Shopping trends conspire to close Northland mall
Southfield — Northland Center mall, which started the trend of sprawling suburban shopping centers half a century ago, has found itself the victim of shopping trends.
The mall is bleeding nearly a quarter million dollars a month, its owners told Oakland Circuit Judge Wendy Potts on Wednesday, who ruled it was a failing business with no real chance of financial recovery.
The remaining 70 merchants were given 30 days to vacate the mall, which Mayor Donald Fracassi called a "cornerstone" of the city since it opened in 1954.
Northland, one of the nation's first enclosed malls and featuring an iconic Marshall Frederick sculpture of "The Boy and the Bear," was born in an era when the suburbs were booming. Its 110 acres and 1.2 million square feet of retail space served a new, mobile clientele that was moving out of Detroit into growing suburbs.
Mike Bernacchi, professor of business administration who teaches marketing and consumer behavior at University of Detroit Mercy College, said shopping malls are going through great changes — the "remalling of America," he called it — driven by geography, demographics, aging shoppers, major retailers going under and online shopping.
"(Northland) is a museum of shopping excellence," Bernacchi said. "When it was built it was the cat's meow. But that was over 50 years ago."
Driving the changes is the millennial generation and "their mobile devices" doing an increasing amount of their shopping online, he said.
"We are deeply disappointed that the Northland Center will soon be closing," Fracassi said. But, he added, the land is valuable, there have been talks with developers and he is confident the location will be redeveloped in some fashion, "likely mixed use."
"We are very optimistic that this important area of the city will be revitalized by new development or redevelopment plans in the near future," Fracassi said.
Debra Grace, who who operates a dental office in the mall said: "We're devastated. We have patients in the middle of dental treatment."
She said outside Potts' courtroom that one month is not enough time to move, and that six months would be more appropriate.
Attorney John W. Polderman, who represents the mall's receiver, said more time was not an option. He said the mall would be placed up for sale with a broker and a marketing campaign over the next four months.
'It's really sad'
Jerry Michaelson, 77, of Bloomfield Hills was one of many Metro Detroiters sorry to hear of the mall's apparent pending closing.
"It's really sad," Michaelson said. "It was once the premier enclosed mall. There was J.L. Hudson and other stores there, all long gone now, and even a hotel next door. Everyone went there."
Jennifer Washington of Detroit, who was shopping at Northland on Wednesday, was stunned by the news that the mall would close next month.
"It's a punch to the gut," said Washington, who was breaking the winter blues by shopping for some "summer fashions."
"It's sad not just because it's been here for so long but for so many people it's one of the only places they can shop. A lot of people can't get to other areas. I don't know what they're going to do."
Bill and Diane Yagerlener of West Bloomfield Township made a special trip to Northland to take photos inside the mall, spending time admiring the "Boy and Bear" sculpture and the large World War II Memorial plaque honoring all of the J.L. Hudson Co. employees who served during the war.
"Anyone who ever went there probably has memories of the bear," he said of the statue outside of Macy's, which was originally J.L. Hudson's department store. "And the memorial plaque has hundreds of names on it, it's quite impressive. There is a star next to the names of those who died in the war."
Stuart Stein said his optometry business, Dr. Benjamin H. Stein, started by his father in 1956, is the oldest operating business at the mall.
"This is just awful," Stein said. "We have been here for over 50 years and have customers that rely on us. We aren't going to curl up and cry — we will relocate somewhere else but it's going to take some time."
Budget shortfall of $5M
The mall has lost all its anchor stores and has a budget shortfall of $5 million, Polderman said.
"The benefits it has to all — its tenants, owners and the community — are outweighed by the losses," Potts said.
Ashkenazy Acquisition, which bought the mall in 2008, defaulted on a $31 million payment last year and has not kept up with maintenance or needed repairs, according to Polderman.
Macy's announced in January it planned to close its store in the spring. Target said in November it would close its store this month. J.C. Penney left the mall in 2000.
Bernacchi said the loss of anchor stores, which traditionally create the foot traffic needed to make smaller stores successful, is usually the first sign that a mall is in trouble.
Fracassi noted that in the past three years, there have been more than $100 million in private and public infrastructure investment in the area, including $6.5 million in transportation and road improvements, including the new Northland Bus Transit Center.
"Not too many pieces of property have their own bus station," he said. "This is very valuable."
He said nearby Providence Hospital has expressed some interest in the property and said there could be some form of partnership with others.
Northland is the second mall in the county to close in recent months. In December, Summit Place Mall in Waterford Township lost its last anchor store, Sears, and closed up. At its peak, the Summit Place once had 200 tenants, restaurants, a food court and a movie theater.
Summit Place, like other malls, was impacted by several strip malls built nearby, the creation of big box stores and the development in Auburn Hills of Great Lakes Crossing Mall — which recently opened an aquarium — and other shopping areas along Interstate 75.
John Cromer, a leasing manager for Tower Center Mall about five miles away from Northland on Grand River, walked around Wednesday talking to merchants. He passed out applications for those who might want to relocate to Tower Center.
"We have 26 spaces and 220,000 square feet of space," said Cromer, who added he "grew up" at Northland. "I think for many of them we would be a good fit. Many were already packing up today but don't know what they are going to do next. They don't have a Plan B. Maybe we can be it.
"They can still do business in one of Detroit's busiest areas."