FAYETTEVILLE, Ark. — Traditional malls are losing value and struggling to get customers in the door. The ones doing well cost a lot of money to maintain, and according to analysts, they have to give people an experience they can't get online.
“I think that big box retail has got a tremendous blow taken from the internet retail,” Max Avery said.
Avery is an entrepreneur who leases office space inside Central Mall in Fort Smith.
“There's a lot more local businesses that are starting to look at the mall now,” Avery said.
In 2018, Sears closed at the Northwest Arkansas Mall and Central Mall. A gym is now using the space at Fort Smith’s mall.
“It's fun to watch people that have been here during that time to reminisce on what this place used to be,” said personal trainer Matt Benavides.
In 2009 Central Mall was worth more than $9 million. In 2021 it went down in value by almost two-thirds to $3.4 million. The decrease means Sebastian County is getting fewer tax dollars. They’ll pay an estimated $197,476.
It's a similar situation at the Northwest Arkansas Mall in Fayetteville. They're both owned by Namdar Realty Group and declined our request for an interview. In 2009, the Northwest Arkansas Mall was worth $17.3 million. In 2021, it shrunk down to just a quarter of that at $4.1 million.
According to data from the Washington County Collector’s Office, they paid approximately $817,000 in 2009. It’s estimated they'll pay almost $215,000 for last year, which is about a 74% decrease.
These numbers are a big reason why Jim Cash, the owner of the Diamond Center moved out of the NWA Mall and Central Mall during the coronavirus pandemic.
"The malls, they've transitioned over the years and just the clientele, the traffic's not what it used to be,” Cash explained. “We've found being a free-standing store's a better footprint for us.”
Drive 20 minutes up I-49 from the NWA Mall, and you'll find the Pinnacle Hills Promenade. It opened in 2006 and Sr. General Manager David Faulkner has been there from the very beginning.
“We have all those traditional retailers,” Faulkner said. “But then we have entertainment for you like a Dave & Buster’s and a Malco Theatre."
The Promenade in Rogers is not only surviving, it's thriving. Faulkner says they maintain a high standard and the location is everything.
“We need to be Disneyland ready," he said. “Every time somebody comes to this property, it needs to be clean, neat, presentable.”
Unlike Central Mall and the Northwest Arkansas Mall, the Promenade's property value is going up. According to the Benton County financial administrator, the outdoor shopping center was worth $21.8 million in 2009 and went up to $26.6 million in 2021. The Promenade consistently generates more than $1 million in tax revenue back into Benton County annually.
“We can never get complacent,” Faulkner said. “We have to continue to maintain (our) high standards.”
It's not just the luxury stores that keep people coming back, it's the experience.
“There's so much to do here compared to some indoor malls that just have maybe shopping and some quick restaurants,” shopper Ann Harris said.
Harris has lived in Northwest Arkansas for 25 years, but Lindsay and Lilly Harvey traveled all the way from North Little Rock.
“We’re here for the weekend, just shopping, hanging out, eating lots of good food,” Lindsay said.
5NEWS talked with the Lowe family who drove in from Cassville, Missouri to shop at the Promenade.
“I think I like just the layout of it, how it's kind of kind of spread out,” Krystal Lowe said. "But I like the outdoorsy part of it or it's not real congested.”
These were just a few of the 8 million visitors the Promenade sees on average each year. Faulker expects the mall to be at its highest occupancy ever by the summer. Businesses are already in more than 90% of the space at the Promenade.
It should be noted Dillard’s owns their stores at all three malls and is not factored into the mentioned property values.