DOVER – To position itself for current business trends and Kent County’s overall economic development efforts, Dover officials have amended the zoning code to allow for the distribution and use of warehouses in regional shopping centers.
Dover City Council unanimously accepted the recommendation on July 12. The new zoning language would only affect Dover Mall, a 554,000 square foot shopping complex next to Dover International Speedway.
Dover Planning and Inspections Director Dave Hugg said the zoning change could pave the way for new life in the mall.
“It’s no secret to all of us that regional malls across the country are suffering, and the Dover mall has certainly not escaped that fate,” Hugg told the council on July 12. “It is highly unlikely that the mall will continue to function sustainably as a regional shopping center without being able to take advantage of customer behavior and new opportunities.
Warehousing and distribution are among the most targeted industries for central Delaware, according to Kent Economic Partnership executive director Linda Parkowski. Strengths such as easy access to major highways and existing warehouses and grounds make Kent County an ideal distribution location for businesses across the country.
“With the rezoning of the Dover Mall, we will have more sites to market,” Parkowski told the Delaware Business Times. “We’ve seen a similar rezoning of malls across the country and we’re lucky Dave Hugg was proactive.”
Built in 1982, the Dover Mall has seven key tenants, including Sears, Macy’s, JCPenney, Boscov’s, Dick’s Sporting Goods and Old Navy. But over the years, some stores like For Your Entertainment have reduced their footprint while others like Hobbytown and Jeweler’s Loupe have moved on to larger space at a lower rent.
Today, about 12% of the Dover Mall is vacant, Hugg said.
Shopping malls have been a major achievement for the past three decades – especially in Delaware tax-free sales – with about 24 square feet of retail space for every American, according to accounting consultancy PwC. But as online shopping has become a convenient and affordable option, it has reduced profits for traditional retailers.
Job vacancies in U.S. shopping malls reached 11.4% in the first quarter of 2021, the highest percentage in a decade, according to Newmark and Moody’s Analytics REIS.
The Dover Mall was valued at $ 129 million in 2011, but then fell to an estimate of $ 41 million in 2021, according to loan data reported by data analytics firm Trepp. Simon Property Group, a publicly traded real estate investment trust, owns the mall.
But the best sign of the future may come from Macy’s mall, where the former retail tenant has turned into a distribution center. Last October, executives at Macy’s announced they would end in-store sales of the Dover store and another in Colorado while launching a pilot program for “omni service centers”, where customers could pick up in-store or curbside orders, make returns and pay invoices.
While the holiday rush has long passed, Macy’s spokeswoman Carolyn Ng Cohen said the retailer plans to continue using fulfillment in the Dover department store. The number of positions would not be affected by this change.
“Macy’s customers are increasingly diverse in how they choose to shop with us, using the Macy’s mobile app or shopping at macys.com, shipping to their nearest store or while visiting a store, ”Cohen said. “As a result of this change, we have seen an increase in demand across the network to provide our customers with their product when and how they want it. “
With 19-foot ceilings, loading docks, ample parking, and ample retail space, Hugg noted that a slight change in zoning language would open the door if Simon Property Group was to move towards a use of distribution or warehouse.
Simon Property Group did not respond to the Delaware Business Times request for comment.