More than makeup
Plotting the future for Valley West Mall with a new name and range of new uses
KENT DARR Feb 21, 2019 | 4:20 pm
4 min read time
1,014 wordsBusiness Record Insider, Real Estate and DevelopmentOne day, Valley West Mall will look in the mirror, see Valley West Commons and barely recognize its old self.
The name change will come as new tenants with new uses come to the 44-year-old West Des Moines shopping center, said Paul Stender, who has been general manager at Valley West Mall for the last 18 years.
Over that time, the mall has undergone a major renovation — in 2003 in anticipation of the opening of Jordan Creek Town Center — and it is now planning for more change.
Southridge and Merle Hay malls also are in the midst of change. As local experts say, Greater Des Moines is a two-mall town, trying to support four.
Owners of Merle Hay and Valley West malls more than likely anticipated the disruption that Jordan Creek Town Center would bring to the marketplace when it was being planned in the early 2000s, filing a lawsuit that claimed, to no avail, that West Des Moines was improperly using tax increment finance revenues to build streets and other infrastructure to accommodate the new mall.
These days, Stender is seeking the advice of local commercial real estate experts as he plots a course for Valley West.
“Right now we’re looking to see what we can do, who is out there that we can bring in and what we can do with the center going forward,” Stender said.
At present, he has 202,000 square feet of dark department store space, idle since the closing last year of Younkers and the bankruptcy of its parent, Bon-Ton Stores. Valley West Mall LLC, the family-centered entity that developed Valley West Mall in the early 1970s, owns the Younkers store, giving it some flexibility in planning the store’s future uses.
Odds are that the other two Valley West Mall anchors, Von Maur and J.C. Penney, also will close. Von Maur has announced plans to open a store at Jordan Creek Town Center and J.C. Penney is struggling as shoppers shift their dollars away from the department stores that once defined the mecca of retail spending. Valley West Mall operators also own the Von Maur and J.C. Penney stores.
Stender said Von Maur ownership has not told him whether it will shutter the nearly 182,000-square-foot Valley West Mall store, but most brokers say it is a foregone conclusion.
“This is the same thing being experienced at 80-plus percent of regional malls across the country, including Merle Hay Mall,” said Steve Scott, senior vice president at Cushman & Wakefield Iowa Commercial Advisors.
Scott is a retail expert and one of the many brokers who are mulling the transformation of retail and its consequences for the super-regional shopping centers of yore.
“Two major disruptors are at work in retail real estate: Amazon and millennial lifestyles. Amazon, and online retailing in general, is causing mall anchor department stores like Sears, Younkers, and Penney’s to struggle and fail,” Scott said. “Amazon Prime is about to surpass 100 million members in the U.S., and that membership includes almost every millennial.”
When millennials do go to the store, “they strongly prefer smaller local specialty stores nearby their homes over large department stores and mall retailers,” he said.
Multiple factors come into play.
“Nationally, millennials’ average per capita income is about $25,000 yearly, even though a huge number still have large outstanding student loan balances to pay off,” he said. “As many as 25 percent of millennials do not own a car and are inclined to use public transportation where it is available.
“These factors are not conducive to high retail spending, although Des Moines is somewhat of an outlier due to our many white-collar jobs and low cost of living, enabling a relatively high level of disposable income.”
Scott pointed out that in Greater Des Moines it takes 2.8 years of income to purchase a single-family house; in other metropolitan areas that time frame grows to five to 10 years.
And aging millennials, he said, are shifting their living preferences from places such as New York City and Chicago to “18-hour cities such as Minneapolis, Kansas City, Austin and Nashville because they are more livable and affordable. But millennials are very attracted to Des Moines because the vibe here is similar to 18-hour cities and living is even more affordable. Perhaps Des Moines is a ‘16-hour’ city.”
So there is a message of hope for Valley West Mall inside the theme of change or fail.
“The market is changing, the industry is changing, and we’re just looking to change with it,” Stender said.
He is looking at conceptual renderings for what will be Valley West Commons. A large chunk of what Stender called “soft green space” stands out, taking the place of copious amounts of parking. It could be a spot to relax for visitors to Valley West Commons or the neighborhood around the nearly 58 acres the mall occupies at Valley West Drive and University Avenue.
But what will bring the community to Valley West Commons?
For now, Stender envisions specialty and lifestyle retail, multifamily residential, office, medical, entertainment, and institutional uses such as educational.
Scott believes the shopping center is well-positioned to survive.
“Valley West Commons [will be] in a favorable location geographically to capitalize on the aging millennial population and its evolving lifestyle preferences,” he said. “The population of the millennial generation is higher than any other generation past or present, and as they are mostly now in their child-rearing years, their preference toward urban living is shifting to residing in first-tier rings and close-in suburbs of major metropolitan areas in order to find more affordable housing, good schools and safe neighborhoods with a feel of community.”
In Greater Des Moines, those areas are located “mostly west of downtown Des Moines and inside the Interstate 35-80 corridors in “neighborhoods such as Ingersoll/Grand, Beaverdale, Windsor Heights and the areas within a couple of miles of Valley West Commons,” Scott said.
Stender is a believer. “I think Valley West Mall and the real estate it sits on and its place is the market is very favorable to us repositioning,” he said.