TRANSCRIPT:
This transcript has been edited for length and clarity.
Luis Hernández: With me now is Katie Castellani, reporter with the Providence Business News. Katie, it’s a great pleasure. Thank you very much.
Katie Castellani: Yes, thank you for letting me be here.
Hernández: There is conflicting information about the future of the Macy’s location at Providence Place Mall. Some reports suggest this could be one of the 150 Macy’s stores slated to close nationwide, but the company says otherwise. When will we know for sure what’s next for Macy’s?
Castellani: I think that’s the question that a lot of people are asking, and it’s not very clear. The last I heard, Macy’s said they hadn’t made a decision on the future of Macy’s in Providence Place, although there are reports that the Macy’s store in Providence Place will remain open at least through the end of this year and they plan to close 50 stores early next year, late this year, with the remaining 150 to be closed by 2026. So it’s still very uncertain.
Hernández: This is the anchor store of the mall. Just remind us again how important the anchor store is to a mall.
Castellani: Oh, it’s critical. I mean, Macy’s takes up, I think, about 200,000 square feet of the mall’s 110,000 square feet. So it’s a significant part of the mall and it’s three stories. It’s a huge department store. I think it has a huge impact on the mall.
Hernández: I mean, we’ve been seeing store closings nationwide for some time now, and Providence Place Mall has lost other major stores like Nordstrom’s and JCPenney. Is that 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 always been a theme. A lot of the reporting on malls in general has been about how they’re going to evolve, especially since the pandemic, as people have moved from brick-and-mortar retail to online shopping. So malls have had to really get creative and figure out what they want to do. And I think Brookfield, the mall owners, seem to be open to that. In years past, they’ve said they want to add residential units. They want to turn it into a lifestyle hub, so to speak. That’s something that a lot of models are leaning toward. So I think the closure of Macy’s — if it closes at Providence Mall — will be a test for them of how well they can evolve in this changing retail landscape.
Hernández: Are we aware of any concrete plans to do some of the things you’re talking about, whether it’s residential or medical facilities or are you just looking to go in a different direction than just a shopping center?
Castellani: Yes. So they have their tax deal that expires in 2028. I know the owners were seeking a 20-year extension a couple of years ago. As part of their application process, they put forward some very preliminary plans that talked about creating residential units and even converting some ground floor retail space into a lifestyle center. They’re going to offer financial services, a spa and fitness facilities, but that was 2022. Now it’s 2024 and there hasn’t been much talk about it. You know, it’s really not clear what those plans are right now.
Hernández: You mentioned the pandemic. Do we know if it is actually the reason why the mall has suffered the most financially?
Castellani: The pandemic drove the mall into financial ruin. It was closed for several months. In the years since, the mall’s owners have said they’ve struggled to attract customers again. I think that was in early 2020, when there was still two-thirds of the customer traffic from 2019. So I think the pandemic definitely had a massive impact on the mall’s performance.
Hernández: Katie, you mentioned earlier that the mall has a 30-year tax contract with the city that reduces its tax bill to about a million a year. That expires in 2028, I believe. If it is not renewed, the mall will have to pay millions and millions in taxes annually. Are the city and Mayor Brett Smiley in agreement with extending that contract?
Castellani: You know, that’s not a question I’ve asked the mayor’s office itself. I think the last time I reported on this was when Mayor Elorza was in office. That was when the City Council’s term and his term were coming to an end. It seemed like something they didn’t have a lot of urgency about. I mean, if they don’t extend the deadline like you said, their tax bill is going to skyrocket. I think it’s going to go from $1 million to $25 million a year. So that’s going to hurt the mall for sure, so I think the extension is critical to the long-term performance of the mall.
Hernández: Look, we’ve seen malls close all over the country, and it’s an eyesore because you have these huge, massive buildings that could be vacant. And this is in a very important part of Providence. Can Providence afford to close a mall?
Castellani: City officials have acknowledged that the loss of Providence Place Mall would be devastating to the city. I think when it was built, commercial real estate developers and virtually everyone in the city said it was a game changer for downtown. I think the loss of a downtown retail institution would be devastating.
Hernández: Has anyone talked about replacing Macy’s? If that company goes away, is there another company you could actually hire to replace that type of space?
Castellani: I haven’t heard of Macy’s being replaced, but I think if you’re going to replace it with another retail store, it’s going to be very difficult to find another that’s on par with Macy’s in terms of volume alone – it’s a huge chain. I think if they’re going to replace it, it’s probably going to be something with a lifestyle and entertainment offering, like Level 99 replaced one of the main areas of the mall. So I think the mall could trend in that direction, away from retail and towards entertainment and lifestyle areas.
Hernández: May I press you a little and ask: What are we talking about when you talk about lifestyle and entertainment?
Castellani: Yeah, so anything that’s not necessarily retail. You don’t really go there to buy a pair of socks. It’s about giving people an experience that they can’t have at home. People can buy things from their phone at Macy’s. You can’t go to an arcade at home. You can’t win a teddy bear from home on one of those claw machines. So things like that where you’re really encouraging people to get up off their couch and go to the mall to buy something that they can’t find anywhere else. I think that seems to be the direction that malls in general are trending. That’s kind of what I mean by lifestyle.
Hernández: I spoke with Katie Castellani, reporter at Providence Business News. Katie, thank you for the insight. I appreciate the time.
Castellani: Thank you for letting me be here.
