With over 2 dozen vacancies, Kansas City Country Club Plaza is hurting. Is there hope?

Update: Nordstrom staying at Oak Park Mall, not moving to Plaza, customers told by employees. Read the story here.

A century ago this April, J.C. Nichols proudly laid out his plans for the Country Club Plaza in nearly a full-page article in The Kansas City Star.

Some called his $5 million development, miles away from downtown, “Nichols’ Folly.” But it had been years in the planning, and construction soon began. Its first tenant, a photography studio, was said to be so eager to open, it didn’t wait until the building was finished.

But as the now iconic shopping center gears up to celebrate its centennial, more than two dozen storefronts stand empty across its 15 blocks, including spaces that held exclusive-to-the-market tenants such as Kate Spade New York and Michael Kors.

Buildings on the west side were demolished to make way for a gleaming new Nordstrom department store, but its opening has been delayed twice, leaving a vast fenced-off area facing several empty restaurants and a former movie theater.

About as soon as a new tenant opens, another closes.

Even before the COVID-19 pandemic, shopping centers contended with the rise of e-commerce and restaurant delivery services — shrinking foot traffic, retail experts said. Those changing consumer behaviors have only accelerated.

Now as the Plaza — and shopping centers across the country — recover from the pandemic, they may need a reinvention. But its owners are hopeful.

“There’s no question that the Plaza remains the dominant upscale retail location in the market,” said Bill Taubman, president and chief executive officer of Taubman, co-owner of the Plaza with retail developer Macerich.

And some recent reports from Plaza restaurant owners and retailers bear that out.

Stores closing

While the Plaza has had about two dozen empty spaces for the majority of the pandemic, recent closings of premier tenants and high profile corner spots have shaken some shoppers.

Brad Lang, a lifelong Kansas Citian who lives by the Plaza, said, “Every day (I) witness the anemic shopper traffic and yearn for the vibrant Plaza traffic of years past.”

“We had a mix of local and national brands that made the Plaza different — Saks, Restoration Hardware,” Lang said. “I worry that we’re in a bit of a death spiral. The new tenants coming in are really obscure brands, not destination brands for Kansas Citians and tourists — we’ll get whoever we need to fill the space, so we will take a LensCrafters. The Plaza has been an important tourism draw and economic generator for our city, which seems to be in jeopardy.”

Some closings involved chains shuttering locations nationally. Others, such as sister retailers Pink and Victoria’s Secret, were longtime tenants that the Plaza wants to replace with bigger draws.

Amazon had applied for permits for an Amazon 4-Star store in the former Tesla space. But according to Bloomberg, Amazon will close all of its physical bookstores and shops. An Amazon spokeswoman said, “We don’t comment on our future store roadmap.”

Jewelry store Helzberg Diamonds, which had operated on the Plaza for more than seven decades, shuttered, and RE:, a locally owned home furnishing store, closed this month, a decision the owner blamed on not enough traffic and needed building repairs.

Some local retailers who considered expanding to the Plaza said rents are too high.

Ben Cascio, owner of Cafe Europa, looked at the former Zoës Kitchen spot a year ago.

“It was shocking, the rates per square foot, the CAM (common area maintenance fees) and percentage rent, and no money for tenant improvement,” he said. “I would have to do $3 million minimum annually, some unbelievable numbers out of there, and I think that’s where the brakes get pumped. (But) you want to see that area remain vital because it is so important to the city.”

The Plaza currently has a lawsuit pending against former tenant Barton Perreira (for $102,609 in back rent), but two other suits against restaurant tenants for outstanding rent were recently settled. Plaza officials declined to comment on “legal matters.”

However, a few locally owned shops said the Plaza has worked with them on rents during the pandemic and offered short-term leases.

Sweet Kiss Brigadeiro, a Brazilian sweets shop, was a seasonal store through February. Now it plans to operate for at least another year as it moves to the Brighton Collectibles space on bustling 47th Street in April. It will add more desserts and tropical juices.

Plaza officials said the goal is for both the tenants and the landlord to succeed.

COVID’s long-term effects

To be sure, the pandemic has been especially hard on the retail and restaurant industries as consumers sheltered in place and then were reluctant to emerge.

Independence Center now has about a dozen empty spaces including huge sites that housed Macy’s and Sears. Officials with Independence Center did not comment.

But the Plaza’s biggest rival, Oak Park Mall in Overland Park, has only a handful of vacancies. An Oak Park Mall spokesman said about 100 tenants, or about 70%, are national brands and it has more than 40 locally owned operations, from a children’s theater to eateries and apparel shops. But it also lost some exclusives during the pandemic, including American Girl, The Disney Store and Microsoft.

The National Retail Federation anticipates strong job and wage growth and declining unemployment this year. But it said GDP growth will be slower in 2022, around 3.5%, given the surge of inflation and tightening of monetary policy.

But Deloitte consulting says consumers may never shop the way they once did. They plan to work more from home, to cook more and to shop more from home. But that gives shopping centers an opportunity to serve as community centers. A grocery store might drive more foot traffic and sales than traditional anchors such as department stores. Nationally, some malls are adding bowling alleys, health care tenants, even a casino.

The Plaza had a theater tenant set to go into the former Cinemark Palace at the Plaza. But those plans could change with more consumers streaming movies now.

