Twelve miles separate The Mall at Green Hills and Hickory Hollow Mall, but the news Jan. 5 showed the two shopping centers are operating in completely different universes.
It was a banner day at Green Hills, the tony west Nashville home of high-end shops Brooks Brothers, Burberry and Buckle. With the Christmas season behind them, mall officials announced a ground-breaking on the long-awaited Nordstrom, the Seattle-based luxury department store.
“We are excited to reach this major milestone,” said Hank Woerner, manager of the mall, which is owned by Davis Street Land Co. out of Chicago. “Not only does this mark the first major department store to be built in Nashville in several years, but it also puts The Mall at Green Hills on the national map.”
Meanwhile, at Hickory Hollow, managers had gloomier news. Five tenants — Chick-Fil-A, The Children's Place, New York & Company, Lane Bryant and Hot Topic — all confirmed they would shut shop before the end of this month.
The wildly different fortunes of these centers provide the starkest example of how the mall business in Nashville is all over the board. While Green Hills expands and Hickory Hollow wheezes, RiverGate Mall is in a three-way fight for market share, 100 Oaks is riding a new wave of energy and a mostly-empty Bellevue Center shell sits in limbo.
The various directions of these shopping centers have been established or several years, but the Great Recession has made them all the more glaring. Going forward, their owners will need to re-evaluate how they use their space, said Ken Renner, vice president of commercial sales and leasing for Nashville-based Vastland Realty Group.
“It’s going to be a very competitive environment at the end of the recession. People who had space in the pipeline … it’s on hold or if it’s built, it’s vacant,” he said. “There’s a lot of overhead that will have to be absorbed. There’s going to be a lot of adaptive re-use going on.”
Different paths, different values
Woerner said Nordstrom is a big score for the mall, which hopes to be in a position as not just Nashville’s high-end shopping destination, but as a place that can pull shoppers from across the Mid-South.
“We keep moving The Mall at Green Hills forward and expanding into more and more of the luxury shopping realm,” Woerner said, whose team also had added valet parking services and regularly recruited new tenants since announcing Nordstrom’s plans in the spring of 2008.
But just a dozen miles away, Hickory Hollow scrambles for tenants.
It should be said that comparing Hickory Hollow with its most upscale compatriot is not altogether fair. They exist in census tracts with wildly different demographics and income levels and to say there is not a lot of crossover between Brooks Brothers and Hot Topic is an understatement.
Renner adds that it’s not just different income levels which determine the success of a mall. The nature of the neighborhood can have a big effect.
“If you look at shopping centers located in stable areas, they can be more successful than those in areas with large incomes,” he said. “In many cases, the difference in $60,000 and $80,000 [in annual income] is not as a great as the difference in a stable community and a more transient one.”
One method to determine a mall’s relative success is to compare property appraisals. In this regard, The Mall at Green Hills tops all the other malls in Davidson County. “They have the best sales of any of the malls,” said Curtis Oaks, an appraiser with the Metro Property Assessor’s office.
Oaks and his office see the numbers when establishing the value for tax purposes. Metro has just appraised Green Hills at $113 million. By comparison, Hickory Hollow was appraised at $30.2 million, a mere fraction of not only Green Hills, but of its former self: The mall was appraised at $71 million in 2005.
It’s all about reputation. Green Hills has spent years grooming its cachet as the place to shop in Nashville. Hickory Hollow’s reputation is far worse — reports not just of store closures but security concerns last year led U.S. News and World Report to put Hickory Hollow on its Top 10 Most Endangered Malls list.
While Green Hills is adding a new anchor store, two of Hickory Hollow’s four anchor spots are empty. The movie theater at Green Hills provides a mix of blockbusters and limited-release critical darlings; Hickory Hollow’s theater no longer shows first-run films.
At RiverGate, the dynamics are different again. The opening of The Streets of Indian Lake in Hendersonville and big-box Providence MarketPlace in Mt. Juliet has pulled shoppers from the northern and eastern suburbs away from RiverGate, but mall managers said it’s not proving to be problem.
All four anchors remain at the 39-year-old center. And, while wealthier suburbanites may indeed choose to shop in the new higher-end shops in Sumner or Wilson counties, RiverGate is holding its own by focusing on more solidly middle-class consumers from Goodlettsville, Madison and North Nashville, said Dana Katterjohn of mall owner CBL & Associates, which also operates Hickory Hollow and CoolSprings Galleria.
