Sunday August 29, 2010

LANESBOROUGH -- It's midday on a recent Thursday afternoon, and the manager of the MasterCuts hair salon in the Berkshire Mall has no customers.

Tonia Maxwell said foot traffic isn't always this slow, but that it has gone down considerably over the past few months.

"It's different here now," said Maxwell, who has worked for the same company in the mall for 111 2 years. "Some days it's busier. Some days it's slower. We've lost a lot of businesses, so we don't have the walk-ins from the floor anymore. It's just our regular customers."

MasterCuts isn't the only business that has experienced a drop-off in foot traffic in Berkshire County's largest shopping center. The entire 22-year-old, 720,000-square-foot mall is suffering, with a plethora of store closings plus financial problems by the mall's owner, The Pyramid Companies of Syracuse, N.Y., which came within a month of defaulting on the mall's mortgage in February.

"Everyone is having a hard time here," a person with knowledge of the mall's struggles said, asking not to be identified. "There's no traffic. And the people who come here don't have the money to buy. That's the economy."

Old Navy and Lady Foot Locker left the Berkshire Mall in January, and Zales jewelers and McDonald's closed this summer. The latter two businesses had been in the mall for five years. Leaving before them were national chains The Gap and Linens n' Things, which liquidated its retail stores nationwide two years ago after filing for Chapter 11 bankruptcy protection.

Only three eateries remain in the food court; besides McDonald's, two other restaurants have closed this year.

As of Thursday, the mall had 17 dark storefronts among the 74 stores listed on a map at the mall's entrance, according to an Eagle count. That's a vacancy rate of 23 percent.

Shopping malls, however, measure their rates not by store vacancies, but by subtracting the total amount of leaseable space from the gross leaseable area, according to the International Council of Shopping Centers (ICSC), a trade organization.

The Berkshire Mall declined to provide The Eagle with its vacancy figure, but according to the National Council of Real Estate Fiduciaries, the national number for malls during the second quarter of 2010 was 10.4 percent.

Even though the methodology differs, the message is clear: The Berkshire Mall's vacancy rate is high. The question is: Why?

Theories abound, from the bad economy to high rents to poor road access to the mall.

"First of all I don't know that there's trouble at the mall," said Michael Supranowicz, chairman and CEO of the Berkshire Chamber of Commerce (the mall is a member).

"I would say that any retail decisions that are made right now are really being made as a result of the poor economy. You see it every day, and hear about it every day: People are not spending money because they're afraid that they'll lose their jobs. As a nation we haven't come out of the recession. Once people feel confident about their jobs, spending will begin again."

Maxwell, the manager at MasterCuts, said the number of vacancies has impacted the businesses that remain.

"A lot of people are going to other malls because we don't have the stores," she said.

ICSC spokesman Jesse Tron said national retail chains were able to carry stores that they opened in malls and shopping centers in unfamiliar markets when the economy was flush, but they had to cut back when the recession hit.

"The worst of it is definitely behind us," Tron said. "2009 was obviously a tough year."

The manager of an established business at the mall said small, private companies there have been hampered by rents that are too high for what the companies are taking in.

However, the owner of a small store that is about to open at the mall said the rent is low enough for him to afford to locate there. At least two new stores -- including one associated with a small national chain -- have opened at the Berkshire Mall this year.

A lack of road access also is being blamed for the shopping complex's struggles.

The section of the connector road between Route 7 and the mall closed on April 19 so that the road's long-awaited reconstruction could take place. That section might re-open in mid-October, a month ahead of schedule, according to Lanesborough Town Administrator Paul Boudreau.

Peter Niles, District 1 director for the Massachusetts Department of Transportation's Highway Division, said the construction contract calls for that section to be completed by Nov. 15.

Peter Niles, District 1 director for the Massachusetts Department of Transportation's Highway Division, said the construction contract calls for that section to be completed by Nov. 15.

"There is definitely an impact on mall traffic," said Ronald Tinkham, chairman of Lanesborough's Baker Road District, which is responsible for the connector road's maintenance.

