Business

Two large Treasure Valley shopping centers have thrived while another has struggled

Here’s what makes The Village at Meridian successful

Hugh Crawford, the general manager of The Village at Meridian, shares why he thinks the outdoor shopping and entertainment venue is successful compared to traditional malls and online sales.
Up Next
Hugh Crawford, the general manager of The Village at Meridian, shares why he thinks the outdoor shopping and entertainment venue is successful compared to traditional malls and online sales.

It’s a tale of three Treasure Valley shopping centers: Two wildly successful and one struggling to stay relevant.

Jim Haskell remembers when Karcher Mall in Nampa attracted shoppers from across the Treasure Valley. Business was brisk, says Haskell, who has operated Pets & Co. inside the mall for 36 years. That changed when the Boise Towne Square opened in 1988.

“When this mall was full, it was incredible,” Haskell says . “We constantly had people coming in and out and spending money. A lot of the people we get today are the lookie-loos who come in and just want to see pets.”

20181205_094533
The main corridor at Karcher Mall is nearly empty on a recent Saturday afternoon. While the Boise Towne Square and The Village at Meridian were teeming with holiday shoppers on the same day, Karcher attracted far few customers. John Sowell jsowell@idahostatesman.com

Boise Towne Square faced such a threat itself when The Village at Meridian opened in 2013. But it still thrives. So, too, does The Village. Even as Amazon and other companies sap sales from brick-and-mortar stores, executives say Boise Towne Square and The Village use some of the hottest brands to keep enticing customers to their stores and restaurants. Karcher limps along without them.

There’s a trick to finding the right mix of anchor tenants and other businesses in a shopping center, says Bob Mitchell, a partner with Thorton Oliver Keller Commercial Real Estate. If a new place provides a better shopping experience, that’s where people will go. Both Boise Towne Square and The Village have done that, he says.

“The Boise mall appears to be doing very well,” says Mitchell, who managed the mall for its first five years, in a phone interview. “They continue to add new national retailers, and I know their sales per square foot are really strong. It may be a bit of an anomaly in the national retail landscape, but the Boise mall is still very, very strong and popular.”

The Village, meanwhile, “does a fantastic job,” Mitchell says . “They’ve got a good mix of retailers and restaurants and the movie theaters and other entertainment. Even though it’s outdoors and cold during the winter, people still like to go there.”

So how does Karcher manage to hang on?

43 store spaces, 13 empty

When Karcher Mall opened in August 1965, it was Idaho’s first enclosed shopping mall. Stores such as Buttrey Food & Drug, Rasco-Tempo, Sprouse-Reitz and Kinney Shoes were among the tenants. Three years later, the mall attracted JC Penney in a move so profound that Penney’s closed other stores in Nampa, Caldwell, Emmett and Payette to focus on the mall location.

A 1973 expansion brought Karcher Mall two more large department stores, Falk’s ID and The Bon Marché, along with the Karcher Twin Theaters. Skaggs Drug Store also operated there. Shoppers from throughout Southwestern Idaho flocked to the mall.

Caldwell resident Kelly Peone says she grew up within walking distance of Karcher Mall and has fond memories of spending time there while growing up. Her mother painted holiday scenes on store windows and played the Easter Bunny for several years.

“I’m still close, but the only stores worth visiting anymore are JoAnn Fabric & Crafts and Bath & Body Works,” Peone told the Statesman on Facebook. “It’s heartbreaking to have seen the mall go from a major hub of Canyon County to what it is now.”

20181205_094730
Shoppers crowd Bath & Body Works in the Karcher Mall on a recent Saturday. The store that sells shampoo and body lotions was the busiest of the stores inside the mall. John Sowell jsowell@idahostatesman.com

Karcher Mall lost favor with shoppers as it lost its main anchors and couldn’t find other major retailers to replace them, Mitchell says.

“In its heyday back in the 1960s, ‘70s and early ‘80s, when Karcher Mall was the only mall in the Valley, people from Boise would drive over there to shop,” Mitchell says. “It was a convenient mall-type experience, and they could get a lot of shopping done.”

When Boise Towne Square opened, JC Penney closed its Karcher store to become one of the Boise mall’s anchors. And Macy’s, which years earlier had bought The Bon Marché, shut its Karcher Mall store in 2009, a year after the mall completed a $14 million facelift.

In 2010, the mall faced foreclosure after its owner, Milan Capital of Anaheim, California, quit making payments on a $20 million loan. The dispute was later settled. The company, which also operates 18 shopping centers in Southern California, continues to operate Karcher.

