When Oak Park Mall landed Nordstrom department store two decades ago, it was seen as a major upset over rival Country Club Plaza, which also was trying to snag the upscale retailer.
Nordstrom’s three-story, 200,000-square-foot store also launched a new Oak Park Mall wing that would include 44,000 square feet of additional retail and helped set the Overland Park mall as a destination shopping center with exclusive tenants that would draw away Plaza customers, tenants such as the area’s only American Girl and Lolli & Pops.
But the tables have turned. In three years Nordstrom will move from Oak Park Mall to the Plaza and leave mall owners scrambling to fill a massive department store space when most department stores are downsizing.
Nordstrom’s departure will clearly be a challenge, said Mike Berenbom, vice president for investments with the Lane4 Property Group, a prominent Kansas City real estate firm.
“It’s clearly not good news for the mall,” Berenbom said, although he noted that generally Oak Park Mall has managed to thrive when many others have not.
He pointed out that the metro area used to have eight major enclosed shopping malls and now has just two: Oak Park and Independence Center. And Independence Center is scheduled for a foreclosure sale Feb. 16 because it’s facing default on a $200 million loan.
“Regional malls continue to face serious pressures as they have over the last two decades,” Berenbom said. “It’s a testament to the strength of Oak Park that of eight there are only two remaining. Even with Nordstrom there, there’s challenges facing any mall. This just adds to the things they need to figure out.”
Enclosed malls have shuttered as consumers turn to lifestyle centers — open-air malls that offer shoppers the convenience of parking right in front of their favorite store or restaurant.
The centers, like Johnson County’s Town Center Plaza and Corbin Park, tend to have upscale national chain or specialty stores with some local retailers.
The most likely scenario for the Nordstrom space at Oak Park Mall will be to reconfigure the massive space for smaller tenants, possibly apparel or more “experiential” retailers such as current tenants American Girl and Build-a-Bear Workshop.
In a statement CBL said they were “excited about the opportunity to recapture this prime real estate for future redevelopment. … Nordstrom will remain at Oak Park until 2021. Between now and then, our team has ample time to evaluate various redevelopment scenarios in order to create the plan that makes the most sense for the market.” The owners declined further comment.
The mall currently has about a dozen empty spots, including the recently closed Banana Republic and Body Shop spaces. The former Foundry Big & Tall Supply Co. space has been mostly dark (except for use as a meeting space) since it closed three years ago in a high-profile spot. A large holiday pop-up store also is set to close soon.
Oak Park Mall has been a retail engine for Overland Park. It generated about $3.6 million in sales tax revenue for the city in 2016, the most recent year available. That’s 6.8 percent of the $52.6 million total city sales and use tax receipts for the year. Sales tax revenues from Nordstrom specifically are not made public.
The two Overland Park City Council representatives for the ward that includes Oak Park Mall said this week that they were disappointed to see Nordstrom moving but not overly concerned.
“Shopping malls are evolving with the times,” said Councilman Curt Skoog. “I have confidence that the mall operator will find an exciting new use for the space.”
Councilman Paul Lyons agreed. He said the mall was packed when he visited over the holidays, and he thinks the operator will continue to pursue creative alternatives to keep it viable.
“Anytime you lose a major retailer like that it’s a concern,” he said. “But I think it also opens up … a lot of space that could potentially be used for other activities.”
Berenbom said that as more traditional shopping goes online, one strategy is for malls to court entertainment venues, restaurants and more experiential stores.
“They’re going to have to continue to court and win tenants like that to keep the mall as a destination for people,” he said.
Oak Park has filled some larger spaces with atypical tenants including Turtle Tuff Overhead Door, a garage door showroom, and The Culture House Stage & Studio, a new tenant in the Nordstrom wing offering performances (music, musical theater and dance), dance classes including swing and ballroom, poetry readings, community events and more.
“We call ourselves the new neighborhood,” said Jeremiah Enna, executive director and founder of The Culture House. “Oak Park Mall is thriving. It still has a vision, it still has a life and I think it is going to come back really strong.”
It also has Kindred, a new collective of more than a dozen locally owned boutiques. Cupcakin’ Bakery also recently signed a lease for a spot just outside Nordstrom and across from the Culture House.
“I didn’t know Nordstrom was leaving. It would have been nice with all the traffic they bring,” bakery owner Erica Harris said. “But I’m excited to see what they will bring in to replace it.”
Many malls around the country are having to reinvent themselves.
A 2017 Urban Land Institute report said the “Amazon effect” continues to “undermine brick-and-mortar retail platforms … and some developers and investors are turning to new mixed-use live/work/play venues with entertainment, high-end dining, and digital/showroom retail combinations.”
Despite a very challenging retail environment, Lane4’s 2018 Kansas City retail report for the metro area also had encouraging words for Johnson County.
It noted that “North Johnson County retail continues to thrive due to dense neighborhoods, great schools and strong household incomes. Many of the major retail destinations are laden with local destination shops and restaurants, helping them to avoid the retail ‘apocalypse.’ ”
Southern Johnson County also continues to thrive with growth and strong schools, attracting new young families that can help maintain a robust retail market, the report said.