Sales have fallen by roughly half since the Keystone Crossing store opened, a decline company officials did not anticipate, Nordstrom said.The story mentions the upfront incentives offered to Nordstrom to lure it to open a store in the new mall back in the 1990s. It has long been rumored that, as part of that deal, Nordstrom, paid no rent for its anchor store; rather, it paid its share of maintenance fees only. When word leaked out last year that Nordstrom may not renew its lease at the mall, Deputy Mayor Mike Huber said the City would do whatever it took to keep Nordstrom in the mall.
“That really surprised us,” he said. “We have multiple stores in many markets.”
In addition, he said the downtown store is in need of a remodel, and the company wasn’t prepared to invest the money in it given the disappointing sales. The lease for the 210,000-square-foot store, which opened in 1995, is up for renewal this year.
Having a second Indianapolis Nordstrom was such a big concern for the mall developers back in the 1990s that they extracted an unusual concession from the company: that it would wait at least five years before opening another Indianapolis-area store.
The city originally enticed Nordstrom to open in the $319 million mall by offering a new building and tenant improvements at no upfront cost to the retailer. How much Nordstrom pays in rent is not spelled out in publicly available documents.
The downtown store opened well in terms of sales but couldn’t sustain momentum. Sales peaked in 1997, said Nordstrom, noting that convention visitors who shop at Circle Centre aren't picking up enough of the slack for downtown residents and workers.
The Keystone Crossing store is performing much better, Nordstrom said.
“Given the mass of retail in that Keystone/Castleton area, there’s just a lot more retail there,” he said. “We do better when there’s a lot of retail around us.”
Nordstrom said the downtown store’s closing is an isolated decision and not part of any larger plan to shut other locations.
“It’s very rare for us to close a store,” he said.
This is a devastating blow to Downtown Indianapolis as it prepares to host the Super Bowl next year. The City is spending about $12 million on improvements to Georgia Street adjacent to Nordstrom as a major pedestrian thoroughfare for out-of-town visitors. Visitors will be greeted by a boarded up storefront instead of one of the nation's top fashion stores. Many local people who frequently visited Circle Centre Mall have stopped visiting it because of the growing number of teen-age gang members that loiter in and around the mall. It has become the site of frequent shootings and criminal activity during the summer months, particularly during Black Expo's Summer Celebration. It's incredible how city leaders have allowed this one annual event to completely tarnish the image of downtown after so much money has been invested to make downtown a thriving and livable place from its dark days before Circle Centre Mall was built with taxpayers' money.