Retail casualties
Even as the region’s newest retail developments ink deals with new tenants, elsewhere in the region, communities and retail centers are grappling with a wave of store closings, downsizing, consolidations and relocations. Here’s a small sampling of recent casualties:
• J.C.Penney announced in early January that it will close its Springfield store in the Upper Valley Mall and its Greenville store this spring, affecting 145 employees;
• Macy’s announced in early January that it will close its Upper Valley Mall store, impacting 79 employees;
• Kmart announced in September 2014 it would close stores in Fairborn and Springfield, affecting 134 employees. A few months earlier, Kmart shut down its Xenia Towne Square store, eliminating 57 jobs;
• Ten days ago, Radio Shack declared Chapter 11 reorganization bankruptcy, and the following day, announced it would close 14 stores in the greater Miami Valley, including locations in Xenia, Springfield, Hamilton and Fairfield.
• In December, Big Lots shut down stores in Englewood and Greenville.
• Sears closed a department store and auto center in Trotwood in January 2014, and five months later, a Target store in Trotwood also closed its doors.
Three large-scale retail projects in varying stages of development are poised to change the nature of shopping and dining in southwest Ohio.
The projects — Austin Landing in Miami Twp., Cornerstone of Centerville and Liberty Center in Butler County — are generating hundreds of millions of dollars in investment and creating what will eventually be thousands of jobs. But they may also drain consumer dollars and prospective tenants from existing retail centers at a time when the region’s overall population is stagnant and dozens of the region’s big-box stores are shutting their doors.
“We cannot support all the new developments without hurting some others,” said Thomas Traynor, chairman of the economics department and professor of economics at Wright State University. It won’t be a direct dollar-for-dollar loss, in part because the new projects will draw some consumer spending from outside the immediate region, but other retail centers such as shopping malls and strip shopping centers will feel the pinch, Traynor said.
Cornerstone, Austin Landing and Liberty Center are multi-use developments that include residential and office buildings as well as retail, making their concepts more similar to The Greene Town Center in Beavercreek than to traditional enclosed shopping malls such as the Dayton Mall and the Mall at Fairfield Commons.
The office and residential components a part of these new commercial and entertainment centers generate a ready-made pool of potential customers for the restaurants, pubs, grocery stores, outdoor stores and other retailers that are flocking to the three new projects south and southeast of Dayton.
A fourth large-scale multi-use project, The Heights in Huber Heights, was unveiled in 2011 but has not generated the momentum of the region’s other three large multi-use centers — although this year’s opening of The Rose Music Center at The Heights and last year’s addition of a TJ Chumps restaurant may help jump-start the project.
Dave Dickerson, president and principal broker for the Dayton-based Miller-Valentine GEM real estate and property management company, said developers are following population shifts and demographics in their focus on multi-use projects south and southeast of Dayton.
Retailers, Dickerson said, “follow rooftops and economics,” and residential growth in Warren and Butler counties and in some parts of southern Montgomery county have attracted their interest.
Warren County’s population grew by more than 34 percent from 2000 and 2010, to 212,693, and continued that growth the first part of this decade, adding another 3 percent from 2010 through 2013, according to census data. Butler County’s growth exceeded 10 percent last decade and another 1 percent from 2010-13. The growth has triggered talk of a Dayton-Cincinnati “metroplex” along the I-75 corridor.
In contrast, Montgomery and Clark counties both lost more than 4 percent of their residents last decade, and those losses have continued through 2013.
That population shift and the emergence of the multi-use retail developments along the I-75 corridor are “definitely having an impact on urban and more mature inner-ring suburban communities” and their retail markets, Dickerson said. He cited the former Hills and Dales retail shopping center in Kettering, now mostly professional offices, and the former Van Buren shopping center, also in Kettering, which was redeveloped with a mix of retail and residential.
Dickerson said existing retail stores that have a regional target market “will find themselves in a very competitive environment over the next few years” as new shops and restaurants open in Cornerstone, Austin Landing and Liberty Center.
