Paula Gardner

Associated Press

Roseville — The original Macomb Mall tower sign on a Gratiot corner may remind Metro Detroit of the 1960s and suburban shopping centers that pulled generations of consumers from traditional downtowns to single buildings anchored by Sears, Crowley’s and Kresge.

But now the retro sign also is signaling a rebirth for the mall in Roseville.

Once close to closing, Macomb Mall now boasts a wave of new tenants and upgrades, and 95 percent occupancy across its 900,000 square feet.

The new owners poured $30 million into improvements since 2013 while year-over-year sales shot up 50 percent in 2015.

But it’s a community story, too, said Scott Adkins, city manager of Roseville.

Macomb Mall just celebrated its 50th anniversary as a regional destination and employment base, a milestone that looked unlikely five years ago.

When Lormax Stern made an offer on the distressed property, Roseville officials had been forced to consider what could happen to the city’s Gratiot corridor if the mall closed.

“If they hadn’t come in and bought the mall, I’m not sure anyone would have,” Adkins said. “This was not the most polished and lucrative deal on the table for most people.”

Lormax Stern looked at it differently: Despite all obstacles, the company saw potential.

“This is a solid, stable shopping destination,” said Chris Brochert, a partner in Lormax Stern, which owns the mall as Macomb Mall Partners LLC. The company, based in Bloomfield Hills, has developed more than 20 million square feet of retail space, and it owns multiple retail centers in five states.

Brochert described his company’s forte as “buying distressed properties and turning them around.”

He added: “We know … southeast Michigan.”

Roseville city tax records indicate a $12.7 million purchase price for the 40-acre mall in April 2013. That followed the mall being listed for sale in 2012 with two other distressed retail properties: Bay City Mall and Lakeview Square Mall in Battle Creek.

At the time, the three properties had a combined outstanding debt of $102 million, according to a report from CMBS Market Watch Weekly in September 2012. Macomb Mall’s share of that was $41.2 million, though it appraised for $12 million, according to data presented in that report.

The outlook for Macomb Mall was bleak, even as Michigan was emerging from the Great Recession. The shopping center was 69 percent occupied. Its owner couldn’t cover its loan on the property and was paying interest only on the debt.

“The defendant has been unable to pay its utility and service bills and may have to shut down Macomb Mall,” read a filing in litigation over then-owner Thor Equity’s loan default as reported by WDIV-TV in 2011.

Brochert recalled it as a tired property with an outdated appearance and a tenant mix that just didn’t click.

That’s changed over the past two years.

Dick’s Sporting Goods now sits on the space where a closed Crowley’s once stood as an anchor. That old building was razed to make room for the 50,000-square-foot Dick’s, creating the home of one of the chain’s top-performing Michigan locations.

The busiest stores remain. Some, like Lane Bryant, moved to larger locations. Old Navy, the first store opened by the Gap-related chain in Macomb County, signed a long-term lease. Payless doubled its store size. Bath & Body Works added its White Barn Candle brand to an adjacent store. Party City looked to expand and remodel. Some kiosks upgraded to store space.

“All of these stores weren’t prepared, based on the direction of the mall, to make that commitment (earlier),” Brochert said.

Lormax Stern changed the look of the mall as new stores moved in: Rue 21, Ulta and H&M are examples. Several stores had to move to make room for the H&M footprint of 20,000 square feet, but the store, opened in fall 2015, is attracting a new wave of shoppers, Brochert said.

Those shoppers now find seating groups where kiosks once stood. Corridors have new, brighter lighting. The mauve accents are gone, replaced with a more current green trim.

“I think people like to shop in bright, natural light,” Brochert said. “It has a positive, uplifting feel.”

To achieve the double-digit sales gains, some businesses closed. Some were typical mall stores, like American Eagle and New York & Co. Others reflected previous mall ownership’s less-focused strategy for strong co-tenancy.

“We had a lot of tenants (that didn’t fit),” Brochert said. Browsing for clothes, soccer shoes and makeup didn’t mix with sales of cigars, lottery tickets and prepaid cell phones. A discount cinema on one end of the mall also created its own issues; it was closed.

Ramsey Paton, 87, walked in the mall one day in late March. He moved to St. Clair Shores in 1952 and has shopped at Macomb Mall since it opened.

“It’s 100 percent better,” he said. “There seems to be more people here all the time.”

Today, Brochert said, more changes are pending. A 13,500-square-foot vacancy on a corner of the Sears wing is close to a new tenant, stores like Old Navy still plan remodels and customers soon will see the former cinema razed.

He’s also hopeful that the Sears store, an original store in the mall, will see changes that boost its shopping draw. The property was owned by Sears since the mall opened; it’s now owned by Seritage Growth Properties REIT, a spinoff of Sears Holdings Inc., as of summer 2015.

While Sears plans to close 50 underperforming stores this year, the store in Macomb Mall faces different types of changes.

“There are plans to renovate,” Brochert said. And Sears is likely to add other retailers to the space, he added.

Roseville is home to about 48,000 people as of July 2015, according to SEMCOG estimates. North of Detroit in Macomb County, it’s separated from Lake St. Clair to the east only by St. Clair Shores.

The community is about 80 percent white and 12 percent black, according to SEMCOG. Eighty-two percent of residents do not have a college degree and the median household income was $41,853 in 2010, a drop of 22 percent since 2000.

Yet that blue collar community represents a stable market area for Macomb Mall, Brochert said. He notes that the immediate area “isn’t house-poor” and has disposable income to shop at the mall.

“It’s a very strong, stable neighborhood,” he said of the immediate three-mile radius for the store.

The broader market area, Brochert said, is responding to the mall’s new look and lineup. It’s reinvigorated as a regional shopping destination and not just drawing from the neighborhood: Within 10 miles of the mall, the population totals almost 860,000 people. That compares to a typical mall’s consumer base of 250,000 people.

While it is positioned to draw from a large population base, Macomb Mall also benefits from a lack of shopping center competition. The struggling Eastland Mall is closest; beyond that, Oakland Mall and Partridge Creek are destinations for the same shoppers.

Meanwhile, 2015 tax payments on the mall totaled more than $550,000, according to Roseville city records.

That revenue is part of what the property means to the city, Michigan’s first to be certifild “development ready.” Beyond that, Adkins said the upgrades at Macomb Mall are catalysts for changes along Gratiot, where a long-closed restaurant just reopened, LA Fitness just built a facility and other developers are now considering investments.

The changes, Adkins said, are “night and day. It was dated at best,” he said. “ They came in and not only did an exterior face-lift, but also many other changes.

“Everything they said they were going to do, they did — and then some. And it’s not finished,” Adkins said. “There’s continual reinvestment in the mall.”

That won’t stop, Brochert said. Lormax Stern will keep looking for opportunities on the property. While many may not have considered the investment during a time when some malls struggle, the fundamentals of Macomb Mall fuel its continued success.

That’s gratifying to the company, since some investors considered the mall purchase risky.

“There were no doubts in my mind that this would work out,” Brochert said.