Springfield Mall, once a center of suburban life, now faces an uncertain future

By Derek Kravitz
Washington Post Staff Writer
Sunday, November 21, 2010; 8:40 PM

To be the Santa at Springfield Mall could be a tricky proposition: The struggling mall could soon be closed for good, its lofty redevelopment plans permanently shelved. Or it could be destined for a multimillion-dollar Christmas gift, with new high-rise apartments, outdoor outlets and a hotel.

The Northern Virginia mall's owner, New York-based Vornado Realty Trust, has been shopping its $160 million in debt in recent weeks, leading to speculation that lenders will foreclose on the property, according to retail industry analysts and publicly released financial documents.

Fairfax County officials are hopeful that Vornado purposely defaulted on its loans and is playing a game of chicken with its lenders so that it can buy back its own debt at pennies on the dollar. (The strategy of walking away from a distressed property by sending back the keys is informally known as "jingle mail.")

Representatives from Vornado declined to comment on their plans for the mall, except to point to previous public statements about their commitment to redeveloping it.

If the mall closed, it would mark the end of a storied shopping destination that helped define Springfield for decades. It would also become the latest reminder that the ubiquitous indoor mall, a byproduct of 1950s consumerism and a hallmark of modern-day suburban life, is continuing its steady march toward obsolescence.

"Many of these malls were struggling before the downturn, and they are still struggling today," said Andrew Johns, a senior associate at Green Street Advisors, which tracks retail malls nationwide. "It's a death spiral: The longer an indoor mall is failing, the harder it is for it to recover."

Opened in 1973, Springfield Mall was popular among families from across Washington. Big, boxy and boasting a carousel and plush play area, it was expanded in the late 1980s and made into a middle-class haven, a 1.4 million-square-foot shopping experience in traffic-clogged Springfield, a bedroom community of about 30,000.

"It was always the 'suburban mall,' and it had quite a following," said Nancy-jo Manney, executive director of the Greater Springfield Chamber of Commerce. "For a while, it did seem frozen in time."

During its heyday in 1985, Britain's Prince Charles and Princess Diana famously visited the mall during a trade trip to see a "Best of Britain" promotion at JCPenney. The mall's managers, a family-owned group, posted news clippings about the royal couple's U.S. visit on mall bulletin boards. The mall was sold to Vornado in 2006 for nearly $36 million.

Vornado agreed to invest an additional $100 million to turn the aging edifice into a "lifestyle center," with 1.1 million square feet of office space, a 225-room hotel and 2,200 apartments. County officials have called it the single most important project for deciding the future of Springfield, best known for its concrete Mixing Bowl interchange and aging strip malls.

But at least a third of Springfield Mall's storefronts are vacant, according to company estimates released in previous years and independent analysts. Large swaths of the mall, with its faded gray tile and white walls, are boarded up. Store owners and shoppers alike say it's in sore need of a facelift.

A change in behavior

In the past two decades, consumer habits have changed drastically. Shoppers grew tired of the traditional mall experience, with its seemingly endless maze of cookie-cutter stores, escalators and food courts.

"You have online shopping, specialty independent stores, much more street retail, and many of these malls were built for a different era, a different time," said John Asadoorian, a Washington broker specializing in the retail industry. "Unless you offer something new or unique, the future isn't promising, and that's especially true for Washington, which is finally coming into its own."

The Washington region has three malls with vacancy rates of more than 30 percent - Frederick Towne Mall, the Shops at Georgetown Park and Springfield Mall - when no other metro area has more than one, available data showed.

David Birnbrey, a partner at the Shopping Center Group, an Atlanta brokerage firm, said the death of the American mall is much easier to dissect: It begins and ends with a glut of retail space. The Washington region ranks fourth in the country in mall space (not counting anchor stores, which generally pay little or no rent), according to Green Street Advisors data.

"There's a lot of retail space out there that, in retrospect, should have never been built," Birnbrey said. "Developers built because they could get financing. By the end of it, you didn't just have regional malls, you had neighborhood malls."

At Landmark Mall, one of the area's oldest malls located just off Interstate 395 in Alexandria, redevelopment plans to turn the 52-acre site into an urban town center have languished for six years. Financing for a full-scale renovation of Laurel Mall has dried up, and occupancy rates have fallen to lows of 15 percent. The Boulevard at the Capital Centre in Landover, an outdoor mall that opened to great fanfare in 2003 with a Borders bookstore, a Pier 1 Imports and an Ann Taylor Loft, has struggled with crime and vacancies. And the Shops at Georgetown Park, located in one of Washington's most affluent neighborhoods, has sat half-empty as it undergoes redevelopment and high-end fashion retailers along M Street and Wisconsin Avenue NW draw away shoppers.

Other indoor malls have died off altogether, including Rockville Mall (demolished in 1995); Seven Corners Center in Falls Church (converted to an outdoor strip mall in 1998); Capital Plaza Mall in Landover Hills (abandoned in 2005); and the once-thriving Landover Mall near FedEx Field (closed in 2002 and torn down in 2006).

Declining fortunes

By the late 1990s, Springfield Mall had fallen into disrepair and lagged behind its more affluent counterparts, Tysons Corner Center, Tysons Galleria and the Fashion Centre at Pentagon City. It still was anchored by a JCPenney, Target and Macy's, and its location at the intersection of Interstate 95 and Franconia Road in Fairfax, just north of the Franconia-Springfield Metro station, was prime. But newer malls popped up, and in the past decade dozens of tenants have left Springfield Mall or filed for bankruptcy protection.

"The magnitude of the construction that we need out there hasn't happened, and that's frustrating," said Fairfax County Supervisor Jeff C. McKay (D-Springfield), who has campaigned heavily to redevelop the mall.

An AMC movie theater closed in 2008, and the Virginia Department of Motor Vehicles center moved out of its mall location in June. Two gang-related stabbings and a fatal shooting, along with numerous vehicle break-ins and muggings, gave Springfield Mall a reputation as a hangout for rowdy youths and criminals, McKay said.

"It's a mess, it's run down, it's dirty, it's not safe," said Celesta Fahey, a real estate agent who has lived and worked in Springfield since 1980. "People will drive elsewhere before they go to Springfield Mall."

Fahey said she'd like to see more lighting, parks and family-friendly restaurants in the area. "Parents don't even drop their kids off at the mall anymore," she said.

But in a possible indicator of things to come, the mall's Target store has been renovated, as has the JCPenney, which unveiled its $4.5 million update in August.

And both stores have their Christmas decorations up.

Deputy transportation and development editor Luke Rosiak contributed to this report.

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