But those three developments are not simply poaching retailers from other shopping centers. They have succeeded in attracting several new-to-the-local-market retailers — some of which have already opened, others that are in the works.
Cornerstone of Centerville landed the first Dayton-area Costco Warehouse, and also has inked deals with Cabela’s outdoor store, also first in the Dayton area, and the first Bagger Dave’s Burger Tavern in Ohio. Its third anchor store will be Kroger, although it’s not yet clear what impact the new store will have on nearby Kroger stores in Centerville and Sugarcreek Twp.
Austin Landing is the site of a Field & Stream outdoor store, Firebirds Wood Fired Grill and Another Broken Egg restaurant, and in April, a new Chuy’s Tex-Mex Restaurant – each one the retailers’ first locations in the Dayton area. Liberty Center, which has attracted Dillard’s department store and Dick’s Sporting Goods as anchor tenants, has signed leases with Kona Grill and Flip Side burgers, two restaurant chains new to the Dayton and Cincinnati markets.
It’s not clear whether those new-to-the-market retailers would have come to this region anyway. But existing retail centers in the Dayton area are not standing pat in the face of the intensified competition.
The Dayton Mall has added several new tenants in recent years, including two that left free-standing stores nearby to join the mall’s roster. Dick’s Sporting Goods moved into the Dayton Mall in 2012 after the mall built a 19,000-square-foot addition to accommodate the 50,000-square-foot mall anchor store. In 2013, an hh gregg electronics store followed suit. In 2014, former Dayton Mall cinema space that had been vacant for about two decades was filled by popular clothing retailer H&M.
The Mall at Fairfield Commons, which also added an H&M store in 2014, is demolishing a portion of its mall to pave the way for five new restaurants, three of which have been identified or have submitted plans: A BRAVO! Cucina Italiana restaurant, which operates an eatery near the Dayton Mall; and Chuy’s Tex-Mex and BJ’s Restaurant & Brewhouse, both of which also built eateries at Austin Landing.
And just last month, the owners of the Town & Country Shopping Center in Kettering — located about five miles from Cornerstone of Centerville, and about 10 miles from Austin Landing — unveiled plans for a $7 million facelift and extensive renovation, in part to accommodate a new anchor store that owners have not yet identified.
Other older retail centers are struggling, and have taken recent hits that will make their recovery more difficult.
The Upper Valley Mall in Springfield, already facing financial problems, got three doses of bad news in recent weeks with the announcements of the upcoming closure of anchor stores J.C. Penney and Macy’s, and a Radio Shack store.
The mall, which opened in 1971, was already at a financial crossroads after its former owner, Simon Management Associates, defaulted on a $47 million loan. Wells Fargo now owns most of the property and hired Urban Retail, based in Chicago, to manage the site and attract new tenants.
Elder-Beerman, another Upper Valley anchor, closed its doors in 2012, but that space was filled by a satellite location of the Boonshoft Museum of Discovery. Brenda LaBonte, the mall’s general manager, said the mall’s operators will continue to look at alternative uses that would benefit the community.
Xenia Towne Square, which lost its Fulmer grocery store nearly five years ago, saw its Kmart store shut down in 2014. Its Hallmark store closed last month, and a Radio Shack store is targeted with closure. A developer said last week it plans to spend $7 million to demolish the former Kmart and renovate the neighboring grocery-store space into an entertainment center and movie theater.
Serdar Durmusoglu, associate professor of marketing at the University of Dayton, said he believes enclosed shopping malls such as the Dayton Mall and the Mall at Fairfield Commons will be impacted most, over the long run, by the opening of the region’s three multi-use developments.
The Dayton Mall “is putting up a very good fight right now,” Durmusoglu said, noting that its owners built the “Villages of Dayton Mall” consisting of free-standing buildings in front of the enclosed retail center to give that area more of an open-air atmosphere.
The economic recovery and the corresponding rise in consumer confidence and spending will likely help buoy all of the region’s retail centers, new and existing, the UD faculty member said. Strip shopping centers, he said, will face tougher competition, “but I think there will be enough mom-and-pop stores, convenience stores and local shops to keep those smaller retail centers open.”
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