Saturday, August 4th, 2007
It is looking more and more likely that the City Center Mall in Columbus is facing its last days. The city of Columbus has filed suit seeking to evict the Mall’s operators. Their cause of action is a failure to pay $200,000 in rent.
City Center Mall appears to have one of those overly complex structures that downtown projects are famous for. The city apparently owns the site and has a ground lease with a company called TL-Columbus Associates. The Mall is in turn operated by Indianapolis based Simon Property Group, which acquired the rights when it bought the bankrupt Mills Corp. Simon expressed surprise about the lawsuit, saying that they had been in advanced negotiations to sell the mall to a group of local developers, including Don M. Casto III. For its part the city says that it was blindsided by Simon’s failure to pay rent. The city desires to lease the site to Nationwide Realty, part of the insurance group and the force behind the successful arena district. If I were to speculate, this move by the city indicates they didn’t like the team that Simon was looking to sell to, and intervened to try to insure their favored group got the nod.
Not everyone is happy about this. Simon is the biggest mall developer in the country, and Casto has deep pockets as well. Some suggest bringing Simon on board instead of alienating them might have been a better move. Simon’s experience with the more successful Circle Centre project in Indianapolis shows that they do has some track record with successful downtown retail in a city like Columbus.
It strikes me as likely that the city will end up with control of the site. It also very much looks like the Mall will not survive in its current form. The president of Nationwide Realty said it would likely be some sort of a combination of shops, officies, and residences. The managing director of the Polaris Chamber of Commerce says he can’t imagine any reuse that doesn’t involve demolishing most of the mall.
We’ll have to see what happens. A retrospective on the mall’s failure would be an interesting case study. I’m not close enough to it to be able to offer anything definitive. But I’d suggest a couple of points, some of which I highlighted earlier when comparing this to the Indianapolis situation.
The first is that the enclosed Mall is no longer the favored retail format. Today “lifestyle centers” are the rage, and you aren’t seeing a lot of new enclosed malls built. In fact, many existing enclosed malls are now adopting lifestyle center type components, and some are even demolishing anchors to make way for them.
Also, another key trend is blending higher end dining and entertainment with shopping. Circle Centre in Indy had numerous upscale restaurants and became the focus of a major dining district downtown. City Center did not.
City Center also struggled because Columbus built a number of brand new suburban shopping malls like Tuttle Creek and Polaris after City Center opened. The 90’s saw a veritable boom in enclosed mall building there, perhaps representing the last great enclosed mall expansion nationally. Contrast with Indy where all of the suburban malls were long established, and thus somewhat dowdy and down at the heels when Circle Centre opened. Even today, Circle Centre is the newest enclosed mall in the city, while City Center in Columbus is one of the oldest. That’s a big difference.
Also, the location south of the core of downtown hurt the Mall. With the Arena District, Convention Center, and reborn Short North all north of downtown, the center of gravity, particularly for visitors and entertainment, shifted to the north, leaving City Center out in the cold. Had it been located next to the convention center, I believe it would have been a very different story.
The failure of City Center is going to put a crimp in downtown Columbus retail for a long time. That seems to be the most difficult component to get to work. Basically, cities the size of Columbus don’t have enough upscale downtown population to make significant retail work, and the won’t have it any time soon. Even 2,000 or 3,000 condos wouldn’t be enough to create a base to support a mall. Downtown retail failed in Louisville (the Galleria) and appears to be failing in Cincinnati as well (Carew Tower Mall). Even Circle Centre has some serious cracks in the facade if you ask me, and I believe it will suffer significant struggles over the coming years. It is not beyond question that it could suffer City Center’s fate. For Columbus, downtown dining and entertainment, along with more mixed use complexes, appears to be the best bet for now.