The president and CEO of Chattanooga-based CBL, a pioneer in the shopping mall industry, on Monday gave the Hamilton Place Rotary Club an overview of the future of malls. The company was founded 40 years ago by Charles B. Lebovitz, and bears his name. His sons Michael, who is now president of the company, and Stephen, who is CEO, told the club members of their vision for change and transformation of the 62 retail malls owned by the company. Malls are only a portion of the 72 million square feet of property that the company owns and manages, including open air shopping centers, office buildings and community centers.
The business has changed in the last few years, pushed by technology, said Stephen Lebovitz, who plans the strategy for the company.
CBL is now in the process of redeveloping malls that were built in the 60’s, 70’s, and 80’s. Concepts of success today are different than in the past, he said. The changes will transform the way the properties are used.
The traditional enclosed malls are being diversified and converted to “suburban town centers” consisting of restaurants, medical offices, entertainment destinations, hotels, office buildings, medical offices, storage facilities and residential spaces among other uses. The parking lots are also being utilized with new development. The infrastructure is in place, he said, now the company wants to make it relevant for today.
To be successful, CBL is striving to offer an experience not just a transaction. Examples given include a bar that is in the center of the public spaces at Cool Springs Mall in Nashville, or a casino that replaced a department store that closed in a Pennsylvania mall. He said people are also interested in businesses that have a connection with their customers such as Box Lunch, which helps provide a meal for a person in need with a $10 purchase and religion-based Altar’d State, which takes prayer requests. Additionally, he said that online businesses are beginning to open physical stores and CBL is offering short term rentals to some of those in order to provide a new group of retailers. CBL would like to incorporate the type of businesses that are growing into the malls, said Stephen Lebovitz.
Michael Lebovitz is in charge of the implementation of construction related to development and the changes that are being made. He said there are currently 20 projects both large and small that are in progress. The mall buildings were not constructed with re-development in mind and the alterations are complicated by utilities buried under the parking lots, easements and buildings that are privately owned by individual businesses.
There are 30 Sears stores in their portfolio. CBL has been working on redevelopment plans for the Sears space at Hamilton Place Mall for the last 3-5 years because the stores have been in a declining state for a long time, he said. At Hamilton Place that area of the mall will become a mixed use property with office space, retail, restaurants and a hotel. These new businesses are expected to bring more people to the mall than the store that has closed. There will be a Dave and Busters, an Aloft Hotel with 140 rooms and a rooftop bar and Dicks Sporting Goods in addition to first class office space. Several other restaurants are also planned in the parking lot.
Northgate Mall is considered to be a “community mall” not expected to attract national businesses. J.C Penney closed several years ago and that building is still vacant because a third party owns it, not CBL. In the space occupied by the former free standing Sears auto center in the parking lot, CBL is putting two restaurants - Panda Express and Aubrey’s. That mall is 95 percent occupied, said Michael Lebovitz.
Across the country there are retail stores closing. Redevelopment is now an industry trend, he said. CBL is trying to give customers what they want - value and convenience.