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Gallo Assesses Plans for Westdale Revival

Post-flood downtown projects have sparked a lot of debate, especially among those who believe the city should be more focused on other parts of the city.

And it’s not uncommon for those critics to cite the plight of Westdale Mall, the once thriving, now half-empty, enclosed shopping center in the heart of the west side’s growing commercial area.

Now, it appears possible, perhaps probable, that one of the most controversial downtown city projects—the construction of a new Convention Complex and purchase of its adjacent hotel—may lead directly to the redevelopment of Westdale after years of frustrating false starts.

John Frew, whose Frew Nations Group is managing the convention center project, is leading another group of investors, Willow Creek Ventures LLC, seeking to buy Westdale from its owners. Frew’s familiarity with the city and the fact that he has 16 employees here who could move from downtown work to the mall project were major factors in his decision to explore investing in the mall’s future.

“If this were anywhere else, other than Denver, we wouldn’t be looking at it,” Frew said from his office in Denver. “We like Cedar Rapids. We respect the culture and the quality of people. We’ve really come to appreciate what the community is all about.”

Not a done deal

But he cautions that it’s not a done deal.

“We don’t own the mall yet, and most important, we have not made the decision to buy the mall. We’re still in due diligence. We still have to make the decision to close. And we’ve got a lot of unanswered questions that we’re working through. We’ve got a lot of work,” Frew said.

The soonest Willow Creek would close on the deal is mid-August, he said. After that comes nine months of planning.

But with the most serious redevelopment bid in years on the table, it’s exciting to consider the positive possibilities, and how a revived Westdale could provide a major boost to the west side, and the entire city.

Frew said investors are considering a half-dozen potential plans for Westdale, all of which would drastically change its landscape and configuration.

Parts of the mall, most likely its two anchor stores, Younkers and J.C. Penney’s, would remain. But large sections would likely be demolished.

Instead of a mall set in the middle of an asphalt sea, ringed by a beltway road, Frew envisions central green space, reconfigured roads and parking, and new sites for retail and restaurant development.

Right formula

And when it comes to breathing life into a declining mall, that’s the right formula, according to John Gallo, a member of the finance faculty at the University of Iowa. His students studied Westdale and prospects for its revival.

“The ones that have come back have gone through either total demolition or substantial,” Gallo said. “In terms of capital, this is going to be very costly. So I can understand why (Willow Creek) would want to salvage as much of the infrastructure as possible.”

But based on his class’ research, the project has a good chance to succeed.

“We did retail trade analysis and got into the demographics. And the growth area in Cedar Rapids is in the retail trade area Westdale is in. And all signs are positive,” Gallo said. “If you compare the Lindale and Westdale RTAs, the Westdale one looks like it has more potential. We were really quite surprised by that.

“The audience is there. The clientele is there. We think it could be a big draw,” Gallo said.

Frew’s team is conducting its own, far deeper analysis of the project’s potential. And they’ve already reached some conclusions.

Although some malls have been reborn as “mixed use” developments with retail, residential and office space, Frew said the availability of cheaper nearby land makes residential development on the Westdale site less likely. He also says there’s little reason to believe Cedar Rapids needs more office space.

So instead of mixed use, Frew prefers “multiuse”—likely with retailers, restaurants and other services. New big box retail tenants are possible, perhaps a grocery store.

“We want to break that concrete up substantially,” Frew said. “We want more green space. This isn’t just a pass-through go from A to B. This will be a site with multiple destinations. And the parking will be dispersed.

“This isn’t just bricks and mortar. It’s at the heart of the west side, which we think has a great future. You really have to maintain some level of a wow factor, something that people want to be a part of. If we can’t factor that in, we won’t do it,” Frew said.

Colorado version

To illustrate his group’s vision, Frew points to The Streets at Southglenn, a 3-year-old mixed retail development in Centennial, Colo., a suburb of Denver. Willow Creek hopes to hire the same architects that designed it.

Southglenn and Westdale have some things in common. Southglenn was a large, enclosed shopping center built in the 1970s. And, like Westdale, Southglenn hit hard times when a brand new mall opened nearby. Westdale lost business after Coral Ridge Mall opened in Coralville.

Corri Spiegel, Centennial’s city economic development manager, said developers demolished all but Southglenn’s two anchor stores, Macy’s and Sears. Green space replaced the middle of the old mall, its beltway road became a grid of new streets, and space for retail, restaurants, a movie theater, a Whole Foods store, offices and apartments sprang up in between. A new retail development with Dick’s sporting goods, Staples, Macy’s Home Store, and Best Buy was also built on the property.

Spiegel said there were doubts about the project, especially because its construction came in the midst of an economic downturn. Some expected tenants, particularly clothing retailers, backed out of the project. But, she said, so far the development has been a major success.

“Change is scary. But for us, it has been a beautiful community gathering place,” Spiegel said. Centennial has no central downtown. “For us, it was the first time we could actually go to a farmers market.”

Public support factor

Even in a fast-growing, affluent suburb like Centennial, public investment was needed to make the project work. The city created an “urban renewal authority” much like Iowa’s tax increment financing, or TIF, districts. In Centennial, the authority used 76 cents of every dollar in additional taxes generated by the development to pay off the bonds issued to finance site improvements. The other 24 cents goes to the city.

Spiegel said Centennial saw the development as its best option.

“When these malls were in their heyday, they produced just a tremendous amount of revenue. And even the rebuilt beautiful thing is probably not going to produce what the mall did in its day,” Spiegel said. “And that has nothing to do with the development or the location or anything. It’s just how consumers are changing. We have Amazon now.

“But it’s better than a declining property that’s going to be blighted.”

Frew said that public investment also will be needed at Westdale to make the project work, most likely using TIF. “This does not work without city participation. It just doesn’t,” Frew said.

And as much as the city wants a Westdale renaissance, caution is still warranted. The city should partner with Willow Creek if developers put a solid plan on the table with strong financing and community support.

The good news is that Frew is not an unknown entity. His firm’s performance managing the ongoing convention center project should provide local leaders with a good yardstick to judge his prospects for success at Westdale.

“This is a very, very large undertaking. And I suspect that we will see this through,” Frew said.

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