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

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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.

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  • kuan

    I think it would be interesting to consider how or if the city is adapting to acknowledge the shifting demographics in its urban core. Who is moving into the city, and what is their projected “stay.” Department stores like Macy’s are not “lean” entities. Because there is such a physical commitment to the site, I imagine it is necessary for them to associate their location with a customer that is just as “entrenched.” I think this explains the point, of course, of these department stores, which is to service your stereotypical nuclear home with 2.5 kids and a stay at home parent.

    I imagine the portion of this demographic who is choosing to “live urban,” is doing so in areas more towards the Central West End and down in South City (where the JCP is). This would also explain recent undertakings, such as the Whole Foods proposed (popping up?) down towards the Park.

    In light of this, are there alternative uses to the structures in downtown (which I remember having been told are unusual in that their floorplates are larger than typical for such an environment), that the city is seeking to incentivize to maintain the amenities that a Macy’s might have provided by in a manner that is more appropriate, both physically and programmatically?

  • Angelo Olegna

    The problem with retail is that there are only two kinds: Cheap, affordable, big names that attract people who’d rather go to a safe suburban mall instead of the scary inner city. Or kitschy, unique, independent that is cultural rather than necessity or more expensive than the chains.

    If we could have retail that’s functional, unique, and price-competitive there would be successful inner-city developments. But right now there is very little in-between the big boxes and tiny niche businesses.

  • John R

    Just to clarify for readers, University Square is in University Heights, a rather well-to-do, innerish-ring suburb of Cleveland. It is kind of hard to situate a comparison to the Saint Louis area,… think of it as if it were in the Clayton/Richmond Hts. area but w/o the interstate access..

  • Don

    Nothing would please me more than to see the Federal-Mogul site cleared and readied for new development.

    It’s my understanding this was a Wagner brake plant that manufactured asbestos containing brakes for cars and trucks. If this is true, it’s got to have serious environmental issues that has resulted in its endless use as an eye-sore and impediment to development.

    Does anyone know if any has tried to get it cleaned up? Federal-Mogul filed bankruptcy several years ago to get rid of it’s asbestos liabilities. Do they still own this site?

    • Todd Alan

      Moog Automotive shows up most often with ownership search but seems like from year to year theres Moog or Federal Mogal. I see one of the FM owners or somewhat regular basis I should ask. My gym is also next door so there twice a day and never seen a soul on property save for the one distant 24/7/365 security guard sitting in car in parking lot

      • Todd Alan

        Ikea in Hadley Township was a done deal. Everything needed from TIFs to moving the Shell Station to Menards end, to offers of 2.5 times a homes value plus 50000 to move, a memorial etc.was done One (maybe two) little old ladies refused, and since ikea doesn’t use eminent domain they walked

      • Don

        Moog Automotive is a division/subsidiary of Federal-Mogul.

  • JAE

    Don’t forget the Kmart at 6650 Manchester Ave in St Louis. Nearly the rest of the strip mall is empty (or a payday loan place); I don’t know if the development was ever full.

    • Don

      My understanding is that that development was the first time the City actually guaranteed loans and is the reason why they will never do so again — except when they guaranteed the loans for the One City Centre office tower that has now been re-branded 600 Washington (and I think ended well for the City, unlike 6659 Manchester).

    • Alex Ihnen

      Apparently that strip mall is ~90% occupied, however, with non-retail entities.

      • JAE

        ~90% occupied, really? I shop fairly regularly at that KMart (my nearest other similar store is the Brentwood Target, which is a headache to reach) and have never seen the strip mall remotely busy, employees or shoppers. Perhaps some company is using the buildings as warehouses, with truck traffic in back?

  • T-Leb

    Brick and mortar retail is pretty much dead. The “showroom” is no longer inside a building. If you want to see the most choices and competitive prices, that’s online. If brick and mortar retail is going to exist, it must be high volume or have a critical value add component.

  • Scott Jones

    It’s sad to see Macy’s go. I used to shop there as much as possible when I worked downtown to support it. Sadly though, I think the big urban department store model is dead. This isn’t necessarily a bad thing, department stores were the big-box-stores of their day.

    As for trying to encourage more big-retail I think this is the wrong approach. There are plenty of places for retail in the city already but they’re largely underutilized. Instead of trying to build a new big-box-lifestyle-chain-retail-center that will monopolize area retail the city should focus on encouraging local entrepreneurs start their own retail businesses. The city should focus on building locally-owned small to medium sized businesses in the existing underutilized storefronts. Many have been around for over a century and at one time they served all of the retail needs of almost a million St Louisans.

