Incentives part of bid to keep Sears at Metrocenter

Jackson Mayor Harvey Johnson is prepared to offer Sears incentives such as tax abatements to keep the full-service store as the remaining anchor for the 34-year-old Metrocenter Mall.

“Those are things we’re open to,” said Harvey’s spokesman, Chris Mims, of the incentives the city is willing to offer to help the store open despite its placement on a post-Christmas list of about 120 Sears and Kmart stores designated for closing.

Noting its 80 or so workers make the store the third largest employer in Ward 5, Mims said the mayor’s office is preparing attractive incentives “to sway them in any way we can to keep the store open.”

Sears owns the 240,000 square-foot building that includes 135,000 square feet of retail space. Whether the store will be put up for sale or lease has not been decided, said Kimberly Freely, spokeswoman for Chicago-based Sears Holdings. Corp.

Nor has Sears set a time frame for shutting down the store, according to Freely, who said market circumstances and other factors will dictate the closing dates of each store on the list. “What makes sense for one store may not make sense for another.”

The closing announcement comes just a month ahead of City of Jackson’s plans to move three city departments from the Medical Mall on Woodrow Wilson into about 60,000 square feet of space the city will lease in the former Belk store. Police Precinct 2 and several other city operations are moving into the space from the Atmos building, Mims said.

That will bring about 300 employees into the mall each day as well as a couple hundred people doing business with the city, according to Mims.

That potential customer base will be emphasized in talks with Sears, he said.

Further, Sears will be reminded that the full-service store is the only one of its kind within a 90-day mile radius, Mims noted.

A resurgent Metrocenter Mall and its likely redevelopment is a key element of Mayor Johnson’s “Go 80” strategy to bring new life to the south Jackson’s decaying U.S. 80 corridor. Whether the Sears closing represents a set back or a new opportunity for “Go 80” is uncertain.

Meanwhile, David Watkins, president of Watkins Development, the company that owns the former Belk space, said he expects the arrival of the city workers and additional visitors to create opportunities for more retail, food and beverage operations in the mall.

Watkins said the closing announcement surprised him, noting he thought the store’s sales were sufficient to keep it viable.

“The store last I saw was doing about $18 million a year in retail sales. That’s not shabby,” though it comes in low compared to many other Sears full-service locations.

The $18 million is “not a lot per square foot but if you own the building you can have a difficult sales figure and still make money,” Watkins added.

He took over as president of the Jackson Chamber of Commerce last Tuesday. Keeping the Sears store open occupies the top of his priority list at the moment, he said. “One of the first calls I’m going to make is to ask, ‘What can we do to shake things up?’”

In all likelihood, it’s too late for that, said Nina Holbrook, a commercial real professional and executive director of the Metrocenter Area Coalition, a 14-year-old group that promotes revitalization of the mall and the U.S. 80 corridor.

“What I’m afraid of is that with most decisions made by corporate structures there is no turning back.”

Jackson’s aging Metrocenter awaits new vision

On one hand, Nina Holbrook sees the departure of Sears as “one of the biggest hits Metrocenter has ever had.”

But then she switches her perspective from U.S. Highway 80 corridor advocate to commercial real estate professional. With that comes the idea that big things could be in store for the 34-year-old mall.

“It’s a great development opportunity,” she said.

In fact, it can be “something very, very good.”

But first the mall must gain single ownership, said Holbrook, executive director of the Metrocenter Area Collation advocacy group.

“If that mall could ever get into the hands of one group that owns the whole mall…”

David Watkins, founder and president of Watkins Development, LLC, says he tried to buy the mall but could not come to terms with mall owner Cannon Commercial of Los Angeles.

“We were unable to work out a deal,” Watkins said. “I still have my master plan on my shelf.”

The plan envisioned a partially open mall with retail, restaurant and entertainment venues along with hotel and residential development spread about among the shopping complex’s 127 acres.

With a better economic climate, “I would be excited to work on something,” Watkins said. “The unfortunate thing right now is the economic climate is still so uncertain. Regardless of what happens with Sears, I think we’re a year or two away from having some substantial redevelopment” there.