The mall has been overshadowed not only by Boise Towne Square and the Village but by other Nampa shopping centers such as the Treasure Valley Marketplace, located off Interstate 84 at the West Karcher Road exit. That center, which includes 1 million square feet of space, includes Costco Wholesale and Burlington (formerly Burlington Coat Factory), which recently vacated its space at Karcher.

“The nail in the coffin for Karcher may have been losing Burlington,” Mitchell says.

Not so, the mall’s management says. Amber Acree, an assistant Karcher Mall property manager, says neither Boise Towne Square nor The Village at Meridian have caused hardship for Karcher.

“Even with the Boise Towne Square opening 30 years ago, we’ve lasted those 30 years,” she says. “The [Karcher’] mall has been open for 53 years now. We’re still thriving.”

Still, more than a quarter of Karcher’s 400,784 square feet of retail space sits empty. The 13 empty stores — out of 43 spaces — account for an occupancy rate of 76 percent. Two of the empty spaces, including Burlington’s former location, total 108,473 square feet.

Ross Dress for Less and Big 5 Sporting Goods anchor the west side of the mall and continue to attract customers, along with Discount Furniture farther east.

Mor Furniture for Less, which has a store in Boise and operates 33 stores in seven states, opened a store on the east end of Karcher Mall two years ago. It took over the space Macy’s vacated seven years earlier.

And the Relic Theatre & Grill, operated by the same company that runs the Terrace Drive-In in Caldwell, opened a few months ago.

Most tenants are mom-and-pop shops. Acree says they give the mall more of a home-grown Idaho feel than its competitors have.

“When you walk into the store and you know you’re going to get the customer service and the attention because the person behind the counter truly wants to be there for you,” Acree says. “They’re not just somebody who is clocking in and clocking out and is just there for a job.”

Tenants keep Boise Towne Square afloat

Karcher is not alone in the struggling mall business.

At their peak in the mid-1990s, there were 1,500 malls in the United States. Today, they number about 1,100.

Last year, Credit Suisse predicted that as many as 25 percent of the surviving malls would close by 2022. The global bank noted that shopping center space more than quadrupled from 1970 to 2007, while the population increased just under 50 percent.

Darren Howard, general manager of Boise Towne Square, believes many of the mall closures are due to competition from other, newer malls nearby.

“I think when we see malls failing, it’s when you have too many malls per capita,” Howard says. “In heavily saturated markets, the consumer has more choices for where they want to go. Usually it’s the top malls, the ones with the best tenant mix, that are surviving.”

20181205_094852
Thirty years after it opened, the Boise Towne Square still attracts a large number of shoppers and keeps most of its storefronts occupied. John Sowell jsowell@idahostatesman.com

There was talk of a mall in Boise for two decades, before one was built. Under urban renewal, buildings were demolished Downtown to make room for one. Finally,

Price Development Co. of Salt Lake City chose a property northwest of the intersection of Cole and Franklin roads, and built Boise Towne Square.

Owner John Price sold his malls in 2002 to General Growth Properties, of Chicago. It is now owned by Hamilton, Bermuda-based Brookfield Properties, which bought GGP last year.

The Towne Square has 148 shops inside the mall and 17 in the adjoining outdoor Boise Towne Plaza. It reports an occupancy rate of 95 percent, which Howard says is “very healthy.”

Growth has helped the mall. Ada County’s population, listed last year at 456,849, has more than doubled since Boise Towne Square opened in 1988.

“As Boise grows, certainly our customer base grows with that,” Howard says. “And it also attracts new retailers, too. A lot of retailers are population-based, and they’re looking for certain thresholds. When we reach that, they want to enter the market.”

20181205_094831
Shoppers throng to the Apple Store at the Boise Towne Square to try out the latest electronics. John Sowell jsowell@idahostatesman.com

The mall is now looking for one or more retailers to fill the space left when Sears closes its store on Jan. 13. It’s one of 182 Sears stores nationwide closing as part of Sears’ bankruptcy filing in October.

“I can’t say too much, just because there’s still a lot of stuff on the back of a napkin,” Howard says. “We have a great development team that’s looking at the overall picture and seeing what we can plug in.”

Meanwhile, at The Village...

On Thanksgiving Day, the shops at The Village at Meridian were closed. But that didn’t stop people from coming, skating on the outdoor ice rink and watching the nearby water fountain show.

“People come far and wide to see our fountain, and that doesn’t change even when we’re closed,” says Hugh Crawford, the Village’s general manager. “It draws them in.”

