When Briarwood Mall opened in 1974 it looked less like a shopping center than a museum. Its cast-concrete exterior was carefully sculpted, and art installations and fountains adorned its broad, polished corridors.
Now those corridors are overrun with so many kiosks and food counters and promotional displays that it’s starting to look like a Turkish bazaar. And recently, a local business watcher pointed out a more subtle shift we’d missed: last year, when MC Sports moved from Oak Valley Centre to what was once the mall’s movie theater, it was allowed to put in an outside entrance.
Briarwood is known in the trade as a regional mall. Regional, enclosed malls are for leisurely destination shopping, not quick stops for batteries and shampoo, and that status is enforced by limited access. Now Briarwood had not only recruited a tenant from a low-rent strip mall, it had given that tenant strip-mall-like access. Our observer took that as a sign that the cachet of the regional mall is fading.
Ida Hendrix, manager of Briarwood, says MC Sports got its own entrance because it asked: “The theater never requested an outside entrance.” She notes that besides the department store “anchors,” several other tenants have been granted parking lot entrances, including Tricho Salon near Penney’s–“they’ve been here since around 2003.”
Hendrix says she was happy to give MC Sports the access it wanted. “They’re used to opening up a little earlier, so that door works well for them. I considered them an anchor because of their size.” And it’s true–MC Sports is now listed as a “major retailer” on the mall’s promotional brochures. (While big for an interior tenant, it’s tiny compared with Macy’s, Sears, JCPenney, and Von Maur.)
And what about the Turkish bazaar going on in the aisles? In late 2011, Briarwood seemed to have about eighteen carts and ten kiosks (larger, more permanent structures) selling phones, scarves, jewelry, and that perennial favorite of mall hawkers, Dead Sea salt cosmetics. It also had four large food concessions in the center court, and all the halls were dotted with gum and pop machines, as well as promotional displays like cars and bathtubs.
If this is the new face of the enclosed mall, what is happening at the strip malls?
Ed Rix, MC Sports’ vice president of marketing, says there’s nothing wrong with Oak Valley–it’s just that the Grand Rapids-based chain is adding hunting and fishing sections, and its old spot just wasn’t big enough and visible enough. But for Oak Valley and its smaller sibling across Waters Road, Village Centre, MC’s departure was just one of a string of losses.
Both are owned by Tom and Fred Goldberg, Detroit-area developers who also own four other nearby strip malls: Woodland Plaza (Busch’s), Cranbrook Village (Whole Foods, REI), the Colonnade (restaurants), and Waters Place (Best Buy, Kohl’s). Though those all seem to be doing quite well, Oak Valley and Village Centre are clearly hurting. MC’s spot is one of six vacancies at the back end of Oak Valley; Village Centre has four spaces available.
But Tom Goldberg says those vacancies have nothing to do with the regional mall down the road. “We’re not in the same galaxy as Briarwood because of the pricing model,” he says. “There are two categories of tenants: they’re either mall based or off the mall. It’s not common that they cross paths.”
That they crossed paths here suggests to Goldberg that Briarwood wooed MC with an extraordinary deal. If the only motives were space and visibility, the Goldbergs had a bigger, more visible spot available at Waters Place. But Goldberg says MC never even asked about it.
“That’s what leads me to believe that they were aggressively pursued by the Simon Property Group [Briarwood’s owner],” Goldberg says. “I think the [deal went down] as follows. Briarwood had that old theater, which was an obsolete asset. To retrofit it to a new store made a lot of sense. And I’m quite confident, knowing how MC operates, they made a very opportunistic move. They did it when the market was upside down.”
Goldberg blames his vacancies on the banks. “Oak Valley and Village Centre are more dependent on smaller, local tenants. That part of the market is very stressed because of the availability of financing dollars. If you’re a local entrepreneur, it’s very difficult to get a loan from a local bank or credit union.”
He says he has new tenants lined up for many of those spaces. “I don’t want to jinx myself by mentioning names, but my point is it’s been difficult for those types of businesses.” And he says he’s optimistic overall: “Contrary to the doom and gloom we’re bombarded with on a daily basis, I think the Ann Arbor market is doing nicely. We’re fortunate to have a better employment rate and a better wage rate than a lot of Michigan, and it’s reflected in retail sales.”
The retail elephant in the room on the south side of Ann Arbor these days is Costco, now rising on the corner of State and Ellsworth. The question is whether the warehouse club will suck the life from competing businesses, or draw so many new customers into the area that it will reinvigorate the entire south side. After Briarwood itself, no one stands to win or lose more when Costco opens than the Goldbergs.
Tom Goldberg thinks it will be either a win or a wash. He calls Costco a “with it” retailer. “You can count on your hands the number of retailers that fall into that category. Target is one of them; Whole Foods, REI. They have good products. They understand how to price products fairly, and they understand good service.”
Target, REI, and Whole Foods are, of course, all his tenants. “At the end of the day,” he predicts, “I think we will all peacefully coexist.”