    Each neighborhood should have its own little “downtown”. This will usually be the old “taxpayer strip” of commercial buildings where the street car used to run. These are places where the bus now stops and are integrated into the city and accessible on foot or on bike. Some have been destroyed by Walgreens, strip malls and other chain stores but these can be brought back. By having multiple commercial centers you give each neighborhood a sense of pride and place. You also increase the areas of a city that are walkable & bikeable.

    If a developer wants to build a chain retailer it should be allowed to but it’s size should be limited (think CityTarget). It should be required to fit into the existing urban fabric (no vast surface parking lots). The city shouldn’t chase after such development though.

    The idea is that the more locally owned businesses you have run by St. Louisans the more “public people” you’ll have invested in the success of their city and neighborhoods. The more you have shop owners keeping an eye on the streets. The more you keep money in the local economy. What we have now is largely just “employees” and “consumers” for the big faceless chain stores.

    One last thought: almost every attempt to keep people in the city of STL by making it like the suburbs has failed–just like trying to attract big-box-retailers will. The city should instead focus on how it can differentiate itself from the surrounding suburbs by focusing on its history, urbanity, character, and sense of place.

    • dempster holland

      more neighborhood shoppingareas would be ver nice, but we should
      analyze why they no longer exist. I assume the prime reason is that
      the small neighborhood stores could not attract enough customers
      to survive. And to a great extent those customers shopped in larger
      shopping centers or supermarkets because the prices were lower.
      Also, the nearby population was less because housing density
      declined as people moved from small apartements to larger homes,
      and had greater mobility in cars rather than public transit.

  • Don

    Of the options suggested, the Union Station adjacent site seems most promising. I’ve also long felt that Olive from Tucker to Jefferson would be a prime spot for more development with a lot of under utilized ground and buildings. I used to fantasize that a Whole Foods would locate here or within a few blocks west of Jefferson.

  • Don

    What’s up with the old grain elevator on the Cortex site? Is it still used? abandoned? Long since abandoned? not in use but owned and maintained by solvent entity?

    I’d really like to see that go to make way for new development, but I’m guessing demolition cost would be significant.

    • Max

      That thing really bothers me every time I drive past it. It makes us look like a small farming community.

      • Don

        To me it’s not an eye sore; it’s wasted space and economic opportunity. I’m concerned the elevator is so large that taking it down would be so expensive that it just sits there sucking up space that could be put to solid economic use.

        • samizdat

          It wouldn’t necessarily be expensive so much because of its size, but as a result of elevators being built like bunkers, due to the explosive potential of the grain dust and static electricity.

        • John R

          Don, I think the grain elevators could be made into a cool calling card for the midtown skyline by incorporating a lighting installation and/or mural. Same with the Cargill silos across from the Arch. And for now, they certainly aren’t taking up space that is in demand…. Cortex area is huge and will be developing for a long time before it may have to take a look at that site.

          • Alex Ihnen

            Love the grain elevators.

    • Don

      I did some digging and it appears that this grain elevator is owned by the Ray-Carroll County Grain Growers, a coop dating back the Depression. It also appears to still be in use (which makes me feel better about it).

  • Paul Hohmann

    Traditional department stores are still largely stuck in the last century. They have responded to the onslaught of the category killers, the Targets, urban lifestyle centers and the slow death spiral of the mall model simply by consolidating, offering fewer product types, shrinking and closing stores in a triage like manner, but not really changing the overall store model or sales philosophy.

  • Don

    Maybe we just need to accept that the world has changed and downtown retail on the scale of a Macy’s will never succeed anywhere outside the most densely populated urban areas (New York, DC, Chicago). It wouldn’t surprise me if Macy’s didn’t also close the old Marshall Field’s store in the Chicago Loop. I was there a couple weeks ago and I could smell death.

    Mega department stores thrived in major cities across the country before there were any malls. Why would anyone go to Macy’s downtown when they can go to Macy’s at any mall with so many other stores, large and small?

    I always thought the city subsidizing the downtown Macy’s was a bad idea; what my grandmother would have called ‘throwing good money after bad.’ It only delayed the inevitable.

    The Railway Exchange Building is a treasure that needs to be repurposed or the future.

  • Hasan

    Frankly, the city didn’t utilize Macy’s as an asset so therefore Macy’s didn’t treat this store as such. That’s why Macy’s cut a lot things. Less revenues per sq ft, then less expenses per sq ft. And Macy’s isn’t wrong for this. It’s the City’s job to make the area more hospitable to retail tenants and to attract more people downtown. In this case, the City didn’t use all of their tools to their advantage. They should’ve tried tirelessly to get CityTarget to locate in the old Mercantile Building. This was outlined in an earlier ‘What Should Be’ post – The reason Macy’s didn’t succeed was because of lack of co-tenancy (and of course traffic).

