Thursday, May 26, 2011

Nordstrom's Departure From Circle Centre Mall A Big Blow To Indy's Downtown

A key anchor store for Indianapolis' Circle Centre Mall announced today it would be closing its store on July 31. Nordstrom claims sales at its Circle Centre mall plummeted nearly 50% after the upscale store chain was lured by Simon Property Group to open up another store at its Fashion Mall at Keystone Crossing. From the IBJ:

Sales have fallen by roughly half since the Keystone Crossing store opened, a decline company officials did not anticipate, Nordstrom said.

“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.
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.

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.


Concerned Taxpayer said...

Maybe if people didn't have to pay $10 to park and then worry about being raped, robbed, beaten up, or shot, they would shop downtown more often.

Cato said...

It's a huge blow, as it reveals just how flawed the city's thinking is at focusing all the attention on Downtown while neglecting almost every other part of town.

Facts is facts, and Downtown just don't stay running when you pull the can of starting fluid away from the carb.

I can't believe that this is so obvious, but Downtown cheerleaders still want to argue for more money.

Cato said...

By the way, Gary, why do they not force BlackExpo to be held at the State Fairgrounds or the Marion County Fairgrounds?

I heard that Black Expo still owes the State Fair some money, but I haven't tried to confirm this. Either of those locations would be great. Lots of parking. Room to spread out. Controlled access.

I can't see the wisdom in keeping BE at the Mall.

Cato said...

This is an excellent time to remind everyone of one of Downtown's greatest hindrances: you can't get to it.

Everything that matters in Indy is Broad Ripple and northward.

There is no way to get from Westfield, Carmel, Nora, Broad Ripple, etc. to Downtown. The city streets are scary, poorly maintained and slow. Surface streets aren't an option. If the choice is going to Castleton or Keystone at the Crossing or fighting your way Downtown over surface streets, well, that's a very easy choice.

Indy needs to dig up a lot of land and build an Interstate from the North Side to Downtown, southward to Bloomington and Evansville. Turn Meridian, Washington, Central, College, or Keystone into an Interstate, but get me four lanes, each direction, of 65 mph from Carmel to Downtown.

This gaping hole in infrastructure will continue to hamstring Indy and its Downtown.

Gary R. Welsh said...

Yeah, I-65 and I-70 running directly through the downtown just won't cut it. Surely you jest, Cato.

interestedparty said...

I think traveling surface streets is nice. You actually get to see the environs -- the neighborhoods and the people -- the community, if you will. Yes, the interstates are efficient, they get you somewhere and back, but you miss the ambience along the way and you skip being part of the community -- trading connection for a destination out-of-context.

Slow down and smell the roses!

Susan McKee said...

The parking meter increases are yet more reasons to avoid downtown.

You don't pay to park at Keystone at the Crossing (and there aren't any of those "scary teenage thugs" running around either.

Leaving Circle Centre mall is the right business decision for Nordstrom's.

Cato said...

Buy a map, Gary. Neither 65 nor 70 go through Broad Ripple or Carmel.

Jeff Cox said...

Interested party,

Most people get on the road to travel from one place to another in the least amount of time, not to be tied up in poorly synchronized traffic lights while "taking in the ambience." When it takes too long to get someplace, people will find other options. And, frankly, most people wouldn't care for the "ambience" of 38th and Meridian. Or 38th and Keystone. Most people also want to just live their lives as they choose and not have a forced socialization of "community" rammed down their throats.

The state really messed up when they did not convert Binford Boulevard to interstate standards and extend 69 to downtown. Many of the traffic issues in Castleton/Fishers would have been alleviated with this one simple step.

Covenant60 said...

This could be the beginning of the end for downtown. Unless they find a way to fill that space.

I live in Greenwood, btw, and my wife and I enjoy the drive north on Shelby to Fountain Square. We rarely drive further than that.

Several nice restaurants and shops if FS, including the Rooftop. Beautiful view of downtown, ironically.

Paul K. Ogden said...

Jeff Cox said: "The state really messed up when they did not convert Binford Boulevard to interstate standards and extend 69 to downtown."

I remember Hudnut saying that was the biggest mistake made as to Indianapolis.