What the Demise of the Mall Means to Georgetown’s Retail Landscape

The Georgetown Park mall has been a depressing place to visit for a long while now. And if it’s possible, it’s getting even more depressing as Vornado, the new operator of the mall, is summarily kicking out long standing tenants like the Hattery, seen above.

GM’s heard many rumors of what Vornado plans to do with the space once it kicks out every last one of the tenants. But none of the rumors have been substantiated. Both CAG and the Georgetown Park condominium association have reached out to Vornado and received no information.

Most of the rumors revolved around several large anchor stores. And it’s GM’s prediction that Vornado is much more interested in a building with a couple large tenants than a bunch of small ones. And the callous manner that they have been kicking out the tenants, giving them notice measured in weeks not months, would tend to support that prediction.

But if it is indeed the case that the mall will become just a couple big box stores shoehorned into a city, what does that mean for the retail landscape of the neighborhood?

GM can’t say for sure, but he can tell you what the numbers might look like. Every year GM takes a survey of every single store in the neighborhood. Last February he counted 530 stores (“store” for this purpose means retail,┬árestaurants, salons, etc. Pretty much everything commercial except office space.)

There are no fewer than 75 retail spaces in the mall (not counting stores with M St. entrances). Thus, the mall represents almost 15% of all retail store fronts in Georgetown.

As of last February, there were still 56 stores operating within the mall. Last year there were 44 stores to close in Georgetown, including 29 non-mall stores. Even if the number of non-mall stores that close reduces by half, the closure of all the remaining mall stores would mean 71 stores closing in a year, a 61% increase over 2010.

And most of the mall stores are independent shops. As of February 2010, there were 47 independent shops operating in the mall. There were 380 independent stores in all of Georgetown. So with Vornado gutting the mall, they’re taking out over 12% of Georgetown’s small independent businesses.

GM probably has taken the mall for granted. He doesn’t care for its faux-historicism. Who needs to walk around in a pretend Victorian village when there’s a real one just outside? What GM didn’t realize until now is how the hulking and aging mall fit into the Jane Jacob call to preserve old buildings. She advised this because old buildings with smaller retail spaces tend to be cheaper to rent and thus can house stores that can’t afford prime rents. This leads to more retail diversity.

While the mall is not terribly old, it has in recent years certainly satisfied the low rent part of the equation. Stores that could never afford M St. or Wisconsin Ave. rents can live in the mall. And that was a good thing. At least for us residents. It was less good for the mall owner.

And so Vornado will now sweep away a haven for Georgetown’s small independent shops. This is well within their rights, and as one shopkeeper once put it too GM, sometimes even free is too expensive. In other words, while the small shops could stay open in the mall, most of them were hardly thriving and the situation was not endlessly sustainable.

But there’s a difference between working within your rights and being a good neighbor. So far, Vornado has shown no interest in doing the later. GM predicts that all they want to do is gut the property, put in three or four large tenants (whoever they can sign, GM doubts they care much) and turn around and sell it. It would come as no surprise that they’re not interested in the long haul seeing as they’re simply acting as an agent for the mall’s actual owner: Angelo, Gordon & Co. This firm specializes in distressed properties, an investment strategy that normally involves buying a property cheap, tarting it up and turning around and selling it for quick buck.

GM’s only hope is that they don’t do too much damage, and that either Herb Miller or Anthony Lanier can come back and start over again once Vornado/Angelo Gordon takes their check and leaves town.

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16 Comments

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16 responses to “What the Demise of the Mall Means to Georgetown’s Retail Landscape

  1. RNM

    I think the key line in the story is that Vornado is operating perfectly within its rights. I assume these tenants had contracts they signed…and that those included clauses where they could be kicked out with proper notice. Last I checked Vornado paid a lot of money for the building…and now they are using it as they see fit by the letter of the law and contracts that were outstanding.

    I may not like the paint color that my neighbor chose for their house…but they bought the house and so they get to pick the color. If I was so concerned about preserving the color, I should have bought the house and then I could do what I want with it.

    So given that Vornado is well within its rights in doing what it is doing, where is the fire? I see a lot of smoke being created, but no fire. Sounds a lot more like someone running down the business because they have an agenda or sour grapes. Go ahead, call them names, say they are “bad neighbors” or such…free speech is there for that. I know Vornado’s agenda, make money….what is your agenda other than to control this community and its shopping options to reflect what you think we should have? Why do you have such a problem with how a business chooses to utilize their assets in a somewhat free market?

  2. Olive

    I’m glad that you pointed out that independent stores continue to operate in the mall. I hate the place and agree that it’s depressing. But, there are three (maybe four?) women-owned businesses in the mall that I love and frequent: Simply Soles, Fornash, and Dandelion Patch. The “maybe” fourth is the fantastic threading cart at the M &Wisc. entrance. At $10 for eyebrows, it’s the best deal in the city and one of the best kept secrets. I’ll be sad to see them go.

  3. Anonymous, please: "Nemo"

    Such a pathetic denoument for Georgetown Park — it was a stunning high-end shopping venue and destination when it first opened. So elegant and chic, with lovely, one-of-a-kind, stores. What can we look forward to now? Best Buy? Target? Sic transit gloria mundi!

  4. Walter

    For a profile of Steve Roth’s (head of Vornado) approach to property acquisition, see:

    http://www.bostonmagazine.com/articles/steve_roth_the_pit_boss_behind_the_filenes_crater/page4

    In Boston, Roth is under pressure to do something about the old Filene’s property because he is also a partner in a group hoping to get a casino license in Boston, and almost certainly there will be no license given to his group if:the Filene’s site remains a hole in the ground.

