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Edina Library
Filling An Empty Shopping Mall

Retail Apocalypse
Hennepin Library To Move To Southdale

June 25, 2019

The Hennepin County Board of Commissioners voted on June 18th to negotiate a lease agreement to move Southdale Library to the nearby Southdale Center. The existing library building will be demolished and sold to brown-brick condominium developers.

Meanwhile, Rojo Mexican Grill closed its Southdale location on June 3rd. Restaurateur Michael McDermott said, “There’s been a lot of changes at Southdale, a lot of people leaving.” Commenting on the library move, he said, “I just don’t think that’s going to draw a lot of people, at least not our customers.

Hennepin County will be locked into Southdale rent at $562,600 for each of the first five years, with increases for the following 15 years.

There had been an artist rendition of the formerly Herberger's space with a library above a restaurant. That has disappeared, because what could go wrong? Restaurant fires result in direct property damage of $165 million annually.

Music Association: Millie Cyrus - Wrecking Ball

Hopes and Dreams

Retail Apocalypse
Saving The Shopping Mall

June 15, 2019

Dinosaurs are gone. There is no good reason to bring them back to life.

Retail is always dying and evolving.

The general store killed specialty stores, which were then hit by the Sears mail-order catalog and mass merchandising. Department stores overtook general stores but were overtaken by mall conglomerations, which were undercut by discount stores like Target and Walmart, which were almost overwhelmed by Amazon.

There are still general stores (in places), and specialty stores, mail-order catalogs, department stores, shopping malls, discount stores, and e-commerce.

When the Mall of America opened in 1992, it was a risk. Nobody knew whether it would succeed or fail. When it succeeded, it changed how the Twin Cities viewed the Dales (Southdale, Rosedale, Ridgedale, & the late Brookdale). The Dales were no longer the pinnacle of shopping experiences in Minnesota. Nearby Southdale (1.2 million retail sq ft) will always be in the shadow of the Mall of America (2.5 million retail sq ft). The Mall of America has 555 stores, an indoor amusement park, and an aquarium. What does Southdale have? Library plans?!?

Developers want the land under the Hennepin County Library near Southdale, which is why it's slated to rent space at Southdale. Southdale would get a tenant with rent money. Hennepin County would get to sell prime land for more brown-brick condominiums.

What are top shopping malls doing to survive?

The most valuable shopping mall* at $5.74 billion is Ala Moana Center in Honolulu, Hawaii. It has an extreme advantage over mainland malls in that there is no land available to build another mall. Its retail area is 2.4 million sq ft with sales of $1,450 per sq ft. Bloomingdale's took over for Sears (closed). Target took over for Nordstrom (moved). Marshalls will replace Foodland. So the Ala Moana anchors are Bloomingdale's, Macy's, Neiman Marcus, Nordstrom, and Target. Discount retailers like Target and Marshalls in the mix signals all is not perfect in paradise. To cater to the Instagram crowd, they have cheesy Aloha Photo Stations.

The largest single-floor sprawled shopping mall is Sawgrass Mills in Sunrise, Florida, valued at $4.1 billion. With 2.3 million sq ft of retail space, it is the 11th largest shopping mall in the U.S. Its anchors are Super Target, Burlington, BrandsMart, TrendMax, Bed Bath Beyond, Dick's, Marshalls, and Century21, plus Neiman Marcus Last Call and Saks Off 5th Avenue. It was closed due to flooding in June of 2017. The Sawgrass Mills survival plan is to keep their heads above water.

The third most valuable shopping mall* is Oakbrook Center in suburban Oakbrook, Illinois, valued at $3.5 billion. Two of its five anchor stores are vacant.

The fourth most valuable shopping mall* is Woodbury Common Premium Outlets in Central Valley, New York, valued at $3.2 billion. Its sales per square foot of $1,624 is one the highest in the country. As an outlet mall, its anchors are Saks Off 5th Avenue, Calvin Klein, Nike Factory, Tommy Hilfiger, Ralph Lauren, Under Armour, and Gap Factory. Traffic jams are their main problem. Their plans to survive are to build two hotels, a new parking deck, and a helipad. They will survive.

