There’s being creative. And then there’s going overboard.
What’s going on at Southwest Plaza, a mall in Jefferson County, may be a bit of both. Construction is underway on a nearly 20,000-square-foot aquarium on the ground floor, a soft pretzel’s toss from the Dillard’s.
When it opens later this spring, SeaQuest Littleton will let paying customers mingle with 1,200 sea creatures, including snorkeling in a tank of sharks and stingrays. Mall management hopes you’ll stop by the food court for a Chipotle burrito on your way in and maybe select a new summer look at H&M on your way out.
“It’s not just retail anymore. You have to have a full experience,” Southwest Plaza general manager Greg Sims said of SeaQuest and other entertainment and experience-based businesses that have opened in the roughly 1 million-square-foot center’s walls in the past few years. “We’re trying to give people a reason to come out — other than shopping — and the shopping benefits from the visit.”
Entertainment isn’t new in American malls. Mall of America, in suburban Minneapolis, has been home to a 7-acre amusement park since the early 1990s.
But recent Southwest Plaza additions, including a Yoga Pod studio, demonstrate that the metro area’s second-tier shopping centers are no longer just relying on standards such as arcades and movie theaters to entice shoppers. In an age when many national retail brands that were once stalwart tenants are shrinking or dying, and when competition from e-commerce and discount stores continues to cut into their bottom lines, malls are turning to the unique. Their survival could hang in the balance.
“It’s actually a brilliant idea what these guys are doing,” retail analyst Jon Schallert said of Southwest Plaza’s turn to SeaQuest. “It’s going to drive kids, it’s going to drive parents, it’s going to drive grandparents into the mall. It’s going to be able to pull from all over the metro area.”
Dominant regional malls — including Park Meadows and Cherry Creek — remain strong amid evolving retail tastes because they can attract exclusive tenants and command top lease rates, said Schallert, the owner of the Longmont-based Schallert Group. But secondary centers, which draw shoppers mostly from the surrounding community, face challenges in differentiating themselves and remaining fully leased as go-to anchors such as Macy’s, J.C. Penny and Sears are closing stores by the hundreds.
“Those kind of cookie-cutter tenants that used to go to every mall in the marketplace, they are just not doing that anymore,” Schallert said.
In his travels across the country, Schallert has seen many malls trying their hand at bulking up on different entertainment and experience offerings to stay afloat.
“I’ve seen everything from BMX bicycle courses to interior playgrounds to trampoline events centers that are part of these malls,” he said. Bringing in unique, destination businesses such as SeaQuest is “the perfect thing for a mall that’s still in a good demographic area but is clearly not the dominant mall in a major metro area,” he said.
Mall owners are well aware of the changing habits and tastes of American consumers.
GGP Inc., formerly General Growth Properties and the company that owns Southwest Plaza and Park Meadows, put out an investor report last spring that called the U.S. “over-retailed.” The report shows the country has about 24 square feet of retail space per capita. Canada, the next closest country on GGP’s list, features 16 square feet. China has 3 square feet.
In an earnings call in May, GGP CEO Sandeep Lakhmi Mathrani said entertainment-centric leases at the company properties will continue to rise, according to a write-up by EMarketer.com. In the financial quarter immediately prior to that call, apparel sales at GGP properties declined by 1.8 percent. Meanwhile, receipts from theaters, supermarkets and mall entertainment centers went up 6.7 percent.
Southwest Plaza officials reached out to SeaQuest about space in the mall, according to the fledgling aquarium chain. The company has three existing locations — in Las Vegas, Layton, Utah, and Fort Worth, Texas, Each is in a mall.
“That’s our business model. It is a natural partnership,” marketing director Elsa Macdonald said, noting that malls provide the real estate, parking and food, and SeaQuest drives foot traffic. “It just goes with the whole new outlook of making malls more of a gathering place and a hangout place; a whole different experience.”
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Southwest Plaza is a unique case study because it underwent a $75 million renovation in 2014 and 2015 that drove its occupancy rate down to 40 percent. The mall’s tenant mix has gotten a bit experimental since work wrapped up. It now includes stores such as I Heart Denver, a shop selling only locally made art and goods, and the Makers Market, featuring small booths carrying items from a curated collection of artists.
Occupancy is now near 85 percent, said Sims, the center’s general manager. Between 20 and 24 percent of its leasable space is dedicated to dining and entertainment, including the spinning studio CycleBar and street-facing strip of restaurants separate form the food court inside. One of its anchor spaces is split in two. On the top floor is Dick’s Sporting Goods, and below is the only Colorado location of Round1 Bowling and Amusement, a 62,545-square-foot entertainment spread featuring 20 bowling lanes, an arcade, and billiards and pingpong tables.
At Lakewood’s Colorado Mills — another mall with a tenant mix in flux, but for a much different reason — dining and entertainment also make up a big piece of the pie. The enclosed mall and adjacent Denver West Village shopping center offer a combined 1.4 million square feet of space, 36.5 percent of which is occupied by restaurants and entertainment businesses, said marketing and business development director Brenda Cleary. Among the mall’s 125 active businesses are a Jumpstreet Indoor Trampoline Park and The 5th Dimension, where people can strap on a headset and dive into virtual reality.
By the end of 2018, Cleary expects Colorado Mills to be near 200 tenants, roughly the number it had before a colossal hailstorm in May damaged its roof and forced it to close for nearly seven months. Incoming tenants include an outpost of Los Chingones, a hip Denver-based taco joint. Mall owner Simon Property Group is being sued by a Colorado Mills tenant over lost business during the lengthy recovery from the storm.
Town Center at Aurora has its share of nonretail storefronts. On Sunday, the mall will celebrate the one-year anniversary of Bounce City, mall marketing director Candace Cedillo said. The 10,300-square-foot indoor playground features eight inflated bounce houses, slides and other kid-focused fun.
Two months ago, Glenn Goodson opened an A1 Boxing & Fitness gym on the ground floor of Town Center, near the J.C. Penney. Goodson, who has owned the original A1, on South Buckley Road, since 2007, said the mall was a fit for his second location because “the marketing part is built-in.”
The mall attracts the right demographic for his business: families with disposable income. Kids can come in and take a youth class while mom-and-pop shop. He has designs on opening a third location soon.
You’ll never guess where.
“Colorado Mills,” he said, “is the next one I am looking at.”