    There is precedent in Roth’s history of real estate acquisitions for Georgetown Park to be emptied and left vacant. Unlike Boston, DC has no leverage over Vornado to do something with the mall.

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  7. adam

    I’m actually very much looking forward to the new ownership and the potential for a newly renovated mall. The current space is simply unpleasant. Rents are low because customer traffic is insufficient to support real business activity. The prospect of a landlord seeking to make that mall a high-rent place is actually favorable news–it means they want to actively pursue tenants that will attract a lot of customers (like me), renovate the space to make it more attractive to drive foot traffic, and make it more of a resource and destination for shoppers. That seems much more valuable to me than the current system where the place is drab, few people choose to shop there, and merchants offer products and services that most local residents don’t value. The only reason I ever go there is for the DMV….

  8. J

    RNM you are correct: people are legally within their rights to go about a process like assholes, instead of being decent human beings.

  9. GMan

    I have heard that they are entertaining offer with some large discount retailers. It took many years for Georgetown to become the sought after shopping district that it is today. In the 80’s it was bars and small independents in the 90’s it was “Any Mall USA” and now it has a great mix of better quality often higher end tenants many of whom are destination oriented. TJ Maxx is a name I have heard kicked around as being a prospective tenant with several of their concepts under one roof. What GTown needs is more celebrity chef style restaurants not attack of the discounters that can be found in any suburb in the country.

  10. TeddyC

    Naw, it’s not a bad thing if a good number of the stores in Georgetown Park close. What you consider an “independent retailer,” most people would consider an odd specialty store that generally doesn’t appeal to them. Does the “As Seen on TV” store count as something whose demise we should bemoan? Or the weird leather goods/luggage stores? For better or worse (esp. given what you note about rental prices in other G’town locations), a mall is not a destination for small, niche stores. Instead, a mall attracts people due to broad appeal, and any niche stores that continue to exist aren’t the core raison d’etre for the mall. Those stores are better suited to side streets where, rather than hitting the stores as a destination, one passes them in the process of walking through the neighborhood. Now, we could also discuss whether that business model is working well for independent retailers, but the mall is not the place for them. If the mall doesn’t have a core set of mainstream stores to attract customers, it will wither and die. Which is essentially the state that Georgetown Park is in right now. So I say, kick ‘em out. Bring in the big name stores. Draw the consumers through the presence of those stores and then figure out what role the small stores will play. But don’t start with small, independent stores as the foundation of the mall. As we’ve seen over the last few years, that just won’t work.

  11. plan georgetown

    I always thought it was odd that you had to pay so much to park there and then there was nothing that interesting in the mall. They should have encouraged free parking or reduced parking. At one point in time if you bought something for $10 or more you could get two hours of free parking. When it opened it was a novelty but it soon wore off. The Pinball museum was interesting. The city should buy the mall or at least the parking lot and if need be use eminent domain to do so and have a free or reduced parking lot like the many lot’s in Bethesda. Enough with Colonial Parking and all the other greedy Parking Lot companies who give maximum campaign contributions to each City Council Member and the Mayor at every opportunity. If the city does buy Parking lot then they can eliminate some parking on Wisconsin and make the sidewalks wider. If we had a functioning Government and a functioning Office of Planning they would act on this or a similar idea. What about making every third Saturday car free Wisconsin and M Streets in Georgetown day. It is time to improve Georgetown. The owner can be part of the solution if he wants. The leverage is eminent domain.

  12. I just visited the mall. It was a spooky trip, everything is closing. We need something everyone can enjoy, something good for society.

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  14. LittleBird

    I agree that the mall is incredibly depressing these days, and one of its major draws was the DMV (that sadly closed this past May), but let’s stop for a second and think about Georgetown as a whole in terms of the type of shoppers that it typically caters to.

    Geographically speaking, it’s not very accessible for the average person to get to without a car, and even then the parking situation is either insanely priced or virtually non-existent. Sure, there’s the Circulator, but anyone that’s tried to take the one from Union Station or Chinatown will tell you that it’s still a lot of unnecessary legwork, especially if you live farther away and have to catch a train just to get to the Circulator stop in the first place.

    If you like buying high-end designer clothing or high quality imported food, there’s a fair number of stores for you to choose from such as Ralph Lauren, Zara, Rag & Bone and Dean & DeLuca. But if the cheapest places you can shop or eat in the area are H&M and Subway, you’re better off just heading to Pentagon City or one of the area’s other malls that will have a wider selection of vendors to choose from at multiple price points. The closest movie theater is hidden under the overpass and the Trader Joe’s is too far away to consider it a viable option for grocery shopping in the part of the neighborhood that sees the most foot traffic, whereas areas like Downtown Silver Spring have more or less perfected the art of appealing to your average commuter/consumer.

    If Georgetown merchants and restaurant owners want to continue to maintain their reputation as one of DC’s more exclusive neighborhoods, that is completely within their right. However, when your main shoppers consist primarily of visiting dignitaries and upper-middle to upper class people that have more than likely lived/worked/raised families in the area for years, there comes a point when you have to decide if your business can survive on the revenue generated by a smaller-than-average consumer base.

    I’m not saying that they need to put a Target into the Georgetown Mall to boost foot traffic, but I refuse to believe that there are zero viable mid-range companies willing to open up shop in that space. If I’m going to hoof it all the way from NW to Georgetown, at least give me something to do that won’t cost me an arm and a leg.

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