Stealing Business – Kimco’s Unimaginative Redevelopment Plan For Its Owings Mills Mall Property

As you know, if you’ve been following Baltimore Rising, we’re doing our best to encourage all-inclusive economic development that will, sooner rather than later, dramatically reduce unemployment and poverty in the City of Baltimore. That’s still our objective, but we all know that the fortunes of great cities like Baltimore are not independent of their surrounding, suburban economies. Like it or not, no major city or county stands alone. We’re all in this mess together.

So this post, the first of several on the subject, has to do with a major Baltimore County project, the redevelopment of the Owings Mills Mall property now wholly owned by Kimco, the nation’s largest, publicly-held developer of strip centers, large and small. Why pick on Kimco? Because Kimco’s plan for the mall property is such a glaring example of selfish, unimaginative development that only succeeds at the expense of other business and employment in the market it serves. Those are strong words, but they are nonetheless accurate and appropriate.

No question about it, retail operations have a lifetime. If you don’t stay current with inventory and services that your customers want in rapidly changing times, you’re going to be replaced by the new, by the shiny, by the coming thing. Nothing wrong there. It’s just the nature of competitive behavior, one of the means by which a free market refreshes itself and evolves. It’s market behavior that government should leave well enough alone.

The problem is that, sometimes, a larger developer will have a property of such strategic prominence that its development can pull sales and major retail stores away from competitive locations – and do it without regard to the negative impact in the affected communities. Kimco’s Owings Mills Mall is just such a property.

The current plan.

Kimco calls its plan the “Owings Mills Town Center,” but it’s not. Not a “town center,” that is. Not a “Main Street” development. Not even close. Not if those words have any real meaning in the world of retail real estate development. It’s a big box store strip center, plain and simple.

To quote from the company’s June 17, 2016 website description of its plans for the Owings Mills Mall property…

“This 1980’s-era shopping mall has experienced a combination of decreased traffic and decreased occupancy over the past several years. Kimco is planning on developing Owings Mills Mall, transforming the indoor mall into a modern lifestyle complex.”

So far, so good, but then Kimco adds…

“The 1 million square-foot mall will be completely demolished and replaced with individual exterior-facing shops, several big box stores and a lifestyle component.”

Notice that in just two consecutive sentences, Kimco has gone from promising a “lifestyle complex” to a center having a “lifestyle component” – whatever that means. In any case, Kimco is planning a strip center anchored by “several big box stores” – all of which are already in place or have competitive brands nearby.

According to Kimco’s website, KimcoRealty.com, its plan is to tear down the original mall building and replace it with a collection of big box stores already in the area. Which big box and other stores? They haven’t said yet. The point is, Kimco isn’t creating any net new business or jobs. It’s just redefining the commercial topography of the region in its favor. And esthetically? Well, they may call it a “Town Center,” but there’s nothing small town or Main St. about it. There’s certainly nothing interesting about their plan to write home to Mom about.

Take a look at the site plan below that’s from the Kimco website. (Click on the image to make it larger.) What you see is basically 2 rows of big box stores separated by a large parking lot. Lots of parking. There are 17 retail spaces, some of which are very small – as little as 1500 square feet. Seven spaces dominate the center, each with over 40,000 SF. The two largest are 72,007 SF and 78,207 SF. Those are large stores. Even worse, we’ve been hearing that Kimco is pursuing major anchors – Lowe’s, for example – whose requirements are well more than 100,000 SF.

Kimco Site Plan Screen Shot 2016-07-19

Whatever the final selection of stores, the reality here is that there will be nothing that distinguishes Kimco Owings Mills property from every other big box store strip center in the metropolitan area. It’s not esthetically, socially or culturally interesting. And it does nothing to develop the Baltimore County or regional economies. No net new business or jobs. Nothing to encourage further development.

So why do it? Why build the ordinary when the extraordinary would not only be more beneficial to the County and region, but also more profitable? Because strip centers are what Kimco does. For Kimco, it’s an easy, low risk solution. Steal as many big box stores as you can from the market you serve. Do the easy, however boring, and collect your checks from your tenants.

No, Kimco isn’t developing anything. It’s just stealing business from other places in the County. Why? Because it can. Because it controls the property du jour.