"It's not really very well signed that people have to detour," said Winnifred Tannetta, manager of the mall's Eastern Mountain Sports (EMS) store, who said the road closing has affected her store's foot traffic more than anything else.

EMS, which has been in the mall since 2000, is still making its sales goals, Tannetta said.

Berkshire Mall General Manager Joseph M. Scelsi declined to comment on how the closing of the connecter road has affected the mall. But in a written statement, Scelsi said the mall's struggles are symptomatic of the problems his industry is experiencing nationwide.

"The difficult economic conditions that have occurred across the country over the last several years have certainly had an impact on the shopping center industry, and the Berkshire Mall has not been immune to those conditions," Scelsi said. "We have in fact experienced some additional vacancy in the center, which is not dissimilar to what many malls are seeing across the country.

"Having said that, the center stills enjoys a fine lineup of national tenants, and we remain confident in the future of the Berkshire Mall, the untapped potential and resiliency of the Berkshire County marketplace, and the support of the town of Lanesborough with all our endeavors."

Vacancies at the Berkshire Mall aren't uncommon. The then-90-store mall had an 87 percent occupancy rate when Old Navy arrived in September of 2000, and a 75 percent rate when the mall opened on Sept. 23, 1988.

But the speed of the current exodus has left longtime customers bewildered.

"Every time I come here there's a different store closing," said Hancock resident Alicia Woodbury, 34, who used to visit the mall on a weekly basis but now comes only once a month. "We come to Target, and that's it. I'd almost rather drive to [the mall in] Holyoke."

"It's OK, but it's not what it used to be," said 15-year-old Kelsey Borden of Cummington. "They're losing a lot of stores that I really liked, and I can't find the things that I used to find."

Richard Stanley, who developed and manages the Beacon Cinema in Pittsfield and began his business career operating (with his father) a chain of hair salons in numerous shopping malls, said the mall looks empty.

"The last time I went there, I just walked to the Sears entrance, and it looked like they were on their way out," Stanley said, referring to the mall in general. "I've been to a lot of other malls around the country, and it looked like a death spiral. If they [Berkshire Mall] lose one of their anchors [key stores], it will be a ghost town." Berkshire Mall is anchored by Macy's, Sears, Target and J.C. Penney.

"The last time I went there, I just walked to the Sears entrance, and it looked like they were on their way out," Stanley said, referring to the mall in general. "I've been to a lot of other malls around the country, and it looked like a death spiral. If they [Berkshire Mall] lose one of their anchors [key stores], it will be a ghost town." Berkshire Mall is anchored by Macy's, Sears, Target and J.C. Penney.

Boudreau, the Lanesborough town administrator, said he isn't worried that the mall will close.

"We're in a downturn, and obviously that's going to affect everyone, including the mall," he said. "I'm not really concerned about it. Stores come and go. It's somewhat accelerated right now."

Lanesborough received $798,
700 in tax revenue from the mall in fiscal 2010, according to the town's board of assessors.

As for the Zales and McDonald's departures, spokeswomen for both companies said the closures were due to their stores failing to meet sales goals and profitability margins more than any specific problems that involved the Berkshire Mall.

The Zale Corp., based in Dallas, has been downsizing, according to spokeswoman Roxanne Barry, and closed 149 stores across the country in the 12-month period that ended in April.

McDonald's spokeswoman Mary Scanlon said the chain's mall eatery "is just a victim of the struggling economy," and that the decision to close happened to coincide with the restaurant's lease being up for renewal.

"Retail sales are very weak," Scanlon said, "and mall sales are weaker than in the rest of the population."

Prime Outlets at Lee, Berkshire County's other large-scale shopping center, has weathered the recession better than the mall.

All 60 of the outlet mall's storefronts are occupied, including a Zales outlet, according to the facility's marketing manager, Carolyn Edwards.

"The economy is bad and unemployment is high," Edwards said, adding that the outlet mall received a boost from the state's recent tax-free weekend. "We get a lot of tourists. That's pretty much what's been carrying us."

To reach Tony Dobrowolski:
TDobrowolski@berkshireeagle.com
(413) 496-6224