Note: This page has been corrected from the original version to show the correct names of HobbyTyme and Kluh Jewelers.
"We're not dead."
Those are the words of Sonja Burton, owner of Key Note Studio which moved into the Lewis County Mall in July 2003. A piano teacher since 1990, she started up a retail business in 1999 in the Yardbirds Mall to accompany it. First, however, she looked at the Lewis County Mall.
"The rent was pretty high," said Burton. "When all the big stores moved out I thought there might be the possibility of smaller space with less expensive rent."
Burton is representative of the current mall tenants; a local business rather than one of the national chain stores that used to lease so much of the mall space.
In 1999, J.C. Penney closed its mall store. Their closing led the remaining tenants into a defensive posture according to Terry Harris, owner of Aloha Paradise Family Hair Care and a member of the Chehalis City Council. Harris has worked for Aloha Paradise for more than nine years and purchased the hair salon in 2000.
"What we had was a mass mistake made by business owners and managers," said Harris. "They immediately wanted to retract. They shortened up their work day. They retracted more and the dollars decreased. I think there was a whole attitude change. You saw the businesses, rather than being progressive and aggressive, they became concerned, almost frightened."
Over the course of several years Maurice's clothing, Payless Shoes, Hallmark, Radio Shack and Harry Ritchie Jewelers moved to the Twin City Town Center while HobbyTyme and Kluh Jewelers moved to the Fairway Shopping Center in Centralia. That leaves the mall with Sears as the only national retailer, the rest are local.
It hasn't all been spaces going empty. WorkSource, which assists people in finding employment, took over the J.C. Penny space in 2000. While a government agency paying rent likely made the mall owners happy, mall retailers have their doubts about the unemployed frequenting their stores.
Likewise, the Department of Health and Social Services has announced it will move into 16,000-square-feet in the mall. Construction on the space is scheduled to start in the next two weeks.
More likely to benefit mall retailers is an Ashland, Ore., theater chain which intends to begin construction on a 10-screen theater in the now empty 34,000-square-foot space which Rite Aid vacated last month. Contracts are to be finalized in the near future with construction scheduled to start in January and be completed by May. Mall retailers are united in their hope for increased traffic when the theater is complete.
"If the mall's plan for the theater happens, when that happens the traffic is going to start increasing," said Dennis Evans, owner of Spa Factory Outlet.
"After the theater and government agencies move in, we'll be filled up," said Burton. "If we can maintain staying filled up, I think we'll have a pretty good mixture."
While the mall is hardly moving away from retail, a diverse mix of tenants is not by accident. Over the years competition has increased: the Centralia Outlet stores, the evolving downtowns of the Twin Cities and, most mentioned, Wal-Mart and the ever-increasing Twin City Town Center.
"We're striving to provide complementary elements of services, retail and entertainment," said Joe Rosbach who has been mall manager since 1997. "I think initially the mall was strictly retail oriented. Times have changed."
Bringing in the right tenant mix is a challenge.
"It's a tough game out there to attract tenants," said Rosbach. "The first thing they look at is traffic. Our main focus right now is to bring in customers to see what they have to offer."
Customers, however, come to the mall based on their perception of whether there are retailers.
"Their vision of the mall is that the national tenants are gone and the mall has nothing to offer," said Rosbach. "That's not true."
The mall currently has 14 tenants although four on the west end (Sears, Sears Shoes, Sears Portrait and Miracle Ear) all belong to one company.
Of those, several consider themselves destination businesses rather than businesses that customers happen to see as they are passing by.
"You have to have a base clientele," said Harris. "That's your meat and potatoes. Walk-in is your gravy."
How are other malls doing
Enclosed malls are a relatively recent phenomenon. The first one, Southdale, was built in Minnesota in 1958, though malls didn't really catch on for another decade. The Lewis County Mall was built in 1972.
"The 70s and 80s were really the hay day of building malls in the country," said Patrice Duker, spokeswoman for the International Council of Shopping Centers, a membership organization that includes 1,130 of the largest malls in the country.
About 15 years ago the Lewis County Mall was purchased by a Minnesota partnership that hired Urban Retail Properties of Chicago to manage it.
By ICSC standards, the Lewis County Mall is on the small side with 154,000-square-feet, of which a total of 135,000 may be rented.
Malls accompanied the outward migration of people from large cities to the suburbs. Their mall developers found large chunks of relatively inexpensive land. Nowadays malls typically draw from a 25-mile area.
On a national level large malls (400,000-square-feet or more to rent) are doing well. From 2002 to 2003, shoppers have increased their average shopping time from 72 minutes to 83 and average expenditures from around $70 to $84.
"Consumers went to wholesalers and discounter because they were looking for ways to save money during the recession," said Duker.
The occupancy level of the big malls, as of June 2004, was 91.8 percent filled. There are always a certain amount of vacant space as leases are staggered to end at different times. Some malls also leave space for temporary seasonal stores. Large mall rents have increased. And about 10 percent of malls have a cinema as an anchor.
The pace of building malls has slowed. Instead developers are investing more money in remodeling.
The future
The mall will continue to hold activities to bring in people including craft shows, car shows, nonprofit activities, book sales, blood drives, rose shows, cat shows, trick or treating and, just arrived, photos with Santa Clause
In the long run, Rosbach would like to remodel the front of the mall containing retail with its own doors and display cases (currently it is a brick wall excepting the mall entrance and Sears) while the south portion would contain the less attractive office space. He'd also like to see the mall modernized with new fixtures, lighting and floors.
Rosbach would like to attract a restaurant along with more retail. The focus, however, will continue to be on local retailers and perhaps the smaller national chains.
"We're not going to attract these big national tenants," said Rosbach. "When they have the revenue to back them up, they go to the highway for the exposure. That's something we can't offer. We feel the direction the mall is going is for the mall's best interest and for the community. It gives small business owners the opportunity to establish their businesses. Hopefully the community will understand that and support us."
Mark Lawton covers economic and energy issues for The Chronicle. He may be reached at 807-8231, or by e-mail at mlawton@chronline.com.
