Kmart’s plan to close its store at FairOaks Mall has created new questions about viability of the 24-year-old retail property, which was sold last fall after it was threatened with foreclosure.
“I was hoping everything was going to be OK. But when an anchor store goes out, it worries me,” said Ethel Baute, an 83-year-old Columbus resident who shops at FairOaks and works part time for a retailer there.
FairOaks Mall general manager Kim Showalter said the mall can overcome Kmart’s departure, due to occur in late April, and that plans are being crafted to replace the 86,500-square-foot Kmart with other tenants. She said that includes the possibility of nonretail tenants.
“The new owner plans to spend approximately $2 million to update the center and begin a marketing push that could become a rebranding effort,” Showalter said. “We are looking at a variety of potential users for the vacant space that will appeal to the FairOaks customer. Nothing is off the table, including nonretail.”
Showalter declined to elaborate or arrange an interview with any of the mall’s out-of-state owners, including shopping center investor Gabriel Jeidel of New York City, who took control of the property’s mortgage via a negotiated sale that caused lender Wells Fargo Bank to cancel a mid-November foreclosure auction.
“I just question what the new owner is going to do with FairOaks,” said Susan Hashagen, a mother of two teenage girls, who lives six blocks from FairOaks and shops there frequently.
“I’m definitely concerned that it’s going to close, not just because of Kmart, but because of all the smaller stores I see closing as well,” she said.
Last week, 24 of the mall’s 55 storefronts or retail pads were vacant, and two more retailers besides Kmart have announced imminent plans to close.
Christopher & Banks, a Minneapolis-based women’s apparel company, has signs at its FairOaks location indicating that it plans to close the store soon and directs shoppers to go to the chain’s Edinburgh Premium Outlets location after a close-out sale at the mall ends.
Locally owned Petals & Vines, a gift shop, has said it intends to close its store at the mall once its lease expires this spring.
Tara Board, an independent broker with Breeden Commercial/Industrial real estate, said most big-box retailers want to be closer to the street rather than tucked away in Kmart’s location at the end of FairOaks Mall.
“Finding a new tenant to use nearly 90,000 square feet isn’t likely,” she said. “I can’t see another large retailer showing much interest.”
It is more likely a large retailer would instead consider “something directly on U.S. 31 or closer to the street along 25th, not an enclosed mall,” Board said.
Howard Rief, a spokesman for Sears Holdings Inc., which owns the Sears and Kmart chains, declined to discuss Kmart’s lease, when it was due to expire or any other financial details linked to the decision to leave FairOaks within three months.
Non-retail may be option
Board said the mall’s new owners might be positioning FairOaks for some kind of redevelopment plan.
“They seem to buy struggling properties. Some continue to struggle, and at other times they redevelop one successfully. There are going to be wins and losses,” she said.
Jeff Bergman, the City of Columbus and Bartholomew County planning director, said there are still a lot of physical factors that make the general commercial/industrial area around FairOaks attractive for commercial development.
“It’s centrally located, and there are high traffic counts along U.S. 31, 25th Street and Central Avenue,” he said. “There’s a base of customers in the area.”
But big question marks remain.
National retailers such as Sears, Kmart and J.C. Penney — another FairOaks anchor store — are struggling overall as the U.S. economy slowly recovers, Bergman said. And the nearby Dolly Madison baking plant on North National Road remains unused by its new owner — Flowers Foods of Thomasville, Ga. That has left another gaping hole in the midtown Columbus landscape.
Sears, in fact, is closing its downtown Columbus store this spring and is in the midst of a liquidation sale of merchandise there.
“You’ve got a lot of negative factors coming together. Retail companies are struggling nationally. And everything I’ve seen says enclosed malls are overbuilt, or they’re a product of the past decades and people look upon them as dinosaurs,” Bergman said.
Bergman said City Hall hasn’t been involved in any FairOaks redevelopment talks.
“If the owners were planning any physical changes to the site, they’d have to approach us. But we haven’t been contacted by anybody,” he said.
“My understanding is they plan to continue to operate as a mall,” Mayor Kristen Brown said via an email. “I can’t speak to their plans since the city is not involved at all. It’s purely a private business.”
For their part, the two remaining anchor department stores at FairOaks — J.C. Penney and Carson’s — had this to say about their futures:
“There are currently no plans to close the J.C. Penney location at FairOaks Mall,” corporate spokesman Joey Thomas said.
“We continue to monitor all our locations — stores, corporate offices, etc. We have a monthly real estate meeting to discuss leases coming due. We do not disclose any information about an individual location, sales or leases, until we issue a press release to the public,” said Mary Kerr, a vice president for investor and public relations with The Bon-Ton Stores Inc. of York, Pa., which owns the Carson’s chain.
Shoppers express uncertainty
Baute, shopping for sweatsuits for her husband late last week at Kmart, said she’ll be sorry to see the demise of a store that has been around since FairOaks Mall first opened in 1990.
“I also worry about losing the Kmart pharmacy. A lot of people rely on it,” the shopper said.
Baute, who has worked 18 years at the FairOaks’ Hallmark cards store, said the mall’s owners have painted and added fresh lighting to the shopping center’s interior in recent weeks. She takes that as a positive sign, but hopes for more.
“I hope they have big plans. We’d miss it if they closed the mall,” she said.
Maria Hollin, a 72-year-old Seymour resident, was pushing a shopping cart through the Kmart’s aisles on Friday after checking on a flat-screen TV she has on layaway there.
Hollin said she’ll be able to finish paying for the $397 RCA 46-inch television before Kmart closes its doors.
“It’s sad. It’s one of the best stores at FairOaks. Kmart was the first store I shopped at when I moved to the United States 44 years ago from Mexico,” she said. “The prices and quality are good.”
Hashagen, the mother of 17- and 14-year-old daughters, said she was no fan of Kmart, calling the local store “dirty and unkempt.”
But she hopes Fair-Oaks finds renewed life at some point and attracts more shops.
“You’d think Columbus would be big enough to support a small mall,” Hashagen said. “I do come to the mall quite frequently. I work near downtown and can run over here on my lunch hour and not be in a hurry.”
She shops most often at J.C. Penney, Carson’s, Bath & Body Works and Aeropostale.
“I’ve lived in the area 20 years,” Hashagen said. “I remember when the mall was a lot more full. I used to be a Girl Scout leader, and we’d sell cookies here in the winter. Now, there’s not enough (customer) traffic to do even that.
“If there’s any way to save the mall, it’d be so nice to have it full again and operating like it should be,” she said.