RACINE — The first steps of Regency Mall’s planned rebirth are underway.
This week the mall’s owner, Hull Property Group, is starting its long-anticipated interior renovations at Regency. The Augusta, Ga., company bought the mall in late 2016 for $9.5 million with the intention of turning it around — Hull’s specialty.
Regency Mall, which opened in 1981, has about 700,000 enclosed square feet on 76 acres. It is what Hull executives and owner Jim Hull call a “failed mall.”
HPG has more than 40 years of experience in retail real estate. It has a history of acquiring and repositioning underperforming enclosed malls and shopping centers in small- to mid-size markets. HPG owns 30 regionally enclosed malls in 13 states and 15 shopping centers.
Part of HPG’s revitalization strategy for malls is to spend millions of dollars on what the company calls “sacrificial investments” in each failed mall to transform the interiors and greatly modify the exteriors.
The first step, now underway at Regency is to hide the jail-like vacant storefronts covered by metal caging. HPG replaces those stretches with solid walls which are then covered with murals; historic, iconic community photos; quotes and inspirational messages and so on.
The new walls will have architectural flourishes such as chair rail, crown molding and wainscoting, said John Mulherin, Hull vice president for government relations. He promised a “finished, first-class look.”
On Wednesday, workers from Milwaukee-based Four Brothers Construction were laboring to replace vacant storefronts in the mall’s west end. They will work their way from the west end to the east end.
Last year, HPG executives had hoped to begin renovations in September. But first the City of Racine created a tax-increment district that encompasses the mall and some of the surrounding retail zone, to help with the area’s rehabilitation. Next, HPG had to work out a development agreement with the city. Then bids for the work came in too high, and the project had to be rebid.
By then the holiday shopping season had begun, and Hull had to wait until after Jan. 1 to start renovations.
“Obviously, we want to start renovations and get to our (revitalization) model as soon as possible,” Mulherin said this week. “… We’re excited that we’re able to get it going.”
American Eagle closing
The interior mall renovations start in the wake of a rash of recent store and kiosk closings at Regency — all but one by HPG’s choosing. The exception is American Eagle Outfitters, a national chain store that will close its Racine location Monday. A clerk at the store said the closing was a corporate decision; the company did not respond to a request for comment or explanation.
Mulherin said Hull “absolutely” would have kept American Eagle in the fold if it could have. “Sustainable success will be with national, branded stores,” he said.
All the other recent or upcoming closings at Regency have been decisions by the mall’s owners and part of Hull’s mall revitalization strategy: Ancient Horizons, a jewelry and gift store; Body 360, a piercing shop; On the Go, a convenience store; New Image, a hair salon; a vitamin B-12 shots store; Jewel Time; and a Metro PCS kiosk.
And A1 Accessories is moving from a kiosk to a mall storefront.
“In any of our malls, we believe in the orchestration of a certain look and feel,” Mulherin explained. Important to that look are long lines of sight, because Hull believes that makes female shoppers feel safer.
“So, we need to eliminate all visual blockers,” Mulherin said. Consequently, the company systematically removes all kiosks as their leases expire. “Wherever conceivable, we want to move them into an in-line store,” he said.
“Other tenants,” Mulherin continued, “through no fault of their own … just don’t comport with what we’re trying to accomplish: a fashion-based mall.”
Other considerations involved in removing certain mall tenants include sales per square foot and how they are merchandised, Mulherin said.
“Unfortunately, there are some stores that don’t meet those criteria of a good, first-class look,” he said.
Despite American Eagle Outfitters’ imminent departure, Mulherin said there will come a time when HPG will try to bring the store back to Regency.
“If we had been able to do this (renovation work) a year ago, I would like to think we would have been able to save American Eagle and some others,” Mulherin said. “They didn’t have a lot of lease time left.”
Next renovation steps
In addition to replacing vacant storefronts with new walls, the next steps in the interior renovations will be installing new ceilings, Mulherin said. From those they will drop in pendant lighting that will reflect off the ceiling and back down to create a consistent lighting.
HPG will also put in carpet. “It gives you that warmth that you’re looking for,” Mulherin said. The company uses carpet squares that can easily be replaced after spills and such.
HPG will also redo all of the bathrooms. Mulherin estimated the interior makeover will take about 10 to 12 weeks, with much of the work being performed at night.
That will be followed in spring by the start of about 12 weeks of exterior construction including dramatically redesigning the entrances. “We beef them up, give them some verticality, some prominence,” Mulherin said. Pavers may be added outside the doors to “make it very welcoming.”
“The whole point is to orchestrate a new look and feel that gives momentum,” Mulherin said.
“That’s the expensive but easy part,” he said about the coming physical transformation.
“The tough part is finding the new tenants.”
But Mulherin said with Foxconn Technology Group planning to build a new, $10 billion manufacturing campus in Mount Pleasant, HPG thinks that bodes well for the mall here.
“Will we dominate again like (Regency) did in ’82?” Mulherin asked rhetorically. “Absolutely not. But we think we can be competitive. We can be viable, we can be relevant again.”