. The city, in turn, immediately sold the structure to local developers who moved their offices into the center.

The owners changed the name to Washington Commons, committed to pouring $1 million into renovations, laid new tile and put up new lighting, covered the indoor fountain and turned it into a public walkway and added a food court, Mirkes said.

"There was an immediate change in the spirit of the property," he said.

Washington Commons owners have planned for a mixed use of retail, restaurants, entertainment and offices, said Washington Commons marketing manager Karen Flood.

"We can't be a suburban mall. We're urban and our stores must reflect that," Flood said. "We're recruiting specialty, niche and adult retailers. If you want Old Navy, go to the suburbs."

The mall has no separate parking and relies on city-owned lots. It negotiated with the city to change the parking from 50 cents an hour, all the time, to one-hour free parking on weekdays, and free parking after 6 p.m. on weekdays and weekends.

"We're still nibbling away at the parking issue. Charging for parking is a religion with the city; it's a battle royal," Flood said. "But we continue to bang out the message, 'We're here, and we're open.' "

Washington Commons is just one example of a revitalization effort in a resurgence of downtown shopping center redevelopments, according to the International Council of Shopping Centers. The New York City-based trade association represents more than 40,000 members worldwide.

"It's not uncommon for a mall to lose tenants and re-create itself in a few years, and not come back as a traditional mall," said council spokeswoman Patrice Duker.

But mall transformations can take as long as 10 years, she added.

She pointed out La Mirada Theatre Center in La Mirada, Calif.

Sixteen years ago it was the La Mirada Mall.

According to a council analysis, the La Mirada Mall, built in the 1950s, was plagued by vandalism, vacancies, below-market rental rates and lack of customers in the 1980s.

In 1987, its owners decided to raze the 700,000-square-foot mall and rebuild the site into a retail and residential center.

Three years later, they demolished the mall, keeping only 80,000 square feet for retail leases. They opened the first phase in 1991, a retail/cinema shopping strip, and later built single-family homes, all with a Latin American theme.

The assessed value of the center climbed steadily from $34.8 million in 1990 to $109.5 million in 2000, according to the council report.

"What may happen to your Yakima Mall, only time will tell," Duker said. "It depends on what the market calls for and where the owner or developer wants to focus."

The Yakima Mall: A Timeline

1958: The Yakima City Commissioners grant the Retail Trade Bureau's request to set up a shopping mall on several downtown streets. However, the bureau never builds a mall.

1965: J.C. Penney talks about closing its downtown store and opening a larger store elsewhere.

1966: The Stone Church and the First Methodist Church approve proposals granting options on downtown church properties to Joseph Morrier for a projected downtown shopping mall. Morrier later purchases the properties.

1968: Equitable Life Assurance Society approves a $6 million, 26-year loan to a group of private investors planning to build the Yakima Mall. Morrier is part of the investment group.

1969: Initially, other financing is difficult to find and there's talk of dropping the whole project. But the money starts to roll in and the shopping center moves forward.

1969: J.C. Penney signs a lease to occupy 147,000 square feet of the proposed mall.

1970: Sunnyside Mountain States Construction wins the bid to build the mall. The city issues its largest-valued building permit to date for construction of the Yakima Mall -- an estimated $8 million. Construction on the 20-acre mall begins.

1971: The mall's doors open Oct. 27 and thousands turn out. J.C. Penney, The Bon Marche and 14 other stores open that day, and 13 shops are soon added. By 1974, 38 stores occupy mall space.

1973: The mall's investment group is in arrears on its $6 million loan from Equitable Life and files for bankruptcy.

1974: A federal judge says Equitable Life may not foreclose. Downtown property owners Lee Semon, Mike Mercy and Joe Diet Zen discuss purchasing the 1,200-stall mall garage to add more free parking downtown. They later abandon the idea.

1979: Finally, a mall bankruptcy plan is OK'd by the courts.

1980: The mall emerges from bankruptcy. Morrier now owns 100 percent of its stock.

1985: Morrier upgrades the mall with new ceilings, walls, floors, benches and lighting.

1986: The mall is assessed at $20 million. In a newspaper article, Morrier says: "I'm going to have a lot to say about what happens in downtown Yakima just because of what I own."

1996: Morrier again redecorates. He updates the lights, adds marble floor tiles from Italy, revamps the outdoor courtyard, and opens a new food court and a west entry.

1997: Morrier's company, JEM Development, asks the city to apply for a $750,000 low-interest federal loan to complete $2 million in mall store-front improvements. A month later, JEM withdraws the request.

2000: Early in the year, J.C. Penney announces it will close because of inconsistent sales; it closes its Yakima Mall location in June and leaves Yakima after 74 years here.

2000: Midyear, The Bon Marche says it'll shut down its Yakima Mall space and move to the Valley Mall in fall 2002. It cites needs for larger space and free parking.

2001: Morrier files a lawsuit to try to force The Bon to stay until its lease expires in December 2002. A federal judge says the store can move in August, but must pay its Yakima Mall lease until it expires. Mervyn's closes, and a host of smaller shops follow suit, including Eddie Bauer, Mr. Rags, Fred Meyer Jewelers, Kay Jewelers, A&H Hallmark, Cinnabon and Payless ShoeSource, among others.

2002: The Bon locks up its Yakima Mall doors on July 20 and plans a grand opening in the Valley Mall on Aug. 2. Due to the closure of so many mall stores, Morrier's Yakima Mall properties were reassessed at $13.2 million, down from $20.6 million.

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