- Lakeside Mall in Sterling Heights closes for good Sunday evening
- Next for the mall will be the early stages of a $1 billion redevelopment
- Anchors Macy’s and JCPenney will remain open at the mall as the building around them is demolished
One of Michigan’s largest malls closes its doors for good at 6 p.m. Sunday, ending decades as the centerpiece of a robust Sterling Heights retail district and setting the stage for a $1 billion redevelopment.
Lakeside Mall was a retail powerhouse when it opened in 1976, driving development around the M-59 corridor in Macomb County and pulling in top retailers that paid high-dollar rents across the property’s 1.5 million square feet.
But as malls struggled after 2000, this mall suffered steep losses in tenants and shoppers. The situation prompted Sterling Heights officials to create a plan for the mall’s 110 acres that would restore vibrancy.
Developer Out of the Box Ventures bought the mall and also bought into the city’s vision for its redevelopment, and the company is now leading the plan to remake the property.
Here is what to know about Lakeside as the renovation plan launches on Monday:
1. History
Michigan helped to create the enclosed mall in the 1950s when JL Hudson opened a department store to anchor Southfield’s now-closed Northland Mall.
Michigan-based Taubman Co. embraced mall development across southeast Michigan, opening Briarwood Mall in Ann Arbor in 1973. It followed with Fairlane Mall in Dearborn and Lakeside, both opening in 1976.
Like Fairlane, Lakeside’s look was fresh and interesting in a 1970s way: multiple levels and walkways; skylights; sculptures; a glass elevator at center court, next to sunken and sculptured seating.
Circa 1976 postcard of Lakeside Mall in Sterling Heights I recently acquired.#SterlingHeights pic.twitter.com/4eXRn8luX6
— Michigan's Past (@MichiganHist) July 12, 2021
Rather than being built in an inner-ring suburb, Lakeside was located in central Macomb County on M-59 — or 20 Mile Road — helping propel growth in the area.
A decade ago, city officials recognized the mall’s role as an economic driver, as well as the limitations of the property, and began studying how to reimagine the space. At that time, owner General Growth Properties could not afford upgrades, and the company defaulted on its loan on the mall in 2016.
Remaking the mall building would involve multiple owners, the city discovered, since anchor stores are separately owned. It also has limited uses, given the configuration.
Many years went into planning what could work for the mall property, City Manager Mark Vanderpool told Bridge Michigan in spring. Officials and their consultant looked at factors that could balance the uses in the property and create demand to be there.
Eventually, they determined that a variety of housing, a “Main Street” design and more density could make the property viable for an owner and the city.
The effort is “very complicated,” Vanderpool said then. “But it’s so important. As a city, we could have sat on the sidelines and let market forces prevail.”
2. The plan
The $1 billion remaking of the property will include 2,800 apartments, a park, walking trails connecting the rest of the city and about a 90% reduction in store space.
But forget about the “moat” of parking spaces that surround Lakeside.
The $1 billion renovation plan could take 20 years and undergo revisions, developers say. But the ultimate plan is to use the mall’s footprint for far more than a single building. Apartments, retail, restaurants, a ‘main street’ with on-street parking supplementing parking decks and green space all will be a part of it. (Courtesy image)
According to the plan, a network of "great streets" will crisscross the new Lakeside. The developer envisions “each with its own unique character and adaptability to support local businesses and community events,” according to a statement from Out of the Box.
Related:
- Lakeside isn’t dead. It’s awaiting a $1B rebirth. Can Michigan malls follow?
- Michigan invented shopping malls. Photos show rise, fall, rebirth since 1954
- Lakeside Mall to close July 1, paving way for $1 billion redevelopment
- A Sears comes down, apartments go up at Michigan mall. Is this the future?
The statement continues: “These tech-ready streets will seamlessly blend work and play, encouraging residents from nearby homes to actively engage with the heart of the community.”
Completing the redevelopment could take 20 years, Out of the Box has said.
3. Development funding
Out of the Box Ventures is a subsidiary of Miami-based Lionheart Capital. The company specializes in value-growth investments around the U.S. It also owns some closed anchors at the Lakeview Square Mall in Battle Creek and Bay City Town Center.
The project is designed to be financially self-sustaining, funded by new property tax revenue generated by the development.
The Lakeside plan also calls for public money: The developers expect at least $70 million in state incentives, possibly through a transformational renaissance zone. The city will issue $45 million in bonds, and $3 million was earmarked by the state for the developer to acquire properties not part of the mall acquisition.
4. Mall trends
There’s a mall resurgence today, notably in locations with higher-end stores and tenants who do more than sell apparel.
“Malls have enjoyed consistent growth in foot traffic over the past two years,” according to a recent report from Placer.ai, a retail foot traffic analytics company.
Shoppers are younger and more affluent, a mix that will still create winners and losers among traditional malls. Those appealing to that mix are the most likely to thrive, experts said.
In the meantime, mall owners like Out of the Box are looking to massive redevelopments.
Simon Property Group, the largest mall owner in the U.S., last spring announced a $1.5 billion five-year plan to add density and new uses to its mall properties, starting largely with California and the northwest U.S., also including Briarwood Mall in Ann Arbor.
But some mall owners also are slowing their redevelopment plans.
In 2018, Brookfield Property Partners — which in Michigan owns Southland Mall and Grand Traverse Mall, among others — planned to turn its 125 malls into minicities with housing, offices and stores.
According to a recent report in the Wall Street Journal, that vision has been delivered in only two malls, in Atlanta and near Seattle. Two more are in the pipeline, the report said, adding: “The slow pace of its redevelopment efforts shows how difficult, expensive and time consuming it is to revamp enclosed malls.”
Activity at Lakeside slid over the past several years, falling further this spring as more tenants left in anticipation of the closure. Macy’s and JCPenney will remain open, even as the rest of the mall is demolished. (Bridge photo by Paula Gardner)
5. Right after closing
Out of the Box is working with Sterling Heights as the company plans a public sale of Lakeside’s interior fixtures, furniture and equipment.
A local charity will benefit, the company said.
Three monumental sculptures by artists Bruce Beasley, Buky Schwartz, and Fletcher Benton “will be repurposed and rededicated within the newly reimagined public spaces,” according to a company statement.
About 30 acres will be used for public spaces.
Retaining the sculptures on the property “will enhance the community's cultural landscape and preserve the artistic legacy of Lakeside,” the mall owners said.
However, two Lakeside Mall stores will remain open: JCPenney and Macy’s, which operates two stores at the mall.
This year, a 2.5-mile recreational trail will connect the mall property to a network of other trails in the city.