The fifth most valuable shopping mall* at $3.06 billion is Fashion Show in Las Vegas, Nevada. Its anchors are Dillard's, Macy's, Macy's Mens, Forever 21, Neiman Marcus, Nordstrom, Saks 5th Ave, and Dick's Sporting Goods.

The sixth most valuable shopping mall* at $2.92 billion is Tysons Corner Center in McLean, Virginia, a suburb of Washington DC. Government employees and contractors spend $980 per square foot at Tysons. Its anchor stores -- Bloomingdale's, Macy's, Lord & Taylor, and Nordstrom -- will be enhanced by plans of adding a 7-Eleven!

Compared to Fashion Show with $975 of sales per sq ft, the Forum Shops at Caesars has $1,616 of sales per sq ft, due to its direct connection to Caesar's Palace. The seventh most valuable shopping mall* at $2.79 billion, allows gamblers to get something in return.

King of Prussia Mall is the largest shopping mall in the U.S. at 2.6 million sq ft and the eighth most valuable* at $2.77 billion. The Pennsylvania mall is anchored by Bloomingdale's, Dick's Sporting Goods, Lord & Taylor, Macy's, Neiman Marcus, Nordstrom, and Primark, with one vacant anchor store last occupied by JCPenney.

All of those shopping malls are Real-Estate Investment Trust (REIT) owned, as indicated by the asterisk (*).

Now imagine a family-owned mall with 105 stores (100% full), including Neiman Marcus and Saks Fifth Avenue as anchors, $3,010 of sales per sq ft, and a waiting list of stores wanting in. That's Bal Harbour Shops just north of Miami Beach, Florida. You can't afford to go there. How do I know? You are reading about shopping malls with problems. That's not their problem. They don't care.

None of these shopping malls will be putting in a library.

Music Association: Gloria Gaynor - I Will Survive
* REIT owned shopping malls

Hopes and Dreams

Retail Apocalypse
Moving Into A Shopping Mall

June 14, 2019

A letter complaining about Trump's 25% tariff taxes on goods from China was sent yesterday to President Trump. Two key sentences of the letter explain: “Broadly applied tariffs are not an effective tool to change China's unfair trade practices. Tariffs are taxes paid directly by U.S. companies, including those listed below -- not China.

The one-page letter was signed by 14 pages of stores, companies, port authorities, and trade associations, including:

Active Brands
Ralph Lauren
American Eagle
Designer Brands
Jo-Ann Stores
Levi Strauss
Tomy International
Eddie Bauer
Pier 1 Imports
Regal Games
Urban Outfitters
Columbia Sportswear
Foot Locker
J Crew
LA Gear
Pacific Sunwear

At the end of 2018, shopping malls had a vacancy rate of 9%. Store closings increased in the first quarter of 2019. Over 6,000 store closures have been announced in 2019, topping all of 2018. The economic bumblings of our president couldn't have happened at a worse time for retail. There are about 1,100 malls in America, with about 800 vacant anchor spaces.

Ships Without Anchors
Southdale Mall, the first enclosed shopping mall, opened in Edina, Minnesota in 1956. It has three vacant anchor spaces. The Herberger's department store closed in 2018 as part of the Bon-Ton Stores bankruptcy. And JCPenney and Gordmans also closed anchor stores at Southdale.

Southdale plans to replace JCPenney with a LifeTime Fitness, which is funny because the mall may no longer last a lifetime. And sure, it's foot traffic, but those feet keep moving.

They also plan to demolish the Herberger's building and build a half-size replacement of the Herberger's building for the Hennepin County Library near Southdale.

Hennepin County Library near Southdale in Edina MN

The Hennepin County Library near Southdale is the fourth most visited library in the county with 303,316 visits in 2016 and 329,550 visits in 2017. The Le Corbusier inspired building opened July 25, 1973 and has been a jewel in the Hennepin County Library system ever since. Condominium developers are salivating over the land under the library. The plan is to tear the library down, move it to the mall, and pay retail rent. What could go wrong?!?

Hennepin County Library at Southdale (Edina, MN)

Music Association: Semisonic - Closing Time

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