With Macy's' surprise plans to close its massive downtown flagship store coming on the heels of Books-A-Million exiting from the neighboring Houston Pavilions, many are asking what's next for retail development in downtown Houston?
Speculation about the future of downtown has been circulating in Houston-based media, real estate and architecture circles for years. Despite efforts to bring sports arenas, entertainment complexes and conventions to the city center, dreams of a bustling downtown district have yet to be realized.
Mayor Parker announced the creation of a brand-new Downtown Retail Task Force and said that city officials had known Macy's was planning to close its downtown store.
Mayor Annise Parker, a champion of downtown Houston development, was quick in her attempt to squelch any negativity surrounding the Macy’s closure. She announced the creation of a brand-new Downtown Retail Task Force and said that city officials had known Macy's was planning to close its downtown store.
“I am charging a small group of experienced marketing and real estate professionals with aggressively seeking all options to increase the amount of retail and supporting parking in downtown,” Parker said in a statement. “With two hotels, multiple residential projects, new ownership of the Houston Pavilions, expanded light rail and other key projects on the horizon, downtown is booming, and retail is critical in making it a desirable mixed-use activity center.”
A new location?
Bob Eury is one member of the new task force and also serves as the executive director of the Houston Downtown Management District. He told CultureMap in a phone interview that the task force is working with Macy’s to find a new downtown Houston location.
“We are moving quickly to locate other options, which will probably involve new construction or development space.” Eury said. “Macy’s continues – as recently as this morning – to express their interest in moving forward with us on this. They would like to maintain their presence downtown; they think it’s a viable market for the company.”
Macy's "would like to maintain their presence downtown; they think it’s a viable market for the company,” said Bob Eury.
Eury explained that Macy’s, which took over the space in 2005 after acquiring Houston-based Foley’s, currently utilizes close to 300,000 of the store’s 791,000 square feet.
“They need a much more viable urban footprint, probably closer to 125 or 150,000 square feet,” he said.
CultureMap reported in November 2011 that plans were in motion to renovate the Macy’s building to accommodate new tenants in addition to a much smaller Macy’s. The Downtown Management District was reportedly in conversations with Hilcorp, the Houston-based oil and natural gas exploration firm which owns the building, as well as area architects.
“The owner spent a lot of time investigating options of redoing and maintaining the building to create a smaller Macy’s, but they just ran into a situation where they couldn’t make it work economically,” Eury said. “The ‘stay in the building’ option was exhausted, which brought it to a point where Macy’s needs to move out.”
The model for department stores
The Macy's location at 1110 Main Street is a 10-story, windowless structure that occupies an entire city block in between Dallas and Lamar. Originally built in 1947, the building was remodeled 10 years later to house an additional four floors.
According to David Bush, a spokesperson for Preservation Houston, the original Foley’s “basically became the model for modern department stores.” Advanced features for its time included rapid-moving escalators, flexible fixtures and complete climate control.
“It was kind of green ahead of its time,” Preservation Houston's David Bush explained.
“It was kind of green ahead of its time,” Bush explained. The only windows in the structure were the first floor display windows, which helped reduce climate control costs. “It didn’t have a heating system — the body warmth and the warmth from the fluorescent lights heated the building.”
“When [Foley’s] opened, it was written up in Time and national publications all came down here and covered it,” Bush said.
However, in recent years, the building has begun to show more and more signs of wear. The heating system was never updated, and according to Eury, “it’s a fairly aged property that they’ve been trying to make work for some time.”
Changing retail landscape
The retail landscape has also changed significantly in recent years. "When Foley’s was opened, it sold everything," Bush explained. "It had a stamp department, a bookstore, furniture. Now it’s basically clothes. It’s very different. A portion of the building makes sense but the whole building would be tough. Does anyone build stores that size anymore?"
In a statement, Macy’s Chief Financial Officer Karen M. Hoguet described the downtown closure as part of “the tough decision to selectively close underperforming stores that no longer meet our performance requirements or where leases are not being renewed.”
“The building is architecturally significant, and any developer who chooses to rework the building could be eligible for federal historic preservation tax credits."
The company is also closing stores in Honolulu, St. Paul, Minn., and Pasadena, Calif. According to the statement, these closures are “normal-course adjustments to [the Macy’s] portfolio.”
Macy's officials did not directly address the question of a new smaller store for downtown Houston.
When asked about the future of the Macy’s space, Eury said, “We would hope to be able to work with the owners to find a plan for that building. They’re moving into a timeline that’s looking towards redevelopment. “
Bush stated that Preservation Houston is also looking to be involved with redevelopment efforts when Macy’s moves out in two to three months.
“The building is architecturally significant, and any developer who chooses to rework the building could be eligible for federal historic preservation tax credits. Things are very preliminary right now, but we have a few developers that we are sending information to,” he said.
Hilcorp could not be reached for a comment on its intentions regarding the Macy’s property.
The Houston Chronicle reported that in a Thursday afternoon press conference Parker said that Hilcorp is “planning on demolishing the current site and...wants to build a commercial office building on that site.”
Liquidation sales will begin on Monday and last for up to 11 weeks. Some of the 138 associates at the downtown store will be offered positions in other Houston-area Macy’s locations.