1219bivillage08
Hugh Crawford, general manager at The Village at Meridian, says The Village has been successful because It’s a place for pure entertainment - from movies to the fountains - for dining, shopping and hanging out. “We’ve given people a compelling reason to be here,” he says. Katherine Jones kjones@idahostatesman.com

The shopping center has more than 100 tenants occupying 562,000 square feet of space in buildings with European-style architecture. There are streetscapes, along with flowers (in season) and trees throughout the center.

“When you come to The Village at Meridian, we make you pull onto the property, step out of your car and walk onto the sidewalks,” Crawford says. “It’s an experience. It’s fun. It’s festive. There are things to do. It’s not just about shopping.”

The Village hosts concerts, children’s activities, photos with Santa and other events — about 80 per year. It fits the vision of CenterCal Properties, which opened The Village five years ago, that retail sales will follow everything else that’s offered, Crawford says.

Traditional malls use department stores as anchors. Not The Village. “Our anchors are restaurants,” he says.

And instead of chain fast-food restaurants typically found in mall food courts, The Village features eateries such as Kona Grill, Calle 75 Tacos, The Habit Burger Grill, Grimaldi’s pizza and Casa Del Matador.

“It’s cold in the winter, but people in Idaho know how to deal with that,” Crawford says. “When it snows, it’s one of the most beautiful places I’ve seen.”

20181205_094803
The outdoor ice skating rink is one of the winter draws at The Village. The cold weather doesn’t have any effect on skaters. John Sowell jsowell@idahostatesman.com

Boise resident James Suchy says he likes to shop at The Village to walk outside in the fresh air.

“I also like that it’s not just shopping,” he told the Statesman on Facebook. “There is a park right there, lots of good places to eat and a movie theater.”

CenterCal has built similar shopping centers in Oregon, Utah, Washington and California for more than a decade. The success of those projects gave the company great confidence the idea would work here, too, he says.

“This is where everyone else in our industry is now going,” Crawford says. “They understand that entertainment and an outdoor shopping experience is what the consumer wants, what the community wants.”

Crawford says 3,500 people work there, including 2,000 in 95 companies that operate in upstairs offices.

The Village plans an expansion with a second luxury cinema, retail and office spaces, homes and possibly a hotel.

1219bivillage16
Joanne Bell, from Coeur d’Alene, gets an unexpected hug from Santa at The Village. Bell and her grandson, Aiden Bell, 13 months, were roaming around the square taking in the water show. “He loved it,” says Bell. While Bell wasn’t shopping at the moment, she’ll be back. “Oh, definitely. But not with him in tow,” she said. Katherine Jones kjones@idahostatesman.com

Can Karcher be saved?

Meanwhile, back at Karcher Mall, Oanh Tiffany, owner of Tiffany Custom Jewelry, says her jewelry shop has been at the mall for 20 years, and she is satisfied. “Business has been steady,” she says by phone.

More than a dozen people were shopping inside Bath and Body Works during a reporter’s visit on a recent Saturday.

20181205_094955
While Nampa’s Karcher Mall still attracts shoppers, its parking lot isn’t nearly as full as other malls and shopping centers. A lot behind the mall sits mostly empty. John Sowell jsowell@idahostatesman.com

But other smaller shops, such as A + Picture Framing, Tiffany and Under the Rainbow gift shop — the mom-and-pop shops that Acree meant, which make up the bulk of the mall’s offerings — didn’t attract as many shoppers.

The mall was recently listed for sale by Cushman & Wakefield Pacific, a commercial real estate agency, with an asking price of $14.5 million. A map included with the sales flyer suggests that the back parking lot, which sits mostly empty, could be used for redevelopment.

LeAnn Hume, the listing agent, told the Statesman that the 37-acre property is now under contract with a potential buyer. She declined to name the buyer or when the sale is expected to close.

Beth Ineck, Nampa’s economic development director, says the mall property offers great potential.

“There is a lot of acreage in the back that could be developed for something new and exciting, reformatting how the layout exists today,” she told the Statesman in a phone interview.

Says Peone, the longtime Karcher shopper from Caldwell: “I still hold out a sliver of hope that someone can take it over and turn it into something we would all enjoy again.”

Reporter John Sowell has worked for the Statesman since 2013. He covers business and growth issues. He grew up in Emmett and graduated from the University of Oregon.If you like seeing stories like this, please consider supporting our work with a digital subscription to the Idaho Statesman.
  Comments