TRANSCRIPT:
This transcript has been edited for length and clarity.
Luis Hernandez: Joining me now is Katie Castellani, reporter with the Providence Business News. Katie, it’s such a pleasure. Thanks so much.
Katie Castellani: Yeah, thanks for having me.
Hernandez: There’s conflicting information about the future of the Macy’s location at the Providence Place Mall. Some reports indicate this could be one of the 150 Macy’s stores that are expected to close nationwide, but the company says something different. When are we going to know for sure the future of Macy’s?
Castellani: I think that’s the question on a lot of people’s minds and it’s not totally clear. Last I heard, Macy’s said they have not made a decision about the future of Macy’s in Providence Place, though there are reports that the Macy’s store at Providence Place will stay open through at least the end of this year and they plan to close 50 stores early next year, late this year, with the rest of the 150 to be closed by 2026. So it’s still very much up in the air.
Hernandez: This is the anchor store of the mall. Just remind us real quickly, how important is the anchor store to a mall?
Castellani: Oh, it’s crucial. I mean, Macy’s takes up, I think it’s around 200,000 square feet of the 1.2 million square feet of the mall. So it’s a significant piece of the mall and it’s three stories. It’s a massive department store. I think it has a massive impact on the mall.
Hernandez: I mean, we’ve been seeing closings of retail locations across the country for a while now, and Providence Place Mall lost other big stores like Nordstrom’s, JCPenney. Is this a bad sign for the mall’s long term viability as a retail destination?
Castellani: That’s a good question. I think that really depends on how well the mall can evolve. I think that’s kind of been a topic. A lot of reporting around malls in general has been about how are they going to evolve, especially since the pandemic as people have shifted away from in store retail to buying things online. So malls have really had to get creative with what they want to do. And I think Brookfield, the owners of the mall, seem to be open to that. In previous years, they’ve said that they want to add residential units. They want to kind of turn it into a lifestyle hub. That’s something that a lot of models seem to be leaning towards. So I think Macy’s closing will – if it closes at the Providence Mall – will put it to a test for how well it can evolve in this changing retail landscape.
Hernandez: Do we know of any specific plans they have of doing some of these things you’re talking about, whether it’s residential or medical facilities or just going in a different direction than being a mall?
Castellani: Yeah. So they have their tax treaty that’s set to end in 2028. A few years ago, I know the owners were looking for a 20-year extension. As part of their application process, they pitched some very preliminary plans about putting residential units, even making some ground floor retail space into a lifestyle center. They’re going to have financial services, a spa, fitness places, but that was 2022. It’s 2024 and there really haven’t been much talks about it. You know, it’s really not clear where those plans stand right now.
Hernandez: You mentioned the pandemic. Do we know, is that really what’s been hurting the mall’s finances the most?
Castellani: The pandemic kind of spurred the mall into this financial downfall. It was closed for several months. In the years after it, the mall owners were saying they were struggling to get foot traffic back in. I think it was in early 2020, they were still two-thirds of the traffic that they had in 2019. So I think the pandemic definitely had a massive impact on the mall’s performance now.
Hernandez: Katie, you alluded to a moment ago, how the mall signed a 30-year tax treaty with the city and this reduces its tax bill to about a million a year. That’s set to expire, I think, in 2028. If it’s not renewed, then the mall has to pay millions and millions in taxes annually. Is the city and mayor Brett Smiley open to renewing this deal?
Castellani: You know, that’s not a question that I’ve asked the mayor’s office myself. I think the last time I’ve seen this reported was back when mayor Elorza was in office. It was as the city council and him were kind of approaching their end of terms. It seemed like something that they weren’t super urgent about. I mean, if they don’t extend it, like you said, their tax bill will skyrocket. I think it’ll go up to $25 million a year from $1 million. So that will for sure hurt the mall, so I think extending it is crucial to the mall’s performance long term.
Hernandez: Look, we’ve seen malls close all over the country and it becomes an eyesore because you have this huge, massive structure that could sit there empty. This is in a very important part of town in Providence. Can Providence afford to see a mall close?
Castellani: City officials have acknowledged that losing the Providence place mall would be devastating to the city. I think when it first came, commercial real estate developers and basically everybody in the city said it transformed downtown. I think losing what’s become an institution of retail in downtown would be devastating.
Hernandez: Has anybody talked about replacing Macy’s? If it left, is there another company that you could actually bring in to replace that kind of space?
Castellani: I haven’t heard any talk about replacing Macy’s, but I think if you want to replace it with another retail store, finding another one of the caliber of Macy’s just for sheer volume – it’s a massive chain – I think that would be very difficult. I think if they wanted to replace it, it would likely be something with more of a lifestyle, entertainment route, like Level 99 replaced one of the major spaces in the mall. So I think that might be a way that the mall is leaning towards, away from retail and more towards entertainment and lifestyle spaces.
Hernandez: Can I just push you a little bit on that and ask, when you say lifestyle and entertainment, what are we talking about there?
Castellani: Yeah, so anything that’s not necessarily retail. You’re not actually going to go in there to buy a pair of socks. It’s to give people an experience that they can’t get at home. People can buy things from Macy’s from their phone. You can’t go to an arcade in your house. You can’t win a teddy bear in one of those claw machines from your house. So things like that, where it’s like really encouraging people to get off their couch and go to the mall for something that they can’t find elsewhere. I think that seems like the direction that malls in general tend to be leaning. That’s kind of what I mean by lifestyle.
Hernandez: I’ve been speaking with Katie Castellani, reporter for the Providence Business News. Katie, thanks so much for the insight. I appreciate the time.
Castellani: Thanks for having me.
