Independence Center facing challenges
Macy’s announcement that its Independence Center store will close in April surprised local mall management.
Big-box closures have been common across the country in recent years, though, and Independence Center had already lost one anchor when Sears closed late in 2019.
The decision has mall management asking about as many questions as citizens and local shoppers about Independence Center’s future, particularly as it faces another pressing issue – several violent incidents in recent months that have led to a 3 p.m. curfew for minors.
“We were unaware that this Macy’s was closing. We found out just like everyone else did, unfortunately,” Vanessa Macias, the mall’s director of leasing, said a few days after Macy’s announcement. “We did not anticipate this at all. As of right now, I am unaware of any plans or what Macy’s plan is.”
The mall will have two remaining anchor tenants, Dillard’s and Dick’s Sporting Goods, the latter of which moved in a few years ago.
Like Sears on the mall’s west end, Macy’s owns its space on the east end. The mall had not announced any plans for the Sears space before the pandemic, and whatever had been in the works is at best doubtful.
“There were plans for the Sears building prior to COVID-19 but then COVID-19 happened and all plans fell through,” Macias said, adding that she had no further details on future mall plans.
While the mall has not had poor occupancy, any mall losing an anchor tenant in these circumstances will be detrimental, said Barbara Denham, a senior commercial real estate economist with the national financing services firm Moody’s Analaytics.
“The owner will have a difficult time filling the space,” Denham said. “That said, if it has survived this far, it should get through the winter, but it will depend on how quickly the vaccine is adopted.”
“It’s hard to say what level of vacancy this mall can tolerate to survive; it depends on how well it is financed.”
IGP Business Group, a company based in Los Angeles and whose portfolio includes Central Mall in Salina, Kansas, as well as malls in suburban Los Angeles and Orlando, bought Independence Center nearly two years ago. A year before that, longtime mall owner Simon Properties had defaulted on a $200 million loan for the mall, and a commercial trust bank secured the loan until IGB's purchase for a reported $57 million.
While numbers aren’t specific to the mall, Denham noted that Independence/Raytown retail has a higher vacancy rate – 13.9 percent – compared with Kansas City’s rate of 11.8 percent and the national rate of 10.5 percent. However, the Independence/Raytown market has a much lower asking rent, $10.19 per square foot, than Kansas City’s 14.89 and the national average, $21.37.
Mall management also has been dealing with a series of violent or near-violent incidents. Last week, a man was charged with making a terroristic threat after allegedly waving what turned out to be a fake gun in the food court, while two other men received misdemeanor charges. An exchange of gunfire in the parking lot happened the week before that.
On New Year’s Eve, an exchange of gunfire inside the mall left a 16-year-old boy with a serious leg wound. Police continue to investigate that incident, which happened after an altercation between two groups of people.
On Jan. 4, the mall announced a curfew of 3 p.m. every day for unaccompanied juveniles age 17 and younger. In that announcement on social media, the mall said it takes the issues “very seriously and will spare no expense,” adding that ownership had given permission to hire more security and off-duty police officers.
“Please know that we are teaming up with the city and the police department to help curb these issues so Independence Center can remain a nice place to come with your family to shop and play,” the mall posted.
“We are hoping with these new measures, we can go back to ‘the new normal’ quickly,” post continued, as mall management said they know the venue is vital to the city and surrounding cities because of the tax revenue it generates and the jobs it provides. What has happened here is a multifaceted problem that has been exacerbated by the global pandemic.”
Independence Police have had officers working overtime to check IDs at mall entrances and help enforce the curfew – though that’s not considered a long-term solution – and police continue to meet with mall management about possible security measures.
“They want to make this work,” Police Chief Brad Halsey said.