The newly gussied-up Pacific Place shopping mall downtown wants your business.
After a multimillion-dollar redevelopment, the mall announced at the end of July that it was finally “ready to welcome customers and tenants to explore its new, light-filled, pristine spaces.”
The renovation lasted two-and-a-half years, but it may have seemed even longer. Much of Pacific Place had been off-limits during the construction, swathed in signs promising that “exciting changes are underway.” Expectation abounded for the reopening: The “Northwest contemporary” design promised to weave “quintessential natural elements of the Pacific Northwest in an abstract manner.”
The result turns out to look a lot like the old Pacific Place, though much brighter, thanks to a rejiggered color scheme and several stories of windows rising above the mall’s two entrances. Pleasant foliage sprouts throughout.
And it does seem pristine, though for the wrong reason: There are barely any stores. The mall has just 16 tenants; of those, 12 are open. It’s not clear what proportion of Pacific Place’s 335,000 square feet is empty, but the space felt cavernously vacant on a recent midweek afternoon.
Much of Pacific Place’s hollowing-out is undoubtedly due to the twin pressures of the retail apocalypse and the pandemic. But some store owners and employees — who asked not to be named to avoid jeopardizing relations with their landlord — said the long-running renovation had decimated foot traffic and likely made it harder for the mall to fill open spaces.
“We can’t speak for each individual tenants’ reasons for departing,” said the mall’s general manager, Elena Arosteguy, in a statement. “The city is changing, and our redevelopment strategy has always been in line with serving a modern and metropolitan destination.”
The mall is advertising “pop-in” opportunities for local retailers who want to “test-drive” a storefront with leases as short as one day.
Arosteguy declined to disclose how much the renovation cost. Mall owner Madison Marquette took out a $207 million loan in 2016 in part to fund the redevelopment. The rest of that loan went to refinance its 2014 purchase of the mall for $271 million and to buy the Pacific Place parking garage from the city for $87 million.
Nearly two-thirds of the mall’s tenants decamped over the course of the renovation. When it announced the redesign in 2017, Pacific Place had more than 50 tenants, according to contemporary media reports. By this January, that number had fallen by more than half, to just 21 tenants.
Some retailers — Barneys New York, Barnes and Noble, Victoria’s Secret, Brookstone, J. Crew — closed their Pacific Place storefronts amid plummeting brick-and-mortar revenues. (Barneys went out of business in August 2019.) Others, including local brands Trophy Cupcakes and jeweller Something Silver, quietly bowed out of their Pacific Place leases.
The mall reopened from pandemic lockdown in early June,days after protestors broke windows and sprayed graffiti at the mall during demonstrations over the Minneapolis police killing of George Floyd.
Customers in large numbers have not returned. At the AT&T store on the lowest level, an employee said it’s a busy day when 10 customers walk through the door.
Malls have been dragged down in the pandemic undertow, raising questions about how Pacific Place and others will navigate the months to come.
Measures to contain the spread of the pandemic temporarily shuttered most Seattle-area malls through mid-summer. Major tenants including Lynnwood-based Zumiez and Nordstrom have stopped paying all or a portion of their rent.
As rent collections plunge, retailers and mall owners are missing their mortgage payments. Retail is second only to hotel lodging in terms of underperforming loans, with 16.1% of securitized retail mortgages 30 or more days delinquent as of July, according to mortgage analytics firm Trepp — double the previous record high, during the Great Recession, of 8.14%.
Between a tougher environment for big-box retail and the onslaught of coronavirus lockdown, many malls may not be around for much longer. Analysts predict the pandemic could close as many as half of the roughly 1,100 malls in the U.S. for good.
Simon Property Group, the largest mall owner in the nation, is in talks with Amazon to convert department stores into warehouse distribution hubs, the Wall Street Journal reported. In Washington, the group owns five malls, including Seattle Premium Outlets and Northgate. Simon announced in 2018 it would redevelop Northgate, which posted weaker revenue per square foot than Pacific Place, into apartments, office space and a new NHL training center.
Information from The Seattle Times archives was included in this report.
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