With one in four or five U.S. malls expected to go out of business in the next seven years, the operators of Santa Barbara’s Paseo Nuevo are shoveling $20 million into renovating the 30-year-old, downtown, open-air shopping facility.
With a traditional ground-breaking ceremony April 9, city and mall officials celebrated the start of they hope will be a breath of new life into Paseo Nuevo.
Depending on which business or economic expert weighs in on the future of retail, malls are either dying because of increasing online sales, or evolving since young people have more purchasing power.
Still, tens of thousands of U.S. stores will be shuttered by 2026, according to Forbes Magazine. However, Forbes also notes that some malls are trying to survive by making shopping less of an errand and more of an “experience.”
That’s what the Paseo Nuevo renovation seems to be more about, rather than just adding traditional retail. The renovation includes more gathering spaces, dining, art and entertainment.
However, the 500-pound gorilla in the room remains: What will happen to the vacant former Macy’s building at the south end of the mall. And, what about rumors that Nordstrom’s at the north end may close at some point? How can a mall lose two anchors and still survive, especially if recession hits again.
The Paseo Nuevo managers, Pacific Retail Capital Partners, hope to have more dining in the mall, but anyone who looks around the downtown area can see the early demise of so many eateries.
On upper State Street, La Cumbre Mall muddles along with the closure of Sears, one of its anchor stores. The other Macy’s in town is still open, for now.
And, crammed into a mini-mall once known as the Galleria, Target opened one of its smallest stores around amid much fanfare and very little parking. It was hoped that shoppers would call in their orders and just pick them up.
By contrast, just look 30 miles south to Ventura’s sprawling indoor Pacific View Mall. New retail stores such as Forever 21 moved in recently. And a 24-Hour Fitness opened in December.
Obviously, Ventura is doing something right. Let’s hope the Paseo Nuevo renovation, set to be finished by next year, continues to bring in some $100 million in gross sales annually.