Is it the responsibility of a developer, Kimco in this case, to do what’s best for the greater economy? To take into account the potential negative effects of its development on commerce and employment elsewhere in its market? No it’s not. It is, however, the responsibility of local government to recognize the super-competitive power of large developers and special properties like Owings Mills Mall and encourage developers to do the right, but nonetheless profitable thing.

Kimco has every right to do what it can to maximize the return to its investment. The problem is that, even though the property is large and very high profile – nothing about the County’s approval process requires an economic impact study. Only a legitimate, third-party economic impact study will enable County officials to fully appreciate the negative effects on commerce and employment in the places from which Kimco’s big box strip center will be pulling stores and customers. The good news is that this is a problem that can easily be fixed. More on that in a moment.

We keep saying that the Kimco is going to “steal business,” is going to succeed, but only at the expense of other established retail activity in the County. Why do we say that? Well for one thing, the market is already developed, already full-up. It doesn’t need another Bed, Bath & Beyond, another Lowe’s or Marshall’s. And for another, Kimco management has basically made the point for us.

On September 18, 2012, Sun reporter Alison Knezevich posted an article at BaltimoreSun.com entitled “Pikesville Realty Company Wants To Buy Owings Mills Mall.” Here’s the fourth paragraph from that post…

%22Market Couldn't Support...%22 Screen Shot 2016-07-14

Note, in particular, the last sentence: “…saying the market couldn’t support so much retail.” Sure, Kimco was trying to discourage approval of Foundry Row, but its point is well-taken. Commerce in the market is already very substantial. Baltimore County isn’t some one-horse town with explosive population growth craving something more than a general store.

Everybody in the County who wants to buy something is already buying it somewhere. Kimco had every right to be concerned that its investment in the Mall property could turn out to be a giant waste of money. So what’s changed since then? Nothing except that Kimco has realized that support for additional retail isn’t a problem when all it has to do is steal business from the surrounding market. …Thank you, Kimco. We rest our case.

If not a big box strip center, then what?

Actually, if Kimco would just think about it – with the help of County government and input from the community – there are all manner of interesting development options.

Instead of a big box strip “Town Center” in name only, Kimco could build a real one, a Main Street center with an interesting core of small, locally-owned shops and cafes, surrounded by rental apartments and condos.

Alternatively, it could go big and build the equivalent of Washington’s Verizon Center for concerts, sports and other special events. That facility would be unique in the area and would become a major draw, bringing net new business and employment to the county – and city – while encouraging additional development.

Or it could use the entire site for some tech-company’s east coast corporate headquarters, directly and indirectly employing thousands of professionals and other workers.

Needless to say, there are many other options, the least interesting and helpful of which is an ordinary strip center comprised of stores already in place nearby.

So what can we do about it?

Politically, take a look at the Council District map below. It’s a PDF, so you’ll need to click on the link.

District 4 With Google Maps Overlay

The address of the mall property is 10300 Mill Run Circle, Owings Mills, MD 21117. That’s just inside District 4 which is represented on the County Council by Julian Jones. See all the I-795 exits spaghetti in Precinct 04-001? Owings Mills Mall is right there, just to the left and below I-795 where the Google Maps teardrop is pointing, not far from the border with Vicki Almond’s District 2 in which commerce and employment will also be affected. We’re assuming a minimum market impact area radiating out 10 miles from the mall property.

The solution is simple. Let’s not try to tell Kimco what to do with its property. The company knows what it’s doing – and no one expects Kimco to do less than maximize the return to its investment. Let’s just start by asking Councilman Jones and Councilwoman Almond to sponsor legislation that requires any major County project over, let’s say, $50 million, to commission an independent economic impact study. At a minimum, that study needs to prove that the net impact of development is positive and significantly so. That study should include a list of the specific companies and/or other entities that will be a part of the project should it be approved. Ideally, it should point out exactly what existing commerce will be affected – in a positive or negative way.

And then, in a resolution, the Council, with the support of many community organizations, should encourage Kimco to submit a more creative, community-minded, but no less profitable development plan.

Responsible, large scale development can’t just be about moving commerce from one place to another inside a market area. Large scale development needs to be fresh and creative, improving the quality of commerce and life throughout the greater community it serves.

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