Can retail be rescued? Why so many U.S. stores are closing
The new owners of Idaho’s oldest shopping mall plan to get rid of its interior walkways, demolish a third of the store space and transform it into a lifestyle center more like The Village at Meridian.
Rhino Investments of Livermore, California, bought Nampa’s Karcher Mall from another California developer, Milan Capital of Anaheim, for an undisclosed price. The deal closed on Friday, May 3.
“We realized this is a great market to be in and grow with, and we want to make some great things happen here,” Sanjiv Chopra, Rhino Investments’ CEO, said in a phone interview. “My guess is that it will take three to six months of planning and then in six months you should start to see some activity happening.”
The 367,000-square-foot mall at 1509 Caldwell Boulevard opened In August 1965. Stores such as Buttrey Food & Drug, Rasco-Tempo, Sprouse-Reitz and Kinney shoes attracted shoppers from across the Treasure Valley. Its place was bolstered by later additions of JC Penney, Falk’s ID and The Bon Marché.
The mall’s fortunes changed when the Boise Towne Square opened in 1988. Changing shopping habits, including the growth of online commerce, and the 2013 opening of The Village at Meridian have also hurt.
One by one, Karcher Mall lost its anchors. Penney’s closed to become one of the Boise mall’s anchors. Macy’s, formerly The Bon Marché, shut its Karcher Mall store in 2009, a year after the mall completed a $14 million facelift. Last year, Burlington, formerly Burlington Coat Factory, left the mall to relocate at the Treasure Valley Marketplace north of Interstate 84.
The vacancy rate at Karcher Mall is 36 percent, in a market that has an overall vacancy rate of 10 percent, according to a solicitation for investors to provide $11 million in financing for the mall.
Ross Dress for Less and Big 5 Sporting Goods still anchor the west side of the mall and continue to draw customers, along with Discount Furniture and Bath and Body Works farther east. Mor Furniture for Less has been at the mall for nearly three years in the space vacated by Macy’s. The mall also includes several locally owned stores, such as Pets & Co., Tiffany Custom Jewelry and Under the Rainbow gift shop.
“A lot of the tenants in there aren’t crushing it by any means or doing great — they’re surviving,” Chopra said. “I don’t think it’s their business. I think it’s that people just aren’t going to malls anymore to hang out.”
Karcher Mall’s troubles are not unique. More than 400 of the 1,500 malls operating at the industry’s peak in the mid-1990s have closed. Credit Suisse, a global bank, predicted in 2017 that 25 percent of the surviving malls would close by 2022.
For the past decade, the owners of the old University Mall in Orem, Utah, have worked to transform it into a shopping center that allows people to live close to where they work and provide shopping and entertainment.
Two theaters were built at what is now known as University Place. R.C. Willey opened an anchor furniture store, and an office building was built along with a 478-unit apartment building.
Since 2010, Nampa’s population has doubled, to 102,000. There are 59,000 people in nearby Caldwell. Chopra sees great potential from the growing population, not only in Canyon County but in Ada County, which has 457,000 people.
“Anybody who lives in Nampa knows this spot,” Chopra said. “Everyone passes through that Karcher Road and Caldwell Boulevard intersection to get to Caldwell or to get to the freeway. There’s a lot of traffic that goes by there.”
Rhino Investments would like a couple of the larger tenants to move their stores to different parts of the property. Rhino hopes to bring in two additional “big box” tenants to absorb a large amount of the vacant space.
Chopra said he would also like to develop the parking lot on the back side of the mall, which gets little use. He thinks the space could be used for a multifamily housing complex and an extended-stay hotel.
“We don’t believe a typical hotel is needed,” he said. “Nampa has a lot of hotels. But a market study shows that it could use an extended-stay hotel. A lot of business people are coming to Idaho for a few weeks, and they don’t have a place to stay.”
Chopra said several local and national companies have expressed interest in possibly locating at the center, including a Hispanic grocer, other grocers and a fitness center. A Korean barbecue restaurant is slated to move into the vacant Chipotle space outside the mall, he said.
“It’s really about figuring out what the needs are and how we can fix the property,” he said. “It’s a great location, and the building has good bones. How do we take the bones and turn it into something special?”
BoiseDev.com first reported the sale.