NORFOLK, Va. — Twenty-four years after it first opened, it's a new era at MacArthur Center.
In June, the city council approved spending $18 million to acquire the mall, except for Dillard's.
Since then, the anchor store decided to close and the city is in the process of purchasing the store for $4 million, the city's interim economic director told News 3.
"In order to really have control of what the outcome of our downtown and region was going to be, we felt it was important that we had the strategic position within the asset itself, so we wanted to make sure that always have a seat at the table," Sean Washington, who also serves as the executive director of the Economic Development Authority, told News 3.
News 3 recently met with Washington at the mall to talk about the plans for its future as well as what will happen to it now.
"We plan to keep this mall operating in the condition that you see it now, in terms of the appearance, the cleanliness, and everything that's available to you," Washington said.
How the mall got to this point isn't unique to MacArthur. Recent data analyzed in the Wall Street Journal found some malls dropped in value by more than 70-percent compared with 2016.
"Shopping has changed, and this has only accelerated with the pandemic," said Dr. Bob McNab, an economist at Old Dominion University. "If you are sitting at home today awaiting a delivery from eBay or Amazon or another online retailer, you know exactly what I'm talking about."
While the issues at MacArthur have been well-documented, some malls, like Lynnhaven Mall in Virginia Beach and Patrick Henry Mall in Newport News, continue to stay busy.
Lynnhaven and Patrick Henry are both nearly 100-percent leased, according to mall spokespeople. By comparison, MacArthur is about 57-percent occupied, according to mall management.
"Some malls are thriving, but they're thriving because they're in the right location at the right time with the right mix of retail," said McNab.
Once stores start to leave, that signals trouble.
"Once a mall starts dying, it's almost impossible to reverse that trend. So you see one major retailer leave, then the next, then the next, and then all of the sudden you have empty parking lots and an empty mall because nobody wants to go there because there's nothing happening there," said McNab.
Nordstrom, another anchor store at the mall, left MacArthur in 2019 and that's when data shows the mall really started to decline.
According to documents filed in court amid a tax dispute and the then-owners in 2022, an advising group estimated the mall's worth to be around $149 million in 2018.
Following Nordstrom's departure, the value fell to around $90 million.
Then, the pandemic took its toll as more stores left, and the mall's value was estimated to be around $23 million in 2022.
The Virginian Pilot first reported the findings of the advising group.
"MacArthur Center is just suffering from the same disease that is plaguing many malls across the United States," said McNab.
The same report also says the mall's classification fell from a "B" grade in 2018 to a "D" in 2022, meaning it's underperforming and in need of significant investment to redevelop.
Washington says the city is currently evaluating what to do with it and says office space or some sort of residential development are all possibilities.
"There's a lot of research that needs to be done, but right now really leaning on our experts is what's next," said Washington.
By comparison, Pembroke Mall in Virginia Beach is currently going through redevelopment.
Norfolk's 2030 plan for downtown also outlines three potential options for MacArthur, one of which is demolishing it and building a new urban district.
News 3 asked Washington whether that option is still on the table. "I would say it's being looked at," he responded.
Washington says there is no timeline on a next step at the moment, but doesn't think city leaders will wait too long.
"Right now, it's a lot of conversations with consultants. We're not in the mall business as we like to say, so we really want to talk to the experts to really understand what's going to be the next highest and best use for this particular asset," said Washington.