Sears could be looking for a buyer for its 240,00 square-foot building once it shuts down the store. Sears has not ruled out leasing, however, according to a spokeswoman.

Shervin Mateen, CEO of Cannon Commercial, said his company is considering unconventional uses for the space that could exclude retail. “We’re looking at medical, educational and other uses,” he said in an interview last week.

Watkins agreed that any vision for the mall’s future must go beyond retail.

That’s the approach Watkins is taking with the 180,000 square feet he has remaining in the former Belk building. The company is discussing office and mixed uses with potential occupants, Watkins said.

“I think these malls like Metrocenter have such great metrics,” he added.

First, it is in a “great location” near a pair of heavily traveled interstates, Watkins said, and noted that although aging, the 400,000-plus square-foot building was “superbly constructed.”

Yandell Wideman’s SouthEast Properties owns the 80,000 square-foot Metrocenter ground floor space occupied by Burlington Coat Factory as well as an additional 80,000 square feet of second floor space with interior and exterior entrances that make it well-suited for retail.

He said his real estate investment firm is willing to partner with Watkins, the City of Jackson, current mall owner Cannon Commercial or anyone else on a revival strategy. “We think the Metrocenter is absolutely a beautiful building and just needs to be brought back to life with alternative uses,” Wideman said. “We may look into a possible joint venture with an out-of-state company that specializes in this.”

Mateen’s Cannon Commercial has not been as involved in making enhancements to the mall as SouthEast Properties would like, Wideman said. “Maybe they will get involved now” that Sears is closing.

“Maybe it’s like a wake up call.”

Metrocenter, he said, “just needs a breath of fresh air and a new vision.”

Metrocenter Mall owner blindsided by Sears closing

Metrocenter owner Shervin Mateen hardly expected the news he received a couple days after Christmas — the mall’s original and last remaining anchor would be shutting its doors for good.

“It’s very shocking,” he said in light of the improving sales mall merchants had been reporting this holiday season compared to previous years.

“Sales were increasing and then we hear the news Sears is closing,” said Mateen, CEO of mall owner Cannon Commercial, in an interview last Tuesday.

Last year when Cannon Commercial fell delinquent in making debt payments on the mall, Mateen said he hoped to find a buyer. The Sears departure makes those prospects less certain, he conceded.

“After the Sears announcement it is unknown whether such a transaction can be accomplished any time soon,” he said, predicting diminished buyer interest. Cannon Commercial early last year closed the mall’s ground floor and concentrated remaining tenants on the upper floor. Mateen credits that move with helping to make this holiday season “a very successful one” for tenants.

Clothing retailer Jerome Carcamo agreed. Moving the stores to the upper floor has consolidated customer traffic “and really helped,” said Carcamo, district manager of Metrocenter tenant Man of Fashion.

Carcamo, who has managed various stores in the mall for 15 years, said he does not think the shuttering of Sears will hurt either his business or the business of his fellow tenants. Most, he said, are niche retailers who draw customers in pursuit of specific types of items. For instance, urban hip-hop clothing at Men of Fashion, Carcamo added.

Men of Fashion has a couple of more years on its lease and is inclined to renew, the manager said.

Likewise, Metrocenter tenant Burlington Coat Factory is unlikely to suffer after the departure of Sears, said Yandell Wideman, principal of SouthEast Properties, a real estate investment firm that owns the space Burlington leases.

“Burlington’s sales were up 8 percent this year,” he said, though he conceded that percentage of increase is based on what was likely a less-than-spectacular 2010.

Strong holiday sales aside, the loss of Sears is certain to hurt the remaining tenants, said Nina Holbrook, a commercial real estate professional and executive director of the Metrocenter Area Coalition, an organization of business and residents formed 14 years ago to advocate for the mall and the area around it.

Sears had kept traffic coming to the area “and we were building on that,” she said. “There are reasons why there are anchors — they draw traffic,” Holbrook said. “You can’t depend on people just walking into a mall without an anchor to draw traffic.”

What worries her, Holbrook said, is when departures start, “they don’t stop.”

Sears was Metrocenter Mall’s first anchor and will be the last to leave. “Without anchors it’s no longer a mall,” Holbrook said.