Why did JCPenney close? Chesapeake Square owners prep for at least $20 million redevelopment
Mall owners across Hampton Roads are prepping multimillion-dollar redevelopment projects to counter the rise of online shopping, and Chesapeake Square is no exception.
The owners of the 717,000-square-foot shopping center plan to spend $20 million to begin redeveloping the western half of the mall within the next two years, Chris Good, director of commercial properties for Kotarides Cos., said in an email.
In fact, the redevelopment was the reason Kotarides leaders chose not to renew anchor store JCPenney’s lease last year, Good said.
“In all honesty, the phone has not stopped ringing with companies interested in coming to Chesapeake Square,” Good said. “To accommodate those retailers, we want to be able to redevelop the western half of the mall where JCPenney was located.”
The anchor store’s closure Feb. 28 capped off a string of retailers leaving the mall — Sears and Macy’s, along with smaller stores like Aeropostale and Payless ShoeSource, exited years ago.
Still, more than 2.9 million people visited the mall last year, Good said. He added that the mall also experienced its highest sales in several years. Rainbow Fashion and clothing and footwear store DTLR more than doubled their space, and The Twisted Crab seafood spot opened a location.
Business owner Philip Scotti has operated a Philip Michael Fashion for Men in Chesapeake Square for more than 10 years. Sales have been good recently, but Scotti said the retailer drives much of the traffic with heavy advertising. Foot traffic seems to run from Burlington Coat Factory to Target and is slower than other malls, he said. He estimated that about 20-25% of customers were from foot traffic.
Scotti was upbeat about redevelopment plans and said the mall is in a great location just off Interstate 664 in Western Branch.
“I would think it would be excellent,” he said.
Mall owners are looking to the larger community as they plan redevelopment, Good said. Two new Amazon fulfillment centers employ around 1,900 people, he said. Kotarides also is in the midst of building two new master-planned communities — Jolliff Landing and The Grove — that will include more than 1,770 new homes. Good said company leaders hope the developments will boost mall traffic.
Malls in Hampton Roads have been the hardest hit retail sector by the pandemic, presenter Erica Rorrer said Tuesday during the Hampton Roads Real Estate Market Review & Forecast.
“Because malls house larger big-box stores, they have experienced closures unlike any other segment,” Rorrer said.
Pembroke Mall in Virginia Beach announced at the end of 2021 it would close all interior stores as part of a planned $200 million redevelopment effort. The city of Norfolk is looking to redevelop Military Circle into space that would potentially include an arena or a large outdoor amphitheater. The owners of Greenbrier Mall in Chesapeake and Patrick Henry Mall in Newport News filed for bankruptcy in 2020 and emerged with financial restructuring plans.
Kotarides, which is headquartered in Virginia Beach, purchased Chesapeake Square in 2018 for $12.9 million.
Kotarides leaders hope to begin the first phase of the Chesapeake Square project in 18-24 months, Good said. The initial construction will cost $20 million, and Chesapeake-based RRMM Architects is the design partner.
Trevor Metcalfe, 757-222-5345, trevor.metcalfe@pilotonline.com
