It happened at the grand dame of enclosed Omaha retail malls, the Center.
Bellevue’s Southroads Mall followed suit with its transformation from declining retail hub to office park. Crossroads Mall at 72nd and Dodge Streets is poised for reincarnation next, as a still-to-be-defined campus of assorted uses.
Now the Mall of the Bluffs — faced with competition from younger and hipper outdoor-focused shopping centers — appears headed for a fate similar to those and numerous other aging indoor malls that survived only after a major retrofit or by finding a whole new purpose.
Real estate experts predict the 500,000-square-foot Council Bluffs property, which is up for auction next week, will see its next life as a data center, offices or some kind of hybrid featuring shops, housing, classrooms and businesses. Almost certainly, they agree, the site must morph into something other than the regional retail complex it was built as 30 years ago.
“The industry has changed,” said Mark Obermeyer, who heads the local retail brokerage team at CB Richard Ellis|MEGA. Retailers, he said, are following anchor stores to newer open-air complexes.
Said Holly Jones at the Lund Co.: “There are lifestyle centers, urban-environment outlets, the Internet — lots of ways to get product and services without visiting a traditional enclosed mall.”
Shoppers across the country have been leaving behind many enclosed malls in favor of outdoor-focused centers. Developers classify the bigger outdoor centers in two categories: Lifestyle centers, such as Omaha’s Village Pointe, have upscale tenants and entertainment and dining options. And power centers, such as Omaha’s Westwood Plaza, have big-box stores and smaller retailers.
The tale of shoppers’ preferences can be told through the types of centers that have been built: In the years between 1980 and 1984, there were 153 enclosed malls built in the U.S.; during that time, there were 64 large outdoor-focused centers built, according to data from the International Council of Shopping Centers.
From 2005 to 2009, developers built 63 enclosed malls. They built 646 outdoor centers during the same time.
Generally, the lifestyle and power shopping centers without common hallways to maintain are less expensive for developers, said Arun Agarwal of White Lotus Group of Omaha.
Retailers like them in part because customers can park at a store’s entrance without necessarily being distracted by other shops. Retailers can still benefit from crowds that are drawn to the sites by outdoor concerts or other events.
Of course, not all enclosed malls are in the dumps. Sales have surged, for example, at Omaha’s Westroads Mall, which last year saw a $12 million renovation and this year is getting a new multimillion-dollar “food hall” that will introduce treats such as ramen, sushi and a full-service bar.
The once-shining-star Oak View, while far from on life support, is facing challenges as its occupancy rate has slipped to 88 percent, compared with Westroads’ 98 percent.
“Each property is unique, and there are different extenuating circumstances,” said Jesse Tron, a spokesman with the International Conference of Shopping Centers. And although some enclosed malls are struggling, occupancy rates at the malls that remain are higher than they’ve been since 1987, he said.
The trend away from enclosed centers was evident for years at the Mall of the Bluffs, which opened in 1986 near Interstate 80 and Madison Avenue.
Chicago-based General Growth Properties, manager of Omaha’s Westroads and Oak View Malls, in 2013 sold off the Bluffs mall and surrounding commercial structures to New York-based Namdar Realty Group for $8.5 million.
By then, it already had lost anchors to trendier shopping areas just minutes away by car. J.C. Penney moved to the Marketplace in 2008 and Target moved to Metro Crossing in 2009. Barnes & Noble closed its location in 2011.
Today, Mall of the Bluffs is less than 35 percent full. Listed on Auction.com with a starting price of $1.5 million, bids will be accepted Aug. 3-5.
Among the holdouts at the mall was the Buckle apparel store, but now it’s leaving, too. A sign tells customers the store will reopen Monday at Metro Crossing.
Brett Milkie, Buckle’s senior vice president of leasing, said the Nebraska-based retailer began planning the move last year because the mall “had been going backwards for a number of years.”
“The traffic flow has moved,” he said.
Dillard’s clearance center — the only part of the enclosed mall owned by its tenant, and not Namdar — has no plans to close, according to a manager. Other retailers in the mall, such as Sideline Sports & Tees and Gene’s Toys and Collectibles, are waiting on the new owner to decide whether the property will be revived as a retail mall, restructured or demolished.
Namdar representatives did not return multiple phone calls.
Bluffs Mayor Matt Walsh said he hadn’t been contacted by the firm, which he said had not reinvested in the mall. He said the city has in the past talked to local agents and offered to “brainstorm” a revival, but company leaders never responded.
Last year, the New York entity sought and received City Council approval allowing outlying commercial lots, such as the Hy-Vee and banks, to be sold separately from the enclosed mall. Those unlinked properties are not part of the auction, Walsh said, and a few already have been purchased by their existing tenant.
While some faithful mall-goers say they’ll be sorry if Mall of the Bluffs goes, they’ve watched the exodus of stores and are not surprised.
Indeed, it’s the slow-motion environment that has Rachel Luby, a 26-year-old nanny, toting kids to the mall’s indoor playground area. She works out at the new Planet Fitness gym, which replaced Barnes & Noble. Her parents attend Sojourn Church, which also leases mall space.
Luby said she worked at Dillard’s before it became a clearance store, and she remembers the bustle of the former movie theater. “Knowing how it used to be is kind of shocking,” she said.
Katie Thomas and Taylor Kliminik, who also bring toddlers to the play area, said they’d prefer to shop in their hometown, but can’t help be drawn to Omaha for retailers like Old Navy and H&M.
It’s a familiar pattern, said Barry Cleaveland, chairman of the Bluffs Chamber of Commerce. He said an even older mall in downtown Council Bluffs “pretty much shut down” after construction of Mall of the Bluffs. That former Midlands Mall, built in the 1970s, later turned into today’s Omni Centre Business Park.
Reviving an older enclosed regional mall, said Tron of the shopping-center group, takes finding a new tenant mix competitors can’t offer, or major reinvestment.
Jerry Hoffman of Lincoln, who studies retail real estate and shopping center repurposing, foresees Mall of the Bluffs shedding its current identity in favor of an area that offers a mix of services and uses.
“It’s a far more popular way of developing property today than the single-use retail centers of the ’80s and ’90s,” he said.
He pointed to an effort he is working on in the Colorado city of Westminster, where a demolished mall site is poised to transform into residences, office space, retail and more. It would be a “town center” for the city that never really had a downtown, said the head of Hoffman Strategy Group.
A “second life” for Omaha’s first mall came in the form of offices, said Randy Wieseler, an owner and manager since 1975 of Omaha’s Center Mall near 42nd and Center Streets.
Its fate as a converted mall was sealed as population shifted westward and Younkers pulled out as an anchor, he said.
Today, the Center is a collection of offices, including those of government and social services. Occupancy is just over 80 percent, Wieseler said.
The mall is 60 years old this year. Tenant mix continues to evolve. One small retailer, a convenience store frequented by workers, remains.
Every five years or so, “a good chunk” of the complex is remodeled for a newcomer.
“We’re used to the ups and downs,” Wieseler said.
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