That approach has staved off the exodus of tenants seen at Hickory Hollow. Also helping is the absence of a department store at the outdoor The Streets of Indian Lake “lifestyle center,” meaning Sumner Countians still have to trek down Vietnam Veterans Boulevard to shop at Macy’s or Dilliard’s.
In fact, those retailers that have left RiverGate were more reflective of national troubles: Linens & Things, B Moss, Bombay, KB Toys, Wilson Leathers and Whitehall Jewelers all declared bankruptcy and closed their RiverGate locations in the past two years.
For now, RiverGate is in good shape with a vacancy rate of 8 percent and an appraised value of $70 million, both fairly steady numbers. Despite its new competition, it does not look to be a candidate for a reimagining like two of its brethren.
An overhaul is in order
Already successful is 100 Oaks. Nashville’s first enclosed large-scale shopping space had a much ballyhooed opening more than four decades ago, but after the much-larger Hickory Hollow and RiverGate malls opened in the ’70s, it struggled. Problems truly hit in the ’90s, when the outlet stores that kept it alive fled to the new outlet center near Opryland to be replaced by big-box stores.
By all accounts, the first floor of the mall stayed successful as the upper floors wasted away. In stepped Vanderbilt University Medical Center in 2007, signing a lease for the second and third floors and the adjacent office tower.
VUMC announced ambitious plans to relocate 20 departments from West End and open some entirely new clinics at 100 Oaks. Vanderbilt Police took over security and mall tenants scored an audience of potential shoppers who otherwise may have never ventured to the Thompson Lane area.
VUMC has almost completed its move to 100 Oaks — only some rehab work at the office tower remains unfinished — repurposing the four-decade old mall into a mixed-use destination. The move has been a boon for the mall and the tax rolls. In the past four years, the value of the property has more than doubled to $106 million, making it the second-most valuable mall property in the county.
A similar mixed-use future has been floated for the failed Bellevue Center. Only Sears’ remains at the 848,000-square-foot northwest Nashville space, but an ambitious $130 million renovation was announced nearly three years ago. The developer, California-based Foursquare Properties proposed a plan to change Bellevue into an open-air center, similar to The Streets of Indian Lake or Murfreesboro’s Avenue. The project came complete with plans for a badly needed new Bellevue branch of the Metro Public Library, a move that helped the company secure tax-increment financing.
For now, though, the plans have yet to move forward. Foursquare’s local representation, James Weaver, an attorney at Waller Lansden Dortch & Davis, says the company is still committed to revamping the failed mall.
An overhaul is likely the future of Hickory Hollow as well. According to CBL’s most recent annual report filed early last year, the 1.1 million-square-foot center had an 18 percent vacancy rate at the end of 2008 — a number that is likely to be a good bit higher this year.
In December, the Metro Council scuttled a VUMC-lite plan to locate a Metro Health Department Women, Infants and Children clinic there. An ordinance that would have launched such a facility inside the struggling mall has been deferred indefinitely at the request of District 32 Councilman Sam Coleman, who represents residents near the mall.
Coleman said the decision to move for deferral came the day after a spirited community meeting attended by more than 150 residents, the majority expressing disapproval of using the mall to house the clinic.
The health department’s WIC program provides nutrition education to low-income pregnant and postpartum women, infants and children five and younger at its three Davidson County facilities.
The department’s hope was to add a fourth WIC clinic at Hickory Hollow, but most neighbors said it have an adverse effect on the mall’s business and surrounding property values.
A better-received plan is for fast-growing Nashville State Community College to open a South Nashville campus, likely in the mall anchor spot formerly occupied by J.C. Penney’s.
“It's win-win for the university because I'm sure there are students in this particular area who want to take advantage and don't have to go as far," Coleman said. "It's a win for the community.”
Brent Young, Nashville State’s director of institutional development, pointed directly at the success of the Vanderbilt-100 Oaks partnership.
“It could really revitalize this area much like Vanderbilt did at 100 Oaks Mall,” he said.
Katterjohn said the mall is in negotiations with a number of potential tenants.
“Overall, we’re just opening up the possibilities of who would be a good fit for our centers,” she said.
And Renner said the key to success may be mall operators being more receptive to what a “good fit” means.
“A lot of times, a big box is more adaptable than a mom-and-pop shop. You may not want to bring in a non-retail use for the smaller space,” he said. “But now you may just want to fill the space.”