The Tulsa Promenade mall where Stacey Dirks works today is not the bustling retail hub it was when she started her first job there at the age of 16.

“It was busy all the time. It was vibrant,” said Dirks, who is the store market manager at LensCrafters. “I spent a lot of years and time in what I would consider the heydays of the mall where it was constantly busy, lots of families. You’d see traffic seven days a week.”

She worked at several stores that were staples at the mall for years including Paradise Bakery, American Eagle, VoiceStream and RadioShack.

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By her count, about 40 percent of the mall spaces are now occupied. Her store is located next to J.C. Penney and a perfume shop. The rest of the area is void of retail, with long swaths of empty space.

The glass elevator hasn’t worked in months, and the escalator on that side of the mall is blocked off.

Promenade Mall is facing a challenge, and it’s similar to what malls around the country are facing. The rise of online shopping has forced retailers to reduce the number of their brick-and-mortar stores in some malls. Promenade has been losing them, which raises questions.

“I get asked every day if the mall is closing,” Dirks said. “We feel disheartened and frustrated. So many shoppers are hopeful this mall will turn around, that’s what I hear the most.”

Downsizing

Since the first of the year, several national retail brands have left Promenade. The list includes Victoria’s Secret, American Eagle Outfitters, Charlotte Russe, Lids and Kay and Zales jewelry stores.

Hollywood Theaters Palace 12, which was owned by Regal Cinemas, also closed this year.

The mall’s general manager, Victoria Butts, told the Tulsa World previously that a new management company has taken over the theater and it was to open March 15; and several of the vacancies left by national retailers already had tenants set to replace them. But in most cases that has not happened, and the theater remains closed.

Instead, several empty storefronts have signs promising new stores coming soon, but no indication as to what stores or when they will open. Butts did not respond to multiple requests for an interview.

Officials with the city of Tulsa pointed out that the mall’s ownership is working to fill the vacancies.

A report from the city released this year looking at various retail corridors throughout the area paints a picture as to why the mall is struggling. The report also offers some ideas on how the space could best be used in the future.

Changing habits

The city’s Retail Market Study and Strategy notes that while the mall has several factors that would be considered ideal by most retailers, such as middle to upper-middle income neighborhoods and several other commercial centers nearby, the changing habits of shoppers are affecting mall traffic and its ability to fill vacancies.

Changes in the retail industry, led by increasing online sales, have led to many retailers no longer finding profitability in operating multiple storefronts in a single market, particularly in second-tier markets the size of Tulsa.

Several stores, ranging from large anchors like Macy’s to smaller national brands like American Eagle, have closed their Promenade stores while keeping their Woodland Hills locations open.

Because of the proximity of the two malls, as more retailers scale down to one location, there will be more vacancies at Promenade and it will have an even harder time filling vacancies, the report states.

“Tulsa is experiencing the same retail trends that are happening nationally and globally. As consumers shift online, the demand for retail on every corner isn’t necessary,” said Kian Kamas, chief economic director for the city of Tulsa. “Given the changes in retail patterns and the shift from in-store to online shopping, it’s more difficult to support … two malls.”

Ben Ganzkow, senior associate with CBRE, said that soft goods, such as fashion, are among the hardest hit by the emergence of e-commerce and that those stores are typically the ones found in shopping malls. He added that this is not a problem unique to Tulsa.

“Most markets will have a mall that is real strong and perhaps one that is struggling. Crossroads in Oklahoma City has been in decline,” he said.

Part of that is caused by residential growth trends, as was the case with Eastland Mall. As the residential base moved away, the mall closed and was transformed into Eastgate Metroplex, a mixed-use professional and retail complex.

“I think most markets will have seen some deterioration with one or two mall properties,” he said. “In Tulsa, Woodland Hills has always been No. 1. Tulsa Hills, as a power center, has emerged as a strong retail corridor. Utica Square has always done well. Promenade continues to decline.”

Looking ahead

As the report points out, Tulsa Hills and the 71st Street and U.S. 169 corridor — including Woodland Hills Mall — are the city’s retail and sales tax powerhouses.

It also notes, however, that the Promenade area has been a strong performer in the city’s retail environment and continues to be an important contributor to retail sales and sales tax collections.

“It is, however, experiencing the loss of anchors and lingering vacancies that are a sign that it is becoming obsolete in an evolving market,” according to the report.

The report recommends that the city work with mall property owners to get ahead of any further decline and prepare a strategy that transitions the mall and surrounding properties into an area that, while still heavily commercial, incorporates more mixed-use opportunities for housing and office space. Kamas said that when the city looks at how to develop new retail areas, the focus is on dense, walkable areas, which the Promenade area would lend itself to.

“Tulsans want the same things with their shopping experiences that we are seeing nationally: destinations and walkability with a mix of different types of offerings,” Kamas said. “We want to make sure we are ensuring commercially vibrant destination districts with vibrant retail opportunities.”

Ganzkow said that a redevelopment of the Promenade property in a way that integrated multiple uses would be a good path to follow.

“As rents decline and there is more deterioration in the mall, that owner has to at some point do analysis as to how long they will sustain lower rents and lost revenue from leaving tenants,” he said. “At some point there is a breaking point. You have to de-mall and integrate other uses.”

While any potential redevelopment would take years and a lot of cooperation between a number different property owners and entities, the report states that “the all-to-common alternative is a prolonged decay until the property is shuttered, sometimes years before it is redeveloped.”

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Mike Averill

918-581-8489

mike.averill@tulsaworld.com

Twitter: @Mike_Averill