Originally created 07/05/99

Chattanooga mall recovered from brink of extinction



Until recently, Eastgate Mall -- like Regency Mall -- was dying.

After more than three decades, the Chattanooga, Tenn., shopping center was nearly empty. Suburban development had moved to other areas, and a newer, larger mall had replaced it as the place to shop.

But Chattanooga's elected officials and an aggressive real estate developer from Los Angeles decided they were going to save Eastgate Mall. And some Augusta leaders now are looking at the Tennessee shopping center as a model of how to revive Regency Mall.

What happened in Chattanooga was a combination of good luck and hard work.

The city commissioned a study and built a park. A real estate developer bought the mall, pledged to invest $20 million and aggressively sought tenants. In four years, the developer wants the mall to be 95 percent leased.

In February, a group of Augustans, including Mayor Bob Young and former Mayor Charles DeVaney, visited Eastgate Mall to see what's being done there.

Built in the mid-1960s, Eastgate Mall was in decline for years, said Rick R. Wood, development coordinator for Eastgate Enterprises LLC. Age and competition from nearby Hamilton Place Mall was killing it.

Just two years ago, about 80 percent of the shopping center was vacant. Its three department stores were gone. Its parking lot was deserted. And the area around it was declining, too. The mall had a reputation as an unsafe place.

What turned the situation around was a commitment by public and private organizations to invest in the mall and a vision that went beyond an 800,000-square-feet building and acres of asphalt.

In late 1997, Windward Development, a Los Angeles company, was looking for office space for an AT&T call center, Mr. Wood said.

AT&T wanted to locate in one of the mall department stores, if the mall's owners would upgrade the shopping center. They couldn't reach an agreement.

So Windward tried another approach. The company recognized that the mall was an interesting building. It was in a good location. And it was in a fast-growing city with a commitment to revitalization. The company offered to buy the shopping center.

A deal was reached.

Eastgate Enterprises, a subsidiary of Windward, was created. And AT&T, with its 800 employees, moved in.

"That really got it jump-started," Mr. Wood said.

At about the same time, the city hired a South Miami, Fla.-urban design firm -- Dover, Kohl & Partners -- to study the area and offer a plan. The study cost about $140,000, Mr. Wood said.

To design the plan, the firm invited the community to attend public workshops. The workshops put people in groups of eight to 10 and asked them to draw the area as they envisioned it for the future. Many of the groups came up with some of the same ideas independently. Those ideas were incorporated into a final plan.

The Dover, Kohl & Partners plan calls for new parklike areas and roads through the shopping center. When the project is complete, said Glenn Sommer, the firm's director of operations, the area will no longer be a big building surrounded by acres of asphalt.

It will look like a little town. He calls the design a town center, a place where people live and work and relax.

There is no time frame for the plan, Mr. Sommer said. It will evolve as the market allows it.

When the plan was unveiled, two more small tenants -- a deli and a dry cleaner -- announced plans to move to the mall. It was a sign that things were happening at the shopping center.

The development company moved aggressively to recruit other tenants. The city kicked in $250,000 build a park near the mall -- a component of the design team's plan, another signal to the community that attitudes toward the shopping center were changing.

"All the stars were aligning," Mr. Wood said.

Now the development company says the mall is about 80 percent leased, a complete turnaround from 1997. About 70 percent of the space contains offices, and the rest is retail. It has a dozen specialty shops -- including a Gap Outlet, Nine West shoes and Dress Barn -- and it has 16 restaurants. It also has a YMCA in the shopping center.

There is also a playground and ice skating rink.

In September, Blue Cross/Blue Shield insurance company will open a processing center in the mall. It plans to occupy 170,000 feet in one of the department stores and employ 1,200.

The development company hopes to attract a grocery store and build 50 to 150 apartments or condominiums at the mall. So far, it has spent about $10 million on the mall. It plans to invest twice that much in the next four years.

In the meantime, Windward has invested in another mall in Baton Rouge, La.

So can something like this happen here?

The mall developer and the urban designers disagree about where revitalization can occur. Mr. Wood doesn't believe that every mall is suited for this type of redevelopment. Many things came together in Chattanooga to make it work.

"There are other malls that have this problem," he said. "Not every one of them can be developed the way Eastgate has."

But Mr. Sommer is more optimistic. Not every mall can use the same plan. But the right plan will work, he believes. It can happen anywhere.

"What we did is show the potential they had in the mall," he said.

Frank Witsil can be reached at (706) 823-3352.