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Somebody can correct me if I'm wrong, but I think Penney's owns its building. All 4 anchors owned their spaces when the mall originally opened. CURA bought Montgomery Ward's building when that chain went OOB. Forest City bought the Macy's building fairly recently and leases it back (apparently for $0, if the Mayor is to be believed, but that's not unheard of in instances where the anchor doesn't own its space).
As far as I know, Sears still owns its building too, which complicates anything happening there -- it's ultimately not mall management's call.
Wow. I never heard of providing a huge rent free space to a retailer so they would stay someplace. That is a whole lot of overhead to eat there. Imagine the cost involved with providing maintenance and security services for that large space, plus the taxes and insurance costs involved with the property. The net benefit is a relatively small number of low paying jobs and something to keep the smaller retailers from fleeing the ship, but at a major cost.
No kidding, even Apple still pays (a highly reduced) rent at their locations. I'm pretty sure Apple stores have more of a regional draw than does a Macys when the next town over also has a Macys.
Are there any city subsidies involved with this, or is it all a cost absorbed by the mall owners?
I would think that operating a mall with the largest spaces being given away for free at some point would make the operation a money losing proposition and they would just close up shop and walk away.
Also, the retailers are competing with each other. There would be a significant competitive disadvantage involved with paying the entire costs of operating a building compared with the other firm getting rent free occupancy and getting freebies just for staying.
This article only reinforces what many of us have suggested and posted regarding ways to help existing shopping malls and centers attract and retain shoppers. The existing empty Sears space would be great for most of the suggestions listed in the article.
Probably the best thing that could happen to CTC. I was the assistant on a hotel going through receivership that lasted four years looking for the perfect buyer once the property was well-into the black. We made major improvements, I restructured, well, everything from the ground up. Almost all new staff, new policies, new business contacts all new, new, new. We had a great company behind us that had handled many receiverships in the hospitality industry and that certainly helped but what made it work was that we got rid of the old business model that was held together by personal gain and not property profitability.
Getting rid of everyone that drove CTC into the ground is a big move forward - IF - they have the right company and the right team to lead them out. The city can't go to sleep on this and frankly, I have a low opinion of the city in regards to CTC. The city has let CURA do far too much with this and a lot of what has happened took place behind closed doors in UN official meetings. At least half of the people that made this mess are still going to be there - CURA.
But, all things considered, this is the best current move the mall can make. I would expect 6 months to a year of a whole lot of nothing as the new company and staff comes in and evaluates. If I were a business in the mall, I would now know that my rent is likely to be reduced to 50% and all of the anchors are going to be there free of charge. Being in receivership gives the new management team access to many tools that a conventional operator does not have, but they need to have a plan yesterday on what their goals are, changes to be made and roughly who they are targeting as a buyer.
My goal when I took my turn at this sort of thing was to raise the quality and dynamic flow of the property. I raised the hotel from a 1 star ranking - there is no, no star ranking, so yeah, it was bad - to a 4 star ranking. May not seem like much but Charleston has no 4 star hotels in it now. All the big ones here are just 3 star hotels and I would say that all of them barely quailify as a 3. If they follow suit at CTC similar to what I did, we can expect a lot!
I agree. This is probably the best right now for the Town Center. Hopefully lowered rents will help draw new business, but until the mall gets new owners I doubt there will be much change.
CURA should be fired. Things should have never gotten this bad under their watch along with City Hall. Sad and embarrassing for the city to allow things to get this way. Obviously the mall owners share the burden of the blame but the $7.5 million loan to Dillard's and I think it was a $1 rent was the pivotal point as to where this mall was headed.
With the vagrant situation in Charleston getting worse with no resolution in sight for that and retail changing so rapidly I don't know if a buyer will be willing to invest in the mall. Big changes need made in Charleston I would think in order to find a buyer to make a commitment to invest in the CTC.
I've said this a hundred times, but the city needs to keep attracting people to live downtown and in city limits. Charleston's CBD and the CTC can flourish with people living in closer proximity. Look at all the successful smaller cities, they all have young people living downtown in new mixed use developments. I think redeveloping the Sears Auto site and the eye sore corner where Sears Monument is (beside Holiday Inn Express) into 4-5 story apartments with a parking structure built into the middle, and commercial space on the first floors would be a great location for young professionals. That would be a huge shot it the arm for the mall. Then the Sears space would serve as a nice space for multiple medium sized anchor stores. Trader Joe's, LA Fitness, Nordstrom Rack, etc...
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