Lloyd Center new owner: Give us two years
Tom Kilbane, Portland managing director of Urban Renaissance Group, the new owner-manager of Lloyd Center, told store owners they won't see major changes to the mall before two years.
Kilbane explained that the city of Portland's planning process takes that long to make big changes to buildings, but soon they will see increased security and a cleaner and better-maintained building. These third-party providers have been short on staff, but he is asking them to hire more people.
A few dozen store owners met with Kilbane and the mall's current marketing and general managers in an empty store on the morning of Wednesday, Dec. 22. He apologized to vendors who felt blindsided by the news that the previous owner, Cypress Equities of Dallas, Texas, had defaulted on their loan and that financiers, KKR Real Estate Finance Trust of New York City, were foreclosing on them and might sell the mall to a firm who would close it down. Kilbane explained that the news slipped out in October in an earnings call to Wall Street.
"Probably the thing you're most interested in is what's going to happen," Kilbane said. "And the short answer is: I don't want to say nothing's going to change, we hope things are going to get better. But there are no plans to close the mall, no plans to knock anything down. Our goal is to improve the operation of the mall, improve the tenant experience and improve customer experience."
He urged vendors to have faith in the Urban Renaissance Group and renew their leases. When asked what the company would do to bring back anchor tenants who have fled (Marshalls, Nordstrom, Macy's) he said they were advertising for smaller companies to lease space at the mall. He also had heard from "big box" stores who were interested but did not disclose any names.
"We're probably not able to sign five-year leases, just given the fact that we don't know yet what the future plan is going to be." he said.
He asked them to encourage fellow retailers to apply. Local pop-up shops have filled some gaps in Lloyd Center as chain stores have fled.
Keep calm and shop on
Any thoughts of radical change at the mall remain under wraps. "So will it stay the same forever?" Kilbane asked rhetorically. "Probably not. But we are going to begin a planning process. And if any of you had to go through the permitting process with the city of Portland, you know that it doesn't go very quickly."
He said that usually takes two years. The Urban Renaissance Group already partners with KKR on properties in Seattle; it manages eight properties in Portland, mostly offices and all of them with some retail component, and has 28 staff here.
"This has been a very big deal for us, it's almost 10% of our total portfolio," Kilbane said, adding that he lives two miles away and his teenage sons' photos with Santa Claus were all taken at Lloyd Center.
Sorry we're not closed
One vendor complained he had been fielding calls from customers who thought Lloyd Center already had closed for good. Kilbane said they wanted to run their ad announcing their intention to revitalize the mall before Thanksgiving, but could not until they became formal partners on Dec. 17. He apologized for the uncertainty it caused just before the holiday season.
Others in the room pleaded for three monthly meetings, to keep them up to date on management decisions.
Speakers became most animated about shoplifters and skateboarders, whom they say have made their jobs difficult. A manager at fast fashion shop Forever 21 said it was hard to hire 16-year-olds because they are afraid of having to deal with shoplifters and feared violence. She complained the store loses thousands of dollars per week in theft. The previous owners cut security guard hours by half, but the Urban Renaissance Group pledged to restore it back to previous levels, with more guards walking around in pairs.
Shop owners asked if there would be a change in the hands-off policy, in which security cannot touch shoplifters and can only escort them from the mall while allowing them to keep stolen merchandise. Kilbane said the problem was with Portland Police and their response times, which are considered non-existent for petty crime.
Skateboarders also were criticized for damaging the interior floors and for being "very disrespectful," although one woman said they were "still part of the community" and thought there should be a skate park.
The mall's operations manager said he already had a spot in mind for that.
The marketing director for the Lloyd Center said "Having local partnership makes such a big difference. You guys (the store owners) know this market is unique, and having owner-managers that understand that uniqueness is what is going to take Lloyd Center to the next level."
She added the mall will have a social media campaign in January and asked store owners for creative ways to partner on getting the word out. They have largely stopped doing radio and print ads to promote the mall, relying on earned media such as live spots on "Good Day Oregon." The mall also will have more "fun eventing" in the future, since that brings in shoppers.
Kilbane said in a statement last Sunday, as news emerged of the Urban Renaissance Group's new partnership, "Our ambition is to embrace and preserve features of the property that make it special, including retail, creative work spaces and ice skating."
Store owners were concerned their rent might go up, but he reassured them, saying he knew they could not absorb rent increases at the moment.
One worried store owner said it sounded like they were being asked to wait and see.
"You're not trying to get anchor stores back or trying to bring new restaurants in. It's not revitalizing Lloyd Center, it feels like it's a holding pattern while you guys decide what you're going to do with the space," she said.
Kilbane replied, "I wish I could be more definitive about what that transition is going to look like, but we just don't know. We have a lot of really interesting inquiries from people who we would consider big box stores."
They are still working on the long-term vision of the mall, which he set at 15 to 20 years.
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