Norfolk’s MacArthur Center may meet the wrecking ball

City considers mall’s future

Published March 5, 2021 by Rich Griset

Downtown Norfolk’s MacArthur Center, a 140-store mall that opened in 1999, may have a future date with a wrecking ball.

According to a newsletter released March 2 by Norfolk’s economic development department, a complete teardown of the 1.1 million-square-foot structure is one of three possibilities envisioned for MacArthur Center’s future by the city, which does not own the mall. This option would build a new urban district with a street pattern that reopens Bank and Court streets to connect the Scope arena and Chrysler Hall with Norfolk’s Main Street and the Waterfront area.

Another option outlined for the 23-acre property would open up the ends of the mall, lighten up the exterior and place retail on the ground floor and offices above. A third possibility would “de-mall” the center, and reopen Market Street as a landscaped, pedestrian-friendly promenade with mixed-use buildings that included residential space. It would also line City Hall Avenue with micro retail and craft manufacturing, as well as small services and businesses.

The newsletter highlights a section of the city’s previously released Downtown Plan 2030, which is meant to guide Norfolk’s long-term development into the next decade. The newsletter credits MacArthur Center as being a catalyst for downtown development, generating more than $4 billion in retail sales and $157 million in tax revenue for Norfolk since it opened, but states that the shopping center must be redeveloped to ensure its future viability.

“The nature of retail has changed globally, and a 1,100,000-square-foot indoor shopping mall is no longer viable in downtown Norfolk,” the newsletter reads. “Since MacArthur Center opened 20 years ago, the number of competing department store chains has drastically diminished. Local/regional chains have virtually disappeared, and national chains have contracted the number of stores they operate.”

The newsletter states that a phased redevelopment will take place, focusing on the anchor space that once had Nordstrom as a tenant, then working to de-mall the building’s interior and reconnect the property to its surrounding street grid.

Jared Chalk, Norfolk’s director of economic development and executive director of the Norfolk EDA, says that MacArthur Center has been a successful development, but that the mall needs to be repositioned to ensure its future viability.

“At the time it was built, it really brought new people downtown. It changed the way in which people from the suburbs envisioned downtown, and created a walkable place in our core,” says Chalk. “The idea is really how to break open the mall and integrate it into Downtown Norfolk.”

Still, according to The Virginian-Pilot, the city doesn’t own the mall, and can’t control what happens to it. Norfolk owns the land the mall sits on, part of the mall, the mall’s parking structure and the anchor space that had Nordstrom as a tenant until mid-2019. The mall structure is owned by Starwood Property Trust, which the Pilot says defaulted on an interest-only loan worth $725 million in late 2019 that used MacArthur and three other malls as collateral. $681.6 million is still owed on that loan.

Chalk says Starwood is “a good partner. They recognize the need to add additional investment into the mall.”

Calls placed to Starwood Property Trust on Friday were not immediately returned.

Referencing the city’s efforts to redevelop its Military Circle Mall property as another example, Chalk says Norfolk is dedicated to revamping its assets.

“We’re not just going to continue to let a mall decline. We’re going to be aggressive in our steps to reposition it.”

Subscribe to Virginia Business.

Get our daily e-newsletter.