February 27, 2003

Third time’s the charm for Lakewood retail

  • Lakewood Mall transforms to open-air shopping center
    MBK Northwest

     Lakewood Towne Center
    Photos courtesy of MBK Northwest
    Lakewood Towne Center, which replaced Lakewood Mall, is a mix of retail, entertainment and civic center.

    From the picture windows of his second floor city hall office, Lakewood Mayor Bill Harrison overlooks the heart of his city. While the view was not always satisfying, these days it’s down right spectacular.

    That’s because Harrison has seen his city take shape right before his eyes as a new retail center has brought vast improvements to the 100-acre site that stretches out below his window, and provided substantial tax revenues to the 6-year-old city.

    “Seldom do elected officials have the opportunity to see the fruits of their labor unfold before them on a daily basis,” Harrison said. “But, I have been privileged to witness the Lakewood Towne Center rise, Phoenix like, from what was the moribund Lakewood Mall. It has been a great pleasure to work with MBK Northwest to bring a dynamic and citizen friendly ‘Main Street’ to Lakewood.”

    Lakewood Towne Center, which opened in early August and now serves as the core of the city, was redeveloped by Portland-based MBK Northwest from the Lakewood Mall, a failed shopping center which never served the needs of the city’s residents and suffered from a poor reputation.

    This was in part because of its poor configuration, but mostly because a good portion of the center’s buildings stood empty, creating the feeling that the mall was half abandoned and neglected.

    “The image of a struggling mall right in the heart of Lakewood had also spilled over to the larger community,” Harrison said. “So, it was clear that the mall needed to be redeveloped for both financial and imaging purposes.”

    The approximately 100-acre site that had become the Lakewood Mall was originally developed as a retail site in the 1950s. The first incarnation was called Villa Plaza, which was comprised of a Liberty House department store, JC Penney, a bowling alley and many other specialty stores. It was not long after the opening of the nearby Tacoma Mall that Villa Plaza started to decline.

    In 1985, the property was redeveloped with the addition of a 682,922-square-foot enclosed mall section and preservation of about 515,000 square feet of strip retail. The new center, renamed Lakewood Mall and anchored by Target, Lamonts, Emporium, Mervyn’s and Frederick & Nelson, opened in 1989. Again, it was not long before decline set in. But, this time the problems were internal.

    The center was poorly configured, had several weak anchor tenants and suffered from inadequate access and inconsistent management. Though the mall was one of the largest shopping centers in the Puget Sound region, its sales per square foot was only about half that of other area malls and it was once again put on the auction block.

    Lakewood Towne Center is a “power center” — with national tenants like Michael’s.

    Numerous developers looked at the center, but the problems seemed too overwhelming and one after the other declined to purchase the property. In 1999, MBK Northwest toured the site and saw right away that the property has tremendous potential.

    “It is true that the Lakewood Mall’s problems concerning anchors, design and accessibility were immediately visible,” said Mason Frank, president of MBK Northwest. “In fact, the first time we visited the property I was amazed when I entered one of the vacant shop spaces within the enclosed mall and saw that it still had dirt floors. The architecture was attractive with beautiful marble finishing throughout, but it had never been occupied.

    “I was also struck by the fact that though the mall was located at the physical center of the community, none of the main streets led traffic directly into the property.

    “However, we had studied the area’s demographics before that first visit and knew that Lakewood was one of the state’s largest cities with about 100,000 residents including the outlying areas,” Frank said. “We realized that there were plenty of retail dollars available within the town, they just weren’t being spent at the Lakewood Mall.”

    A retail market study conducted by Herbert Research on behalf of the city revealed that more than 40 percent of all Lakewood residents shopped out of town for non-grocery items, resulting in the loss of more than $66 million, including associated sales tax revenue. When grocery dollars were added in, the retail leakage from Lakewood stood at more than $100 million.

    “My development team and I felt that if the mall were reconfigured and access improved, successful national anchor tenants would be drawn to the site because of the area’s positive demographics,” Frank said. “In turn, the right choice of tenants would bring much needed retail dollars back into the city.”

