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Business Observer Thursday, Aug. 5, 2021 1 month ago

The future of retail is in question at one of Tampa's oldest malls

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As the massive transformation project at University Mall continues, its leaders are also thinking philosophically: what does the mall of the future look like?
by: Louis Llovio Commercial Real Estate Editor

Sitting on Fowler Avenue, just a mile or so from the University of South Florida, is University Mall. Like a lot of malls, it’s a massive, spread out edifice surrounded by acres of parking spots.

And like a lot of malls, it has seen better days.

University Mall is undergoing a transformation, part fundamental and welcomed, and part quiet and underneath the surface. With ambitious plans and an investment that's already surpassed $100 million, the transformation is also in the spotlight in the region and across the state, as the indoor mall sector figures out what it will be in the next five, even 10 years. 

Yet on a recent afternoon University Mall was as full as any successful mall. Young people hung around the food court as parents watched their kids run around in a play area outside of a Dillard’s Outlet Store.

Shops were not packed with customers and a few clerks stared down at their phones as aisles, but there were shoppers going from store to store. And there were plenty of people carrying shopping bags, always a positive, though informal, indicator of a mall’s fiscal health.

Considering it was barely 5 p.m. on a hot Thursday afternoon in the middle of July, there was plenty of reasons for someone to be optimistic.

As the mall undergoes a massive renovation that’ll make it more of tech and lifestyle center than a traditional shopping center, retailers unsure of their place once the work is done nevertheless feel a buzz — a sense that better days are coming. Mall employees, shop managers and customers all paint the picture of stores hanging strong despite challenges that retail and the mall itself face. They believe the renovation is the kind of rising tide that makes all boats rise.

But the optimism may be misplaced.

Choices ahead

There should be no mistake, not everything is great. One wing is nearly three-quarters empty, there are no traditional anchor tenants and, while there are plenty of familiar stores, a large percentage of the mall’s retail tenants aren’t names most people would recognize.

For every Hot Topic, Lids and Zumiez there’s a Mr. Man, Dyme Clothing and Kids for Less.

Among the mix is a charter school, a karate studio, a nonprofit bike shop and several jewelers. USF’s Institute of Applied Engineering sits next to Tampa Nails & Eyelashes and two doors down from On Site Barbershop. There’s also a House of Hoops, a basketball-themed concept store created by Foot Locker.

Some of the storefronts are without names while a handful look as if they’d fit right in at an upscale shopping center.

To call the selection broad would do the word a disservice.

“I don’t know how well other stores are doing, but we’re pretty consistent, we have a growing crowd. We’re still on the map. They’re just building up more business.” Tony Palmer, assistant manager of My Tobbie Toys & Hobbies

There’s also the fact that Christopher Bowen, chief development strategist for the mall’s owners, New York City-based property giant RD Management LLC, says there is a future for retail in the redevelopment — but it’s not for everyone.

“Is everybody that's there today going to be there tomorrow? No,” he says. “Three and a half years ago we ceased to be a mall. We’re not a mall anymore. We became a community incubator.”

What does he say then, to all the shoppers who believe they are out on a Thursday afternoon shopping at, well, a mall?

“You saw a lot people there, right? People from the outside are amazed that mall is still open. They’re amazed to go inside and see there are actual businesses. Well, guess what? That’s been happening for a couple of years now.”

RD Management's ultimate goal with the massive revitalization of University Mall is to create a hub of innovation-focused tenants, mostly in research, technology and medicine as well as a retail component.

As part of the renovation, the center is being renamed Rithm At Uptown. The moniker, company officials say, is derived from the word algorithm and is an acronym for research, innovation, technology, humanity and medicine.

History in the making

According to the Mall Hall of Fame, a website that documents the history of classic malls and shopping centers, University opened Aug. 15, 1974.

The mall was built by developer Edward DeBartolo, one of three he opened in Florida that year.

Then known as University Square Mall, it opened with four anchors: Maas Brothers, Robinson’s, Sears and J.C. Penney. It had 32 stores and a movie theater.

In 1983, an expansion saw the addition of a 100,800-square-foot Burdines. By then the mall had grown to slightly more than 1 million square feet and more than 130 tenants, according to Mall Hall of Fame.

By the late 1980s and early 1990s, department store chains were being bought and familiar names were being replaced.

This was also an era when anchors stores began to move around or close. Between September 1991 and August 1992, Burdines closed and then re-opened in the space Maas Brothers had occupied and Montgomery Wards moved into the former Burdines space. Montgomery Ward lasted less than a decade and was replaced by Burlington Coat Factory, which remains.

In 1992, the mall was bought by Heitman Retail Properties out of Chicago which began a $48 million renovation two years later.

The next few years brought on changes galore, with the mall changing hands several more times, more remodels and even more openings and closings. During that time, University Mall, like hundreds of once-essential malls across the country, began to see its former glory fade.

RD Management bought the property in 2014 for $29.5 million. Including the acquisition, rezoning, master planning and demolition, RD has invested about $50 million into the property. An additional $65 million is going toward a student housing complex on the site currently under construction.

At completion, Rithm At Uptown will be one of the largest, mixed-use innovation communities statewide, with capacity for more than 7 million square feet of development, including several thousand residential units, RD officials say.

Look ahead

Bowen says the mall’s owners still see retail “as a way to engage the community.” But it’s retail with a twist.

He says the goal it to “not just engage them to buy but engage them to think.”  The approach is meant to give a shopper looking for a shirt the opportunity to ask, “why (do) you want that shirt.”

To make this change, Bowen and his team are asking current tenants to “excel at all the other parts of their business.” This means existing merchants will need to learn how to do business differently, to better source their products and to learn how to better communicate with shoppers.

As for the retailers themselves, they do not have a clear picture of what will happen to the current tenants in the long-term and whether the good feelings now will dissipate. 

They do remain optimistic, though, with many saying they are looking for something good to happen.

“We’ll know when they tell us,” says Andy Fischer of WellBuilt Bikes. “We are the last phase and it shouldn’t affect us, they say, for at least four years. But they’re building up the businesses that are still here to keep them rolling.”

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