Streets at SouthGlenn to bet on more housing amid retail headwinds

With gym shuttered, theater temporarily closed, redevelopment plan to move forward soon


Centennial’s flagship shopping development, one that faces big potential changes in coming years, already has a storied past.

The land where The Streets at SouthGlenn outdoor mall sits was originally home to the large, indoor Southglenn Mall built in the 1970s. The Macy’s and former Sears at SouthGlenn were components of that mall.

The Streets at SouthGlenn’s outdoor shopping center layout replaced the former mall in 2009. The City of Centennial has used buzzwords such as “successful lifestyle center” and “main street elements” to describe the mammoth development, a gathering place that serves as the closest approximation to a downtown that Centennial boasts.

The mall at South University Boulevard and East Arapahoe Road is a top source of tax revenue for the city, but it’s pulling in a smaller proportion of funds than it used to.

The loss of the decades-old Sears near the end of 2018 put the spotlight on what’s next for the outdoor mall, which wants to adapt to survive amid tough headwinds for traditional retail.

Developers want to add apartments at the former Sears property and put apartments and office space, and possibly retail and entertainment establishments, where Macy’s stands. Developers expect that the Macy’s store could close in coming years.

“The culling of the herd has been going on for a really long time,” Darrin Duber-Smith, an expert on marketing at Metropolitan State University of Denver, said about retail businesses.

Amid changing consumer preferences and a pandemic compounding the challenges, shopping centers must adjust to compete — or, Duber-Smith said, they risk the fate of Cinderella City in Englewood, Westminster Mall and Crossroads Mall in Boulder, developments that closed in recent decades along with the original Southglenn Mall.

“If you have empty space, as we learned with Sports Authority, that begets empty space,” said Duber-Smith, a senior lecturer at MSU Denver. He added: “When anchors leave, the small tenants tend to leave, too.”

Back in the street

The Streets at SouthGlenn is about 15% vacant, according to Donald Provost of Alberta Development Partners, the company that controls most of SouthGlenn. Centennial’s current retail vacancy rate is 9.5%, according to Neil Marciniak, Centennial’s economic development director.

“It’s difficult to say what’s typical during a pandemic, but large vacancies such as Sears can skew the vacancy numbers for an individual center,” Marciniak said.

On a cool evening Oct. 9, cars were parked beside the walkways throughout SouthGlenn’s core, with dozens of patrons gathered at outdoor seating at restaurants that have adjusted to the pandemic. Children, teenagers and adults walked through the mall’s common area — a wholly different sight compared to last spring during government-mandated business shutdowns.

Numerous shops at SouthGlenn that had been temporarily closed this spring appeared to be operational Oct. 9, but a couple businesses have closed at SouthGlenn since COVID-19 was detected in Colorado in early March, Provost said.

The Regal movie theater company — which runs SouthGlenn’s theater — closed, reopened and is temporarily closed again, Provost said. All Regal theaters across the country were to shut their doors from Oct. 9 until further notice, according to the company’s website.

The national gym chain 24 Hour Fitness filed for bankruptcy and announced in June that it would close more than 100 locations, including its SouthGlenn location and several others in the Denver metro area.

“We expect the theater business to recover and reopen across the country in 2021,” Provost said. He added: “We have some exciting things we are working on to reopen the gym!”

Noted Marciniak: “Malls and other retail centers have vacancies from time to time that can be attributed in part to individual retailer performance (and) challenges facing retailers before and during the pandemic including online shopping, changing consumer preferences” and so on.

Alberta provided rent support to several tenants during the pandemic, particularly for the period of time tenants were mandated to be closed, Provost said.

“Overall, the sales and traffic at SouthGlenn has recovered very well,” Provost added.

‘Healthy retailers’

Mixed-use developments such as SouthGlenn — with its bevy of restaurants, retailers, existing apartments and office space — are not new concepts. The idea came to prominence in the 1990s, Duber-Smith said.

Although developers’ plans to add 1,071 new residential units have drawn ire from area residents who have voiced concerns about the potential for more traffic, Duber-Smith said more apartments may fill a gap.

“My understanding is that we still don’t have enough residential space for our residents (in metro Denver), so if that is still true,” the apartments might be needed, Duber-Smith said. “And people like walkability. The question is: Will retailers be able to do enough business to stay afloat?”

A key to survival is “healthy retailers” — relevant brands rather than the traditional idea of anchor stores such as Sears and JCPenney, Duber-Smith said.

Places such as Olde Town Arvada and other “walkable shopping districts — those are the places that are going to survive,” Duber-Smith said.

Malls have to become more “experiential,” said Duber-Smith, using a common retail development term that refers to business the internet can’t easily replicate. Malls are adding features such as aquariums, miniature golf and arcades, Duber-Smith said.

“They’re going to have to be a little more like amusement parks,” he added.

Entertainment — something like Lucky Strike Bowling — could ultimately pop up where Macy’s stands within a few years, Alberta has said.


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