Once a fixture of American culture, traditional enclosed malls are continuing to struggle amid the rise of e-commerce and, more recently, the COVID-19 pandemic.
The Triangle hasn’t gone unscathed.
Northgate Mall in Durham closed in 2020 and is now being redeveloped. In 2021, Cary-based Epic Games purchasedCary Towne Center for $95 million, then demolished it to make room for its new headquarters. Raleigh’s Crabtree Valley Mall is up for sale. University Place in Chapel Hill and The Streets at Southpoint are hoping to defy trends by evolving into mixed-use developments with residential, office and retail components. (The Southpoint proposal, though, came under some piercing questioning from the Durham Planning Commission.)
Here’s a closer look at what’s in store:
Durham’s Northgate on verge of transformation
Backstory: Northgate Mall, opened in 1960 and enclosed in 1974, was a shell of its former self when the pandemic finally pushed its investment firm owners to close it for good in May 2020. The mall had been losing tenants for years and now sits largely empty on 55 acres north of downtown.
What’s happening: Northwood Investors paid $34.5 million for the mall in 2018 after threatening to foreclose on it the same year. The movie theater remains open, as do some shops across the parking lot anchored by Planet Fitness.
Northwood’s retail team intends to redevelop the property as a life sciences campus, but neighboring residents have fought back. They want housing — preferably affordable — and a walkable complex with a grocery store, places to gather and better stormwater infrastructure.
Northwood must get City Council approval for its plans. It hopes to start construction next year.
Side note: In 2017, Duke University Health System paid $4.5 million for the former Macy’s department store to house offices and medical clinics. A spokesperson wrote in an email Tuesday that Monte Brown, the health system’s vice president of administration, “said everything is on hold and there are no immediate plans to move forward.”
The shops and mall, excluding Duke’s wing, total 1.1 million square feet, according to Northwood.
A new era at Southpoint
Backstory: The Streets at Southpoint opened in 2002. It’s Durham’s only remaining mall after Northgate closed and South Square was torn down in 2003 and it’s not just surviving. It’s thriving.
The bustling shopping center is home to 174 retailers spread over 132 acres, according to Brookfield Properties, a real estate investment trust that acquired the mall’s operator five years ago in a $15 billion deal.
What’s happening: Brookfield wants to rezone the property so it can add up 1,382 apartments, a 200-room hotel, and 300,000 square feet of office space.
More details: The existing mall is 1.3 million square feet and its total footprint could swell to 3.3 million square feet under the proposed rezoning.
Since then, it has doubled the number of proposed apartments.
Brookfield also has to go through City Council. The Planning Commission took a first look at the plans Tuesday night, but recommended against the project. The commission said the designs aren’t specific enough, and do not include workforce housing.
University Place’s resurrection
Backstory: Formerly known as University Mall, the shopping center was built in 1973 on 40 acres two miles northeast of downtown Chapel Hill. It’s the town’s only enclosed shopping mall and is anchored by SilverSpot Cinema.
What’s happening: Ram Realty Advisors, which bought the aging mall for $51.6 million in 2018, is demolishing the vacant A Southern Season store to make way for a mixed-use development. It involves replacing one end of the mall with six new retail and office buildings, a public green, a parking deck and space for a future hotel. The price tag: $160 million.
A standalone Chick-fil-A will replace the vacant K&W Cafeteria, and an apartment building with ground-floor retail and a parking deck is under construction at the other end of the site.
A building that currently houses Harris Teeter and Chapel Hill Tire will remain for now, and the remaining mall storefronts are being turned to face the parking lots.
In total, the redeveloped site will have 350,000 square feet of retail and restaurants, 60,000 square feet of offices, 253 apartments and 150 hotel rooms.
Most of the construction could wrap up by 2025.
Crabtree Valley Mall’s uncertain future
Backstory: Crabtree Valley Mall opened at the intersection of Glenwood Avenue and I-440 in 1972. Original anchors were Hudson Belk, Sears, Miller & Rhoads and Thalhimer’s.
What’s happening: The mall remains one of the Triangle’s busiest shopping centers. But more than a year after its longtime owners, CVM Holdings, put the 57-acre property up for sale, the mall remains on the market.
Details: The property is zoned for commercial mixed-use up to 12 stories. It has an assessed value of roughly $382 million, according to property records.
The mall has two anchors left after Sears closed in 2018. One is Macy’s; the other is Charlotte-based Belk, which filed for bankruptcy in February 2021.
Prospective buyers face another challenge: The property was built in a floodplain. Crabtree Creek, a 29-mile tributary of the Neuse River, runs directly behind the mall.
The sale price could reach north of $95 million, speculated Vijay Shah, senior vice president at Raleigh-based Trademark Properties, last December.
Cary Towne Center’s demolition complete
Backstory: Cary Towne Center, once known as the Cary Village Mall, opened in 1979. It closed for good in January 2021 after Epic Games, the video game developers behind Fornite, purchased the site for $95 million to make way for a new campus.
What’s happening: In early 2022, Epic Games demolished the mall. To date, it’s only presented rough details of how it could build on the property.
The preliminary plans showed up to 2.7 million square feet of office space, a motion-capture studio and a central utility plant, 75,000 square feet of retail, and up to 200 hotel rooms.
Plans also mentioned a private road that would circle its offices; and several berms along the perimeter of the property for security.
More details: More than a year after pitching its rezoning request to town officials, its application remains at a standstill.
“The next step is for the applicant to request a hearing in front of the planning and zoning board,” said Scot Berry, chief development officer for Cary’s inspections and permits division on Wednesday. “Epic has recently closed out their demolition permit, but hasn’t asked to be on the planning and zoning board schedule.”
This story was originally published March 15, 2023, 3:32 PM.
Chantal Allam covers real estate for the The News & Observer and The Herald-Sun. She writes about commercial and residential real estate, covering everything from deals, expansions and relocations to major trends and events. She previously covered the Triangle technology sector and has been a journalist on three continents.
Mary Helen Moore covers Durham for The News & Observer. She grew up in Eastern North Carolina and attended UNC-Chapel Hill before spending several years working in newspapers in Florida. Outside of work, you might find her biking, reading or fawning over plants.
Written By The Chesapeake Alliance
The Alliance acts in a business advisory capacity to the city of Chesapeake (staff and City Council) representing the opinion of the city’s business leaders on several key initiatives undertaken by the city.
Ready to Join the Chesapeake Alliance?
If you’re interested in joining the Chesapeake Alliance, please fill out our application to get started.