“Hopefully Nordstrom is going to fulfill their commitment, and that the landlord will fill the empty spaces,” said Curt Diebel, second generation owner of Diebel’s Sportsmens Gallery, which has been on the Plaza for nearly 70 years. “I don’t envy them but they are a big company, and if anyone can do it they can.”

The Plaza’s path forward

In the last year, the Plaza has seen an influx of not only locally owned retailers but minority owned shops, giving it more diversity than any time in its 100 years — Archive, Matches Boutique, Sugahrush Berries, Sweet Kiss Brigadeiro,Bruu Cafe and Jill Marie Boutique (a pop-up that is closing in April).

Adison Sichampanakhone and Jackie Faltermeier operated Ice Cream Bae in the Plaza’s Made in KC Marketplace for a couple of years before outgrowing the space. They looked at Plaza storefronts, but rent was too high at the time for their new business to make enough of a profit. So they opened in Leawood’s Park Place. Now they will expand again, opening a Plaza storefront in June after negotiating better terms.

“We grew up here. We’re excited to be down there and open. We still believe there are a lot of people who enjoy going to the Plaza,” Faltermeier said. “All the walk-in traffic, the sense of community. And you can still find some local shops down there.”

While Nordstrom has pushed back its opening twice since the pandemic started, it said it is still targeting a fall 2023 opening.

Buildings on the site were demolished and it is now a green space. The Plaza expects construction to start soon. Who is footing the cost of the 122,000-square-foot building, the Plaza or Nordstrom? Taubman wouldn’t say.

Many tenants complained about maintenance issues and infrastructure repairs that can cause streets to be temporarily blocked off. It’s an ongoing battle for a complex in its 100th year.

Tynesha Matches, owner of the new Matches Boutique apparel shop, would like to see more shoe stores, special occasion apparel shops for prom and homecoming, and family attractions such as selfie boutiques and escape rooms.

“If I’m coming into town with my girls I want to go to a selfie museum, have drinks at the Monarch, do all my shopping on the Plaza — a one-stop-shop,” she said.

Faltermeier of Ice Cream Bae would like to have a farmers market, and said the Plaza is talking about a lawn space where customers can relax with a cup of coffee.

Some tenants would like to see more pop-ups and weekend festivals that would bring in regional shoppers.

National retailers also continue to open, including LensCrafters, although it is a little too “traditional shopping mall tenant” for some Plaza fans, who hoped for an upscale retailer in the former Halls building across from Tivol jewelry.

But a temporary traveling show, “Michelangelo’s Sistine Chapel — The Exhibition,” plans to open in the former Nike space starting April 1.

The Plaza also is adding another exclusive retailer, cult favorite Psycho Bunny. Other chains scheduled to open soon include Fabletics activewear, LoveSac furniture and Club Pilates.

Tenants said the Plaza also needs to bring in more upscale retailers to help make up for the loss of Kate Spade and Michael Kors. On some consumers’ dream list? A Louis Vuitton to go with sister retailer Tiffany & Co.

And new experiences are on the way nearby. Drake Development is rehabbing the former Jack Henry Building at 612 W. 47th St., just west of the Plaza but not owned by Taubman and Macerich. The $50 million renovation will include “flagship anchor” tenants such as Puttery, an indoor, high-tech mini golf course with bars and lounge, as well as a Chiefs Fit, a fitness center with a Kansas City Chiefs theme. It also has a couple of spaces that will be for retail or restaurant tenants.

Signs of hope

Meanwhile, several restaurant and retail tenants were hopeful heading into spring.

Zocalo Mexican Cuisine & Tequileria is posting 15% increases for the first quarter of this year. Sales also are up 10% to 15% at Rye restaurant, which also is booking many events that were postponed during the pandemic.

Jack Stack Barbecue, which opened in late 2006 on the Plaza’s east side, recently renewed its lease through 2031.

The Granfalloon Restaurant & Bar was founded in 1977, three months before Brush Creek flooded the Plaza. Its third owner, Tim Caniglia, moved it to its current location in 2000 and renewed his lease for 10 years in late 2020, at lower rents. But he is near two empty restaurant spaces — Parkway: Social Kitchen (one of the first area restaurants to close during the pandemic) and The Oliver.

“We are so busy it would be nice to have someone else come down next to us, another restaurant or two,” he said. “If I owned the Plaza I don’t know what I would do. There’s a lot of retail that doesn’t want to open anymore. Leasing agents come in for lunch and they are trying. Right now I don’t think they want anyone to leave.”

The owner of Diebel’s Sportsmens Gallery, a cigar and men’s gift store, said customers flocked to the shop during the holidays, and sales are expected to remain strong going into the golf and patio season.

“We were one of the lucky ones, like the liquor stores. People were sent home and on Zoom calls and then able to enjoy a cigar that they would never be able to enjoy in the office,” Diebel said.

At The Better Cheddar, which on March 1 celebrated its 39th anniversary on the Plaza, business is better than ever. Owner Ron Shalinsky attributes it to the shop’s focus on top quality products and customer service, along with more customers cooking at home during the pandemic.

“It’s concerning when you see the empty spaces. But people still come to the Plaza — the history and the beauty will always draw people as long as you maintain it. The Plaza lights, the Easter bunny,” he said. “We’ve been through periods like this before and we will be through them again.”

This story was originally published March 30, 2022 at 5:00 AM.