    The building, to redevelop is a $100M dollar project. I’m not sure the building’s eligibility of additional incentives or tax credits. The building should be completely mixed use – that’s no surprise, everyone knows this. But what you have to get right is the price (residential, office, and retail rental rates) and most importantly, the tenant mix. Not just in the Railway Exchange building, but also the surrounding buildings on 6th, 7th, and Locust. Your anchor retailer is going to want to see a plan for the area. The better the plan, the more confident they’ll be in playing their role of an attractive anchor. Show them a half-assed plan, they will provide you with a half-assed store. And in this case, no, Macy’s wasn’t worried about losing customers at that location especially if they have locations at all the major shopping centers across the region.

    The Railway Exchange building needs a complete overhaul. And it will be even more expensive if tax credits aren’t available. I have the plan and have no problem sharing it with the appropriate decision makers.

  • threeonefour

    First, I’m going to assume that the IKEA comment is clever sarcasm, because IKEA never locates in downtown areas, not even in places like Chicago that seem like an urban utopia to so many St. Louisans.

    Also, I fail to see how the loss of a major anchor represents an opportunity. The city and the Macy’s could have and should have done more to make this location a success. The city gave Macy’s over $1 million in tax breaks on a five-year lease, and as a result, the store was downsized, the restaurants were closed, and the store is closing with three years left on the lease. And Macy’s leaves behind more than an empty space, it also leaves unanswered questions. Was it really a five-year lease? Was there no-compete language that would keep any competitors from leasing the space? And what retailer would want to locate there- even with more tax breaks- when Macy’s made plans to leave less than halfway through the lease?

    Finally, I agree with Kevin. Even with the store’s shortcomings, Macy’s Downtown was always my first choice. Sometimes it was the reason I went downtown- and other times I went there because I was in downtown. But the store failed to deliver on so many promises. It brought back holiday events only to eliminate them last year. It started decorating the windows after the switch from Famous-Barr, only to scale back that effort as well. They only offered extended hours and validated parking during the holidays. They could have kept part of the fourth floor space to keep the link to the adjacent parking garage, which may have helped in conjunction with validated parking to get shoppers back. But most of all, people needed a reason to come back. They closed the restaurants, but more importantly, all of the events, celebrity appearances, etc. were still scheduled at the Saint Louis Galleria, West County, and Chesterfield locations. So there was little if any promotion of the downtown store after the remodel that was supposed to make it viable.

    Some may think I am a sentimental fool for lamenting the loss of Macy’s. But this is a major step backwards for downtown and there’s no way to spin it otherwise in my opinion. It was a convenient option for tourists and convention goers in a downtown that has few if any shopping alternatives. I think downtown will be fine long-term, and the Railway Exchange Building will hum with activity once again, but this is a blow to the progress made a couple of blocks north at Mercantile Exchange. Now that the sales tax in the city is already one of the highest in the region, how much more can the city give away to get retail back into this building?

    • threeonefour

      I should also add that this is the 100th anniversary of the Railway Exchange Building, and there has been a department store in business there the entire time. Happy Anniversary, REB. And rest in peace, Famous-Barr. That’s the magic of Macy’s.

  • A major problem with Macy’s is that its window dressing was just that. There was no view into the store itself, which discouraged pedestrians from peering in/going in.

    This works fine for malls, where 95% of your customers are driving there for the express reason of shopping. But downtown, you need to pull people in — and a white wall window box with mannequins wearing Cardinals gear just won’t cut it.

    • citylover

      I agree. I think a Macy’s in a building with large windows and bright lighting would intrigue shoppers. (any retail for that matter). I used to think the RWE was some kind of warehouse for Macy’s.

      The store has definitely had its heyday though. My mom talked glory of Famous and Barr when she went to shop there after work at Laclede. Great stories, I hope the Railway Exchange is revitalized, maybe just not the best place for inviting retail until more residents live downtown. I think a TJ Maxx and H&M would do well as an anchor for Wash Ave (close to MX) or on Broadway/ 4th close to Wash Ave.

      Maybe they could even demolish Kiener Garages for retail/ residential! Or would those be best for future office towers?

  • Presbyterian

    Macy’s is a loss. But that store had limited hours and fostered very little street life. I see opportunity in the loss.

  • Steve

    Since everyone loves imagining our future IKEA, why not put it where Macy’s is/was? That’d be a pretty unique situation, right?