    Because Lakewood Mall was centrally located, city officials wanted the project to serve as both the physical and symbolic heart of Lakewood. To achieve this, they decided to relocate City Hall within the boundaries of the mall property. They also decided to build “Main Street,” which would lead traffic directly into the center and continue on to front City Hall.

    The city also agreed to work with MBK on constructing a second public road, now named 59th Street, to run through the center and connect to Main Street in front of City Hall.

    MBK’s redevelopment plans for Lakewood Mall would transform the property from a dysfunctional enclosed site to an open-air shopping destination with four components, including a civic center with City Hall as its centerpiece, a neighborhood retail center, a power center and an entertainment center.

    The redeveloped project would be renamed Lakewood Towne Center to reflect the synergy between civic and retail activities.

    In October 2001, MBK began demolition on the enclosed portion of Lakewood Mall and construction of the new open-air centerpiece to replace it began shortly thereafter. This area now serves as the project’s power center, while the peripheral strip buildings have been given new facades and have become part of the new neighborhood retail and entertainment centers.

    When Lakewood Towne Center is completely redeveloped, total costs will likely exceed $80 million.

    Civic center

    The 71,000-square-foot civic center is anchored by the three-story Lakewood City Hall, which also includes the new municipal court. The 8.5-acre site is beautifully landscaped and has space for further development by the city, including a 42,000-square-foot vacant building, which the city is considering for another civic facility.

    Neighborhood retail center

    With 311,600 square feet of space, the neighborhood center is anchored by a new 62,800-square-foot Safeway, the largest in Pierce County. The center also includes such notable retailers as Office Depot, Burlington Coat Factory, Hills Hallmark, Payless Shoe Source, Supercuts, Key Bank, Wells Fargo, Firestone and the 40,000-square-foot Lakewood Marketplace.

     Bed, Bath and Beyond
    The new center has a better configuration than the old mall, with stronger anchor tenants.

    Power center

    Demolishing the nearly vacant main structure of the Lakewood Mall made room for a 490,000-square-foot “who’s who” power center. New national tenants brought in by MBK include Bed, Bath & Beyond, Ross Dress For Less, Old Navy, Michael’s and G.I. Joes. Existing tenants who became part of the power center include Target, Barnes & Noble, Gottschalk’s and 24-hour Fitness.

    Entertainment center

    MBK’s goal is to create an entertainment dining experience that includes the existing 50,000-square-foot, 12-screen Loews Cineplex Theater. The theater element will be joined by a mix of new restaurants, whose leases are currently being negotiated.

    “When we first began the redevelopment process, it felt like a gigantic jigsaw puzzle,” said David Moore, senior vice president of MBK Northwest and head of the Lakewood Towne Center development process. “We had to keep existing tenants in business during the construction process, which is always a complex exercise, especially in terms of ensuring safety and providing adequate parking at all times. We also had to relocate many of the existing tenants so they would be positioned within their appropriate retail category, whether neighborhood, power or entertainment.

    “Lakewood Towne Center also proved to be a challenging project because of the current economic climate,” Moore said. “During a time when many retailers’ expansion plans had come to a stand still and numerous others were declaring bankruptcy, it was more difficult to lease up Lakewood Towne Center.

    “However, two major factors helped us overcome the initial hesitancy some retailers expressed about establishing a presence in Lakewood. First, the retailers with whom we initially met realized that we were completely reconfiguring and re-imaging the property. Then, once a critical mass of retailers including Old Navy and Bed Bath & Beyond signed leases, others recognized the potential the center offered and they signed leases shortly thereafter.”

    “The revenue from Lakewood Towne Center will allow us to continue the vast improvements that have already taken our city in a very positive direction,” Harrison said. “It has been a privilege to watch Lakewood Towne Center evolve into the symbolic and physical heart of our city and witness the growth and advancements that have transformed Lakewood from a neglected suburb into a vibrant, progressive city.”

    MBK Northwest has just begun construction on Phase II of Lakewood Towne Center, which includes the addition of PetsMart, Pier I and the relocation of Office Depot and Burlington Coat Factory. The opening of Phase II is slated for August 2003.

    Dawn Baerlocher is project manager for Portland-based MBK Northwest, a specialist in redeveloping under-performing retail properties. She can be reached at (503) 636-2800.

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