September 12, 2017
A major makeover is in the works.
When Metrocenter mall opened in 1973 many considered it “the place” to go in Phoenix. Located just off Interstate 17 between Dunlap and Peoria Avenues, Metrocenter was believed to be the first mall west of the Mississippi River to have five department stores.
Today, just two remain open and the mall sits in the middle of a city-designated blight area. But, a major makeover is in the works.
Phoenix resident Heather Perez doesn’t shop at Metrocenter very often, but growing up she spent a lot of time at the mall.
“I have pictures of me and Santa Claus in this mall,” she said. “I remember the ice skating rink.”
As a teenager, Perez says kids all across the Valley spent weekend nights cruising Metrocenter loop. Today, most of the cruising can be found indoors.
“The older people they come and walk,” she said. “It’s like their exercise so now it’s like an indoor track.”
When Lou Snow moved into the first subdivision built near Metrocenter in the 1970s, the food court didn’t exist, but there was an airline-themed restaurant.
“It was like American Airlines and what it was, was an outer shell of an airplane and you walked in and had seating right there just like sitting on an airplane,” he said.
Remember, this was in the ’70s when commercial flying was viewed as fun, even glamorous. People traveled from Tucson and Flagstaff to spend a day at Metrocenter.
So, how did one of the nation’s most vibrant retail centers end up in the middle of an area the city labeled as blight?
“It really started to have problems as some of the department stores throughout the nation were consolidating and various department stores went out of business,” explained Warren Fink, chief operating officer of Carlyle Development Group, the company that now owns Metrocenter. He said sales also dropped as newer malls opened and online shopping soared.
When the mall’s previous owner invested more than $30 million in renovations, neighbors like Snow were thrilled.
“They added lighting. All of the entrances were changed. They did a tremendous amount,” Snow said.
But, that was in 2007, just as we entered the Great Recession. Stores couldn’t pay rent, the owner couldn’t cover the mortgage and Metrocenter went into receivership, a type of corporate bankruptcy. Then, in 2012, Fink’s company bought it.
Carlyle Group paid $12.5 million with the expectation of making a lot more by demolishing the cultural icon — either by knocking down the entire mall or keeping the department stores and gutting most of the walls in between.
“Oh, that’s sad,” Perez said. “I guess times change.”
The latest buzzwords among developers are “open villages” and “live-work-and play environments.” Fink convinced the Phoenix City Council to change the zoning from retail only to also allow office, medical and residential.
It’ll take years, but he envisions a mix of senior housing and medical centers, millennial renters and a 10- to 15-story office building. He said the city’s plans to extend light rail to Metrocenter by 2023 is a bonus.
“We’re adjacent to I-17 which has 250,000 cars a day going back and forth. At some point people don’t want to be in a traffic jam,” he said. “We have the highest density of all of Phoenix in a five-mile area and we have almost 500,000 people in that area,”
It’s an area full of what he calls “Walmart customers.”
“You know, this is not going to be Gucci, Prada,” he said. “This is going to be really main street America.”
A Walmart Supercenter is being built on the site of a former department store. It’s the first deal since Fink’s group bought Metrocenter. It doesn’t impress Lou Snow, though, who’s seen more crime and lower property values over the years. He’s not a fan of rentals and worries about who will move in.
“Are they going to take on responsibility as a tenant? Or are they gonna be here today and gone tomorrow? Because that’s what you see around here,” he said.
But, just across the mall’s parking lot car wash owner Nabeel Kammoun is excited.
“This will bring a lot of traffic our way. It’s good for my business,” Kammoun said.
Business hasn’t been particularly good for a while. Before the recession, Kammoun saw nearly 50,000 cars a year. It dropped to 20,000 where it’s stayed.
Other businesses are doing better. In the past few years, a string of restaurants have opened near the mall and the developer noticed.
“Those are not just Walmart customers,” Finks said. “Those are customers that are coming from the demographic that have the majority of the Walmart customer, but they also have the higher income level in that overall 500,000-person demographic. All we had to do was take a look at the expansion and success of the restaurants that are around us to realize this is a much more diverse market than some people think.”
While much remains uncertain, Fink said three things are clear — today’s mall will not stay and yesterday’s mall will not return. But, he promises the name will stay. That’s good news to Perez.
“It’s always going to be Metrocenter,” she said with a smile. “And it better have a round circle because that’s where we cruised.”
And the Metrocenter loop — that’s staying, too.