The stores that were once destinations and some of the most prominent retailers in the Miami Valley began struggling from declining traffic followed by fewer sales. Eventually Bon-Ton filed bankruptcy in February 2018 and Sears followed suit in October.
The Elder-Beerman and Sears at the Miami Valley Centre Mall in Piqua, both department stores at the Upper Valley Mall in Springfield, the Elder-Beerman at the Mall at Fairfield Commons, both Sears and Elder-Beerman at the Dayton Mall, the Trotwood Sears and the Kettering Elder-Beerman stores remain without confirmed long-term tenants.
Meanwhile strip mall stores like the Huber Heights Elder-Beerman and the Elder-Beerman Furniture Gallery in Miami Twp. were some of the first to take on new tenants, likely because of their visibility and close parking, Saddlemire said.
An At Home store opened in the Huber Heights location in May, and a Big Sandy Superstore is in the process of renovating the Miami Twp. furniture store for an October opening.
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Owners of the Beavecreek mall found success filling the space where Sears was located. The former Sears location is being split with a new Round1 Entertainment on the first floor and the second floor will have The RoomPlace, an Illinois-based furniture store. Both are expected to open later this year.
But other vacant mall spaces, sometimes spanning more than 200,000 square feet, could be harder to fill.
“There just aren’t that many big anchors anymore. The department stores have been feeling the pinch for quite a while. It’s changing consumer tastes, it’s the internet, it’s a lot of things, so I think the mall owners have had to be more creative in figuring out how they reinvent themselves and how they fill these spaces,” Saddlemire said.
Department stores decline
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Elder-Beerman was once a staple in the region, stemming from an 1883 advertisement in the Dayton Daily Journal announcing the establishment of the Boston Dry Goods Store, owned in-part by Thomas Elder. The venture became the Elder & Johnson Company in 1911. Later Elder-Beerman was established when the company merged with Dayton’s Beerman Stores.
Bon-Ton acquired the company in 2003 for $92.8 million at a time when the local store had just exited bankruptcy. It remained a huge part of the community, employing hundreds at its mall anchors and other stores, along with its Fairborn Distribution Center before it moved to West Jefferson, Ohio, in 2014.
Now both Elder-Beerman and Sears operate at a fraction of what they were in their primes.
Bon-Ton, purchased by tech company CSC Generation, only conducts business online, hoping to open some stores in other states. Sears has about 400 stores, and is focusing on smaller formats, after emerging from bankruptcy when former chairman and CEO Eddie Lampert’s hedge fund ESL Investments bought the company.
Thousands of other stores have also closed in the past year, with Coresight Research expecting a record number of stores to shutter in 2019. At 7,922, U.S. store closures have already surpassed last year’s total and are on pace to break records.
“Over time, buying habits change. We are no longer reliant on the need to get in the car, drive to the mall, find a place to park in the massive parking lots to buy a shirt,” said Rick Tebbe and Linda Kreider, local commercial real estate agents with Keller Williams Home Town Realty.
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How malls are filling the space
Some shopping centers like the Mall at Fairfield Commons have found success in looking to non-traditional options to fill space, including its upcoming entertainment concept and furniture store.
Entertainment concepts are one of the few that are successful and can fill major square footages. Malls have also looked to senior living, apartments, hotels and splitting up big boxes for smaller retailers.
“These new, differentiated anchors are expected to draw a significant increase in guest traffic, benefiting existing tenants and generating strong leasing demand for new uses in the future,” said Leanne Rubosky, general manager.
The mall’s owner, Washington Prime Group, is also in “active planning and negotiations to transform the former Elder Beerman space,” Rubosky said. Replacement tenants will likely include retail uses.
In the meantime, Halloween City will open Sept. 1 through the end of the Halloween season, something other malls, including Piqua’s Miami Valley Centre Mall, are utilizing to temporarily fill the vacancies. Both Fairfield Commons and Miami Valley Centre own their Sears and Elder-Beerman buildings.
“We are currently marketing these boxes for lease and entertaining offers on either of these two boxes as well as our other vacancies,” said Paul Shand, director of retail properties for Mid-America Management Corp., which owns the Piqua mall.
The Sears at the Upper Valley Mall in Springfield will also be a Spirit Halloween pop-up this year.
Struggles of filling mall spaces
Clark County spokesman Michael Cooper has cautioned that there are no official redevelopment plans for the Upper Valley Mall, which has descended from its days as a shopping hub after longtime anchors like JC Penney, Macy’s, Elder-Beerman and Sears have closed doors.
Yet Home Plate Sports Academy, a mall store, posted on Facebook saying owners had spoken with the county land bank, which owns most of the mall, and a sports complex was coming to the shopping center along with other multi-use components like a movie theater, hotels, trampoline center and restaurants.
But the county doesn’t own its Sears. The building previously owned by SRC Facilities, a Sears affiliate, was recently handed over to TF Springfield OH, an LLC registered at the same address as ESL Investments, the hedge fund owned by Lampert, according to a Dayton Daily News investigation of property records.
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Shopping centers that don’t own their anchor buildings can face significant hurdles in refilling the spaces without control of them. The Trotwood Community Improvement Corporation bought all of the former Salem Mall and demolished it in 2006.
The city had plans to redevelop the site into a mixed-use development, but without control of the Sears, weren’t able to move forward. The city recently learned it was the prevailing bid to buy the former Sears out of bankruptcy.
The Dayton Mall, owned by Washington Prime, also doesn’t own its Sears or Elder-Beerman buildings. Seritage Growth Properties, a real estate firm that was spun off from Sears several years ago, owns the Sears location and third party Elder-Ohio, a trust registered in Delaware, owns the Elder-Beerman building, according to Montgomery County records.
“Our planners are continuing to work alongside mall ownership to evaluate options and opportunities for development of the mall property. While our discussions are positive and forward-thinking, we’re still considering development that will benefit the Miami Crossing District and the Dayton Mall property, whether it be retail, office, restaurants, residential or recreation,” said Chris Snyder, community development director for Miami Twp.
Dave Duebber, general manager of the Dayton Mall also acknowledged that mall ownership is working to leverage redevelopment opportunities, but without control of the boxes, plans haven’t come to fruition.
The upcoming RoomPlace and Ross Dress for Less stores filling closed Old Navy and hhgregg locations are considered new anchors for the Dayton Mall and are expected to draw a “significant increase in guest traffic,” said Dave Duebber, general manager of the Dayton Mall.
The increasing cost of construction with rising material and labor costs also prevents potential tenants from looking at mall anchor stores. Rent is traditionally higher, and malls looking to pass on the high cost of renovation often want to charge more per square foot than retailers and other potential tenants are willing to pay, Saddlemire said.
Saddlemire has a client who wants to be in Beavercreek, but doesn’t even want to consider the empty Elder-Beerman box because it doesn’t have the visibility from the road, something that wasn’t even considered when malls were designed because the foot traffic was enough, he said.
“As Realtors, we can’t put anyone in these humongous spaces,” Tebbe and Kreider said in a statement. “They are cost prohibitive.”
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By the numbers:
7,922: Retail closures this year
12,000: Expected store closures this year
9: Vacant Miami Valley Elder-Beerman, Sears stores
200,000: Square feet of some Elder-Beerman stores