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Construction is underway for the new strip mall on Loudon Road. Photo by Meghan Siegler.




In with the new
Strip mall construction underway across from ailing Steeplegate Mall

05/14/15
By Ryan Lessard news@hippopress.com



While the Steeplegate Mall in Concord continues to struggle, with vacant storefronts and a declining property value, a new strip mall-style shopping center is being developed right across the street on Loudon Road.
 
The future of retail
Developer Mike D’Amante blames the advent of Internet shopping and a greater array of entertainment options for the relative decrease in the mall’s attractiveness.
And then, of course, there was the Great Recession. While D’Amante sees the retail landscape improving with stronger sales, he believes the time of building big box stores and malls has come to an end.
“I think that cycle has kind of run its course,” D’Amante said. “Now we’re gonna see more smaller centers being built, more destination-oriented centers being built and having a lot of services in them, as opposed to straight retailing.”
That’s exactly what he’s building along Loudon Road, across from the mall. The 31,000-square-foot area will have space for seven or eight shops and a restaurant, according to D’Amante. The roughly $7 million construction project will be complete in time for the new tenants to open in the fall. The area is a quarter of the size he had originally planned to develop back in 2008, but the recession put an end to those plans, which D’Amante said were dependent on bringing one large anchor to pay for the bulk of the project.
Now, D’Amante said, the tenants will be largely service-oriented so they aren’t in direct competition with online sales. Besides the restaurant, he said there will be cosmetic and medical services.
UNH marketing professor Thomas Gruen said the fact that developers like D’Amante are focusing on strip malls is part of a growing trend.
“I think we’ve certainly seen a lot more development of strip malls in the last 20 years and very few … traditional, major malls,” Gruen said.
Ease of access is behind the shift, he said.
“I think it’s a very convenient trend. People want to get easy-in, easy-to-park, easy-to-get-to, easy-out,” Gruen said.
And if the new shopping center attracts more people to the area, D’Amante said, it could be good for the mall.
“I believe what we’re doing, having [services] coming to our site that are going to add daily visits ... will be helpful for [the mall],” D’Amante said. “I believe our development is definitely going to help all the retailers in the area.”
Whether that comes to pass or not, one will have to wait and see.
The Steeplegate Mall still has a lot of challenges to overcome, like attracting more young people and filling the old Circuit City space, which doesn’t connect internally to the rest of the mall, making it less attractive to other companies.
“One of the things they’ll probably do long-term is find a use for that space. Because it’s such a large space, it adds a lot of vacancy to their square footage numbers,” D’Amante said.
D’Amante plans on announcing the tenants for the new development within the next couple months.
 
Golden age
In 1989 the Steeplegate Mall opened in the area of Concord known as the Heights, at the far eastern end of Loudon Road. The land had belonged to the D’Amante family, where Mike D’Amante’s grandfather, Rick, owned a lumber and construction business. They sold the land to Homart Development Company, a subsidiary of Sears, that built the mall. Later, in 1995, Homart was acquired by General Growth Properties.
Since the mall was built and Interstate 393 essentially replaced Loudon Road as Concord’s corridor to the Seacoast around the same time, the Heights has evolved into a sprawling center of commerce. The D’Amantes were behind much of that development.
Mike D’Amante still remembers the mall’s heyday.
“The mall, at one point, was literally a destination or a place where people would just congregate because it was convenient and it would [be] open in the hours that people just wanted to be hanging out,” D’Amante said. “I remember, as a kid, that’s what we used to do.”
The ’80s and ’90s were a time of rapid development, with a booming consumer economy resulting in new malls cropping up everywhere. 
Since then, the Steeplegate Mall has fallen on hard times.
The mall’s troubles can be attributed to a great many things — from competitive outlets opening north and south of the city to young people no longer seeing it as a cool place to hang out.
 
Ghost mall
In 2011, Rouse Properties acquired the mall when General Growth Properties divested from the mall along with 29 others because it was not among its top-performing sites.
It lost Circuit City, one of its anchor stores, when the company went bankrupt in 2009. And other stores have left, including Gap and Coach in 2011. Aeropostale and Abercrombie & Fitch left the mall in January 2014, and anchor store Old Navy left the mall in January.
Concord Deputy City Manager for Development Carlos Baia said climbing vacancy rates and dropping property values have lowered the mall’s status from the second-highest property taxpayer to the fifth-highest in just the past year.
“The mall’s value is $30 million, which is a significant drop from what it had been years ago,” Baia said.
In 2008, the mall was valued at $80 million. In 2012, it was worth $65 million, and by 2013 it had dropped to $52 million.
As of April, the mall officially went into receivership, after Rouse purposely skipped a $47 million payment, which resulted in passing the deed over to the bank.
While D’Amante sees Amazon as the main culprit behind the mall’s woes, Gruen thinks it may be another site: Facebook.
“Malls have always been a place to socialize,” Gruen said.
He muses that the growth of social media might be partly to blame for fewer young people flocking to the mall.
 
Shopping optimism
Baia sees a silver lining to all this.
“[The mall] has not had any deleterious impact on the retail area around the mall, which is unlike what you see in a lot of communities,” Baia said. “If you go to a lot of places where there’s a huge mall and the mall starts to fall on hard times, usually it brings everybody down around it. In Concord’s case, that’s not happening at all.”
Indeed, stores like Best Buy and Target across the street from the mall on D’Amante Drive are still attracting consumers.
And Baia thinks things might still turn around for the mall.
“We’re still optimistic that the mall can be a viable property moving forward,” Baia said.
The opening of outlet stores in Tilton and Merrimack might be drawing shoppers away as well, but Baia believes Steeplegate just hasn’t found the right tenant mix yet.
Gruen also thinks it’s too early to report the death of the mall.
“A lot of it depends on the environment that surrounds the mall,” Gruen said. “If the environment hasn’t changed, it seems like there’s some opportunity for renewal.” 
As for finding the right tenant mix, Baia thinks the mall might benefit from more local, small businesses moving in, while Gruen points to another trend in retail that might attract the same clientele Best Buy gets.
“Maybe there’s an opportunity for doing more showrooming,” Gruen said.
He thinks if some of the online-based businesses set up a space where customers can walk in and touch and see products before ordering them, it could make the mall more alluring.
Any future strategy for the mall will likely depend on the company that buys the property. The bank that currently holds the deed is still looking for a buyer.
 
As seen in the May 14, 2015 issue of the Hippo.





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