As Downtown Macy’s Closes, Where Will Retail Find a Home in the City?

Downtown neighborhood - STLWith the news that Macy’s is closing its downtown St. Louis store this summer, the era of downtown department stores comes to a close. The past decade has seen many positive trends in downtown development. From 2000-2010, the city experienced the largest percentage increase in college-educated 25-34-year-olds moving to with three miles of the central business district of any city in the nation. Nearly 2,700 people in St. Louis fit that description, an increase of 87% over the past decade. The Central Business District population increased by nearly 3,000 over that same period. The retail demographics are changing quickly.

It’s not just downtown where retail development struggles. The only Target within the city limits is at Hampton Village is south city (there's a JCPenny there as well). Walmart? There isn’t one? TJ Maxx? Nope. Best Buy (yeah, they’re dying everywhere, but…)? Nope. Old Navy? Uh, uh. If you want to buy a broom, some shorts, a light bulb, soap, a towel, contact solution and a coffee maker without five stops, there are very few choices in the city.

retail map
{Macy's=pink circle, BPV=red, Bottle District=blue, 21st Street=green, Federal Mogul=purple, CORTEX=orange, Pruitt-Igoe=yellow}

A retail development such as University Square in Cleveland, OH may be a template for retail success in the city; a more urban version of Hampton Village. At nearly 18 acres, the development includes: Charter One Bank, KeyBank, and National City Bank, Macy’s, T.J. Maxx ‘n More, Target, GameStop, Verizon Wireless, Applebee’s, Cold Stone Creamery, Famous Footwear and Foot Locker.

University Square_CLE OH
{University Square – Cleveland, OH}

None of these may be the independent business we would like to see fill corner shops and revitalize forlorn historic commercial districts, but there’s a simple economic problem occurring that the city would be wise to address. City resident retail spending is fleeing the city faster than residents and jobs. Short of proposing that a new central city retail development would help retain residents, it can at least retain residential spending. So where could this happen? At least four sites are large enough and enjoy high visibility and easy access:

21st street interchange/Union Station – Union Station once tried the carnival marketplace shtick. It worked, for a bit. But now, the 21st Street interchange infrastructure is crumbling and the northern expressway won’t be built.  There potential for 20+ acres of new development at the site. Located very near I-64 and MetroLink, the site could accommodate significant retail at a prime location.

union station tod
{infill is planned as the old 21st Street infrastucture is replaced}

The Bottle District – totals 17 acres sitting just north of the Edward Jones Dome. It seems unlikely that the Rams will be playing in this building after 2025 at the latest. Could a retail district at the Bottle District be expanded and better connected to downtown if the dome were gone and another half dozen acres opened for development?

{the Bottle District sits vacant, no part of the NorthSide Regeneration footprint}

Ballpark Village – roughly 10 acres and an unlikely candidate for significant retail development. Cordish remains the developer for the long underachieving site. A $100M start that includes a cowboy bar, a Cardinals Hall-of-Fame and a Budweiser themed restaurant was recently announced. Even in the heyday of gleaming towers and residential promised, large-scale retail wasn’t in the mix at BPV.

Ballpark Village 2013
{BPV then (top) and now (bottom) is devoid of retail, hotel or office space for the foreseable future}

CORTEX – Billed as the new hub of innovation and research, the 200+ acre site plan now shows close to 20 acres of retail development at its east end. Bordering Forest Park Avenue and Vandeventer, IKEA has explored the site and other retailers may be in the mix. The adjacent Federal-Mogul site has perviously been rumored to be a possible site for a Target and other retailers. A new MetroLink station between Sarah and Boyle would add transit access. If something like a University Square is built here, it would vastly decrease the possibility of large retailers located nearer the downtown CBD.

CORTEX - St. Louis, MO
{CORTEX has space and plans for retail at the east end}

Pruitt-Igoe – At the heart of the NorthSide Regeneration project, developer Paul McKee has an option to purchase the 33-acre site. Considered to be a redevelopment challenge due to likely extensive and unknown environmental pollution, it seems unlikely to be the location of significant retail development in the near future. In addition, it's the furthest removed from highway access and furthest from existing employment centers and other attractions, among the sites examined here.

*Notes of the Railway Exchange building: built in 1914, it is 21 stories high, occupies a city block and encompasses 1.2M square feet of interior floor space. It was the tallest, and easily the largest, building in St. Louis when it opened. Long the headquarters of May Department Stores, and site of their flagship Famous-Barr (opened in 1924), it was converted to a Macy's in 2006 as May was acquired by Federated Department Stores. Macy's sold the building in 2008 for a reported $18.5M to Bruce Development. According to the St. Louis Business Journal, the developer has received $27.8 million in subsidies for redevelopment of the building, which includes $23.8 million in tax increment financing, the creation of a $1.4 million Community Improvement District, a $1.6 million transportation development district, and a $1 million city sales tax rebate for Macy’s. The Famous-Barr, then Macy's once spanned seven stories and was recently reduced to three.