No offices in Laurel Mall’s makeover plan

Listen to this article

Anyone driving along Route 1 in Laurel might drive right on by Laurel Mall if it wasn’t for the Macy’s there. But that could soon change as developers work on a plan to replace the outdated mall with a $100 million mixed-use project.

Plans for Laurel Mall call for residential and retail space — but no office space, a growing trend in the industry, according to economists. Developers have realized that office space is a tricky component to mix into retail and residential and doesn’t always work in certain communities.

“Putting office space at Laurel Mall is not in the plan,” said Tom Fitzpatrick, executive vice president and chief operating officer of Greenberg Gibbons, a leasing and development firm that was recently hired to revitalize the mall. “It needs to be appropriate to the market and this is a location where it’s a better residential-retail location.”

Greenberg Gibbons, an Owings Mills firm that has taken on several mixed-use developments in Maryland, is in the early stages of planning how Laurel Mall will be replaced by a slew of retailers mixed in with residential units. The plans are so preliminary that the firm doesn’t even have a timeline of when things would get going.

“We need to sit down and get some activity going on some of the anchors in the new town center,” Fitzpatrick added. “We still need to put together the financing.”

There’s at least a vision for a fitness club, cinema, food store, casual dining restaurants and other types of retail at the site. The firm, which will oversee management and leasing of the existing mall while the revitalization plans are finalized, would keep the Macy’s but relocate Burlington Coat Factory.

Ruling out office space, analysts say, is a good move.

“Office is a trickier component and it doesn’t work particularly well above retail,” said Ryan Severino, senior economist at REIS, a real estate market research firm. “We haven’t seen that be as successful as putting apartments above retail.”

Right now Laurel Mall, which opened in 1978, stands as a two-level, 650,000-square-foot enclosed mall — and it has zero tenants in its upper level, a stark contrast to the mall’s 1980s heyday. The rest of the space is less than 50 percent occupied. The space formerly occupied by JCPenney holds a furniture liquidator, and the lower level has a few national tenants, but it’s mostly local merchants on short-term leases.

Just four years ago, the mall’s owners, Somera Capital Management and AEW Capital Management, had plans to sink tens of millions of dollars to bring the mall back with a new brick façade, a first-run movie theatre, higher-end national retail tenants, a new parking garage and a decorative water fountain. But then General Growth Properties Inc., which was hired to redevelop the space, filed for Chapter 11 bankruptcy protection and the plans never took off. Somera and AEW have turned to Greenberg Gibbons to revitalize that revitalization.

“Developing anything these days is pretty challenging,” said Fitzpatrick. “But it’s a terrific location. We see more opportunities right now than challenges.”

That location, in the heart of Laurel on Route 1, was attractive for Greenberg Gibbons because of its proximity to Fort George G. Meade and the Pentagon’s base realignment process that’s bringing in thousands of jobs and families to the region.

Greenberg Gibbons has already had success with Annapolis Towne Centre, which it completed in 2009 for $500 million, and Hunt Valley Towne Centre, a $200 million project that opened in 2005.