Photo Credit: Cypress Equities
The retail landscape in southeastern Wisconsin is undergoing massive changes. The era of the bustling suburban mall is coming to an end, and big box stores are shuttering all over the region.
So, why is such an expensive effort getting underway to try to save Bayshore Town Center?
Last week, the city of Glendale held its first public hearing on a $75 million proposal to revamp the mall, which would involve a new $37 million financing commitment from the city’s taxpayers. That funding would, with the help of the property owner, aim to pay off a $57 million tax financing debt that the city took on when Bayshore was created in 2006. That new $37 million in financing would then in turn be paid back by 2033.
If Bayshore is already coming up short after its first 13 years when it had experienced some modicum of success, what makes it seem like the next 14 years would go better? Are malls set to make a comeback in the 2020s and ’30s? Is there suddenly going to be a huge demand to go shop at a Sunglass Hut and eat at Panda Express?
What sets Bayshore apart and makes this a potentially telling scenario is that this is a mall that already adopted many of the trends many retail centers are now employing to reinvent themselves—restaurants, housing, entertainment options, etc—when it was first constructed. And now, even that is beginning to crumble, which can’t be a good sign for newer developments in the region like the Mayfair Collection in Wauwatosa or The Corners in Brookfield.
Empty Aisles
Bayshore has a lot of empty storefronts, with reportedly more than 50 available tenant spaces. It seems like this happened in a hurry. It lost three big tenants—Sears, Sports Authority and Boston Store—in the last five years. The iPic movie theater and bowling alley also closed last year. Restaurants, too, are closing.
The $75 million proposal from Dallas-based Cypress Equities, a subsidiary of American International Group (yes, that AIG), to redevelop the mall includes a medical office building, more housing, vague talk of a potential hotel and a renewal at its “town square” with a skating rink during the winter and fire pit during the summer.
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That doesn’t seem like enough. Glendale Mayor Bryan Kennedy told BizTimes in an April cover story that debt from the original project could be paid off by 2026, at which time the city could see a “huge influx” of tax revenue. Maybe that’s the move: to keep some of the successful tenants in place until that huge influx arrives instead of gambling on less-than-stellar redevelopment plans.
Dark Store Loophole
Another major challenge facing the region as retail moves to a post-brick-and-mortar world is the “dark store loophole,” a fairly brazen tax dodge where businesses re-appraise their stores in effort to lower their property tax bill by comparing the prices of active stores to vacant ones. A recent New York Times feature on this topic focused on Wauwatosa, which is seeing major challenges with this problem that Wauwatosa Mayor Kathleen Ehley called a “virus.”
Naturally, state Republicans voted against a Gov. Evers' proposal to close the dark store loophole in Wisconsin, so without this protection for municipalities like Glendale, what’s more likely to happen, a full-scale mall revival, or a large corporation threading the dark store loophole?
For Bayshore, there’s a new timeline on what’s to come from the new proposal. Public hearings are happening in June and approval could happen as soon as August. Perhaps the plans will be different when they’re presented for final approval (final plans being voted have not yet been unveiled), but even if they are, it’s worth it for Glendale to take a hard look at whether or not this is the right long-term investment for it to be making.
Bayshore, like all malls, might just be a place that’s quickly becoming an outdated relic of the way people used to buy things. It might not be worth saving.
