Waiting for Costco? Plans for North DeKalb Mall remain murky

Posted by Dan Whisenhunt February 21, 2017

The vacant Macy’s store at North Dekalb Mall. Photo by Dan Whisenhunt

This story has been updated. 

North DeKalb Mall waits at the corner of North Druid Hills Road and Lawrenceville Highway for a spark, a sign of life, anything.

It’s a patchwork of shops on short-term leases and empty spaces. The AMC movie theater is a big draw, offering bargain ticket prices compared with other theaters. Leapin’ Lizards, a gigantic space filled with bouncy castles, is another local favorite. Challenges, a nerd emporium next door, draws its fair share of visitors looking for a superhero t-shirt or to play a card game.

The biggest challenge for North DeKalb Mall is figuring out what its owner, Sterling Organization, wants to do with the space. The company has declined repeated requests for comment about its plans.

Decaturish spoke with several tenants who said they were told that the company had plans to start renovation work this year, but they were recently notified that those plans were pushed back to 2018.

The reason for the delay isn’t clear, but tenants have surmised it has to do with Sterling’s negotiations with Costco, a potential retailer that’s been attached to the mall’s revitalization for years.

“The bits and pieces I’m hearing is they still want to bring in Costco and Costco has been negotiating the heck out of the whole deal and I think they pulled out of that deal,” Leapin’ Lizards co-owner Benjill Cubas said. “That’s what was lagging. They’ve got to move forward. If Costco comes in they’ll take one direction. If they don’t, they’ll go another direction.”

Tony Cade, owner of Challenges, said his information is scarcely better than rumor. But he’s an engaged tenant and based on what he’s learned, Stering wants to pursue a mixed-use project like Atlantic Station in Atlanta’s West Midtown neighborhood.

“It’s still up in the air whether or not Costco will or will not be involved in the new structures,” he said.

Costco has declined repeated requests for comment. A records request sent to DeKalb County for any permit or zoning applications related to the mall turned up nothing.

Even the slightest flicker of activity at the mall – a resident of the Medlock Park neighborhood recently noticed the lights on in the Macy’s store, which closed in 2016 – is enough to generate buzz among residents living nearby.

When Sterling bought the mall in 2014, it said its plans were to transform the 622,297-square-foot space into an open-air mall concept. For years, Costco has been a rumored tenant, and the company was inching closer to a deal to open in the mall around 2008, shortly before the economy imploded.

Theresa Same, zoning chair for the Medlock Area Neighborhood Association, was involved in the retailer’s discussions with the neighborhood.

“We helped them rezone the piece of property going towards on North Druid Hills side, an L-shaped piece of property … they built that Zaxby’s on the front piece of that,” she said.  “We helped rezone that to commercial so they could build the gas station there for the Costco, then Costco pulled out. The economy tanked and they basically did a freeze on new stores.”

According to property records, Sterling paid $15.5 million for most of the mall in 2014 and paid an additional $10 million for the Macy’s space in 2015. The closure of Macy’s has renewed interest in the space because the retailer was an obstacle to Costco opening a store there, Same said.

Macy’s would not give Costco access to its unused parking spaces. Because Macy’s owned its building, the previous owner of the mall couldn’t compel the store to do anything.

“When they were here the first time around, a big issue with redeveloping the mall at all was that Macy’s owned their building,” Same said. “They owned rights to a lot of the parking  … they weren’t willing to relocate to a different place in the mall. They had to work around all of that. Obviously with Macy’s out of the picture, that opens up a lot more flexibility.”

Jason Carlton, owner of Play it Again Sports at the mall, said he doesn’t think the current Macy’s space is suitable for another business.

“The Macy’s Building is not up to code,” he said. “They’re going to have to tear that thing down. Their plans haven’t worked out the way they thought.”

The mall was constructed in 1965. In a previous life, Macy’s was a Rich’s department store.

Carlton said the closure of Macy’s has hurt his business, which has been there for 20 years with four different landlords. Carlton said when he was notified about Sterling’s plans for 2017, he began looking for another space. He said he was recently approached about extending his lease at the mall.

“They told us we need to move out and move on,” he said. “That’s what we’re doing.”

There’s scarcely a week that goes by where Decaturish doesn’t receive an inquiry about North DeKalb Mall. Readers want to know what’s going on there, what the plan is. Even people who would normally be in the know don’t have a clue. DeKalb County Commissioner Kathie Gannon, whose district includes the mall, said she’s been meaning to set up a meeting with the owners. She noted that shopping malls around the country are trying to figure out a way forward now that online shopping has cut into their business.

“They’re having a hard time trying to figure out what is the successful mix now given the online shopping. Brick and mortar is hard. It has to be more than just stores,” Gannon said.

Same, with the Medlock neighborhood, also theorized that whatever Sterling has planned, it would likely be within the current zoning.

“Every time we’ve contacted them, they’ve had no information to share,” she said. “The way it goes is, if they don’t need the community, if they’ve got the zoning they need, they’re going to keep it as quiet as they can for as long as they can, for lots and lots of reasons.”

Cade, the owner of Challenges, said the development of other retail centers – like Suburban Plaza – may be holding up Sterling’s plans.

“Just talking off the top of my head, there’s a lot of properties in Decatur that have already started their redevelopment, and if you’re going to come in and do something like this, you’ve got to have retailers lined up with long-term leases because it’s going to cost you money to build these brand-new structures,” Cade said. “To me, if I was business owner and wasn’t super wealthy, I’d want to make sure I had new retailers lined up. It does sound like the wise thing to do.”

Tom Holmes, whose family owns the property that contains several fast food restaurants along Druid Hills Road and Shamrock Plaza across the street, said he’d welcome any news about new development at the mall.

“It would be a great thing for the whole area if the mall were redeveloped,” he said.

About Dan Whisenhunt

Dan Whisenhunt is editor and publisher of Decaturish.com. https://www.linkedin.com/in/danwhisenhunt

View all posts by Dan Whisenhunt

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