UNION TOWNSHIP, Ohio — With its long-promised revival stalled by litigation, Eastgate Mall is fading fast.
A series of store closures this year has increased the mall’s vacancy rate to 59%, according to a WCPO 9 I-Team analysis of mall space excluding anchors.
And that could further increase to 75% by next year, when three existing tenants said they plan to relocate.
WATCH: What is the future of the Eastgate Mall?
“Our lease is up in March of next year and we’ll be leaving the facility,” said Jack Cary, owner of Furniture Connection, which operates an 18,000-square-foot showroom near the mall’s center court.
L.A. Nails, an Eastgate Mall tenant for more than a decade, also confirmed plans to relocate, citing a decline in foot traffic at the mall’s JCPenney wing.
Time Warp Cards & Comics signed a letter of intent for a new location this week, citing frustration with Eastgate’s Georgia-based owner, Hull Property Group.
“There’s been no real upkeep here,” said Time Warp owner Ron Taylor. “Plus, we’ve seen the plan that’s been online with Hull talking about tearing down the mall completely.”
Hull has not responded to requests for an interview. Taylor and Cary said the mall’s general manager was recently fired.
But one retail expert said the rising vacancy rates could increase pressure on Hull and the Kroger Co. to settle their pending lawsuit and work together on the mall’s redevelopment.
“I don’t think Eastgate Mall is positioned to survive the way that it is today,” said Josh Rothstein, vice president of sales and leasing at OnSite Retail. “But I think the land on which it sits, being at the corner of State Route 32 and I-275, will surprise everybody once it really comes back to life.”
Limbo mall or zombie mall?
Eastgate Mall has been stuck in a holding pattern since December 2023, when Hull sued to prevent the Kroger Co. from demolishing a vacant Sears store to replace it with a $35 million Kroger Marketplace store.
A Clermont County judge granted an injunction in June, but Kroger is appealing that decision.
In the meantime, Eastgate tenants and shoppers have been digesting details that emerged from the court case.
Those details, discovered in court records by Union Township Trustee John Becker, included an email showing Kroger bought Sears partly to block Costco from claiming that location, which is across the street from an existing Kroger store.
“If I’m advocating for Kroger, it’s brilliant,” Becker said. “As a consumer, as a Union Township trustee, I don’t like it at all. I’d like to see more competition.”
Another big disclosure involved a redevelopment plan that Hull shared with Kroger in 2023. It proposed demolishing the mall so a Kroger and Menard’s store could be built on the Sears site, facing State Route 32.
Becker said the plan could explain why Hull has yet to invest $2.9 million in a new roof, as one of its executives testified that it would during a four-day trial in September 2024.
“If they’re planning to tear it down, it makes sense just to put band aids on things,” Becker said. “That’s what I’d be doing if it were my business.”
Even though Kroger and Hull never agreed to the 2023 redevelopment proposal, Taylor said its public release in June had a big impact on tenants that were already beleaguered by a series of store closures this year.
Those Eastgate closures included GNC, Discovery Zone, Glow Golf, Claw Crazy Arcade, Blackout Tees, Denno’s International Gifts and Eutopia.
“We’ve been talking about moving the last couple of years, but that really helped along the discussion that we need to get out of here,” Taylor said, “There’s only so many retail spots here in Eastgate as it is and everybody else is trying to do the same thing.”
‘It’s very disheartening’
Time Warp’s departure would create a 16,000-square-foot vacancy at Eastgate, which is roughly 6% of the mall’s non-anchor space, based on the I-Team’s analysis of a 2019 leasing map published by LoopNet.
It shows Eastgate Mall has 67 spaces in the corridors between its anchors, offering 260,452 square feet to prospective tenants.
Back in 2019, about 74% of that space was occupied with a tenant roster that included H&M, American Eagle, Victoria’s Secret and Willis Music.
When the I-Team visited the mall on Sept. 15, 39 of those 67 storefronts were vacant and four others were not open for business during the mall’s regular hours.
Stores that aren’t open during mall hours are a red flag for retailers evaluating whether a mall is performing at a high level, one expert testified during the September 2024 trial.
“It was the wild west in there and everybody’s hours are different,” said Mark Fallon, a partner in charge of leasing at Jeffrey R. Allen Real Estate. “A lot of them don’t even open on Monday or Tuesday, which is not customary and it’s a reflection of a bad first-class mall.”
Fallon, testifying on behalf of Kroger, said the Dillard’s store would not be viewed by retailers as a real asset for the mall because it’s a clearance store with no access to the mall.
“When you take a look at what’s the real occupancy, I would say the occupancy at best is 50 to 55%,” Fallon said.
A Hull Property Group executive disputed Fallon’s assessment.
“It’s operated in a first-class manner today,” said Patrick Muller, Hull’s vice president of acquisitions, appraisal and finance. “We’re keeping it heated. We’re lighting the exterior, unlike the Sears parcel. We provide security. We clean the building. And then we’ll have to make repairs needed over time.”
But that isn’t how the owner of Furniture Connection sees it.
“People think the mall’s closed,” Cary said. “It’s in worse shape (than any time since) I’ve been here in four and a half years at this mall. And it’s very disheartening.”
‘It doesn’t matter to them’
Cary had high hopes for Hull Property Group when it announced the mall’s purchase in September 2023, with the goal of repositioning the property into “a viable shopping and dining destination.”
But his hopes dimmed when Hull signed the Claw Crazy Arcade, an unmanned gaming center that opened next to his mattress store in September 2024.
“We literally had kids trampling from mattress to mattress,” Cary said. “It wasn’t a good look. Very loud. And I was told that they signed a long-term lease and couldn’t be moved.”
So, Cary closed the mattress store, converting it to a warehouse that isn’t open to the public.
Several months later, Claw Crazy also closed its Eastgate location.
“They were gone after 10 months,” Cary said. “It’s just an unfortunate situation.”
Cary also butted heads with the mall over rent issues.
“The owner said, ‘Hey, you can’t find space around here anyway for what you’re paying,’” Cary recalled. “I said, ‘Let me show you.’ And that’s when we leased the old Logan’s Steakhouse outside.”
Cary plans to relocate his showroom to the 6,500-square-foot former restaurant on Eastgate Mall’s ring road. For now, it serves as a billboard facing State Route 32, directing customers into the mall until his Eastgate lease expires.
As the mall empties, it likely remains profitable for Hull, thanks to continuing rent from three anchors and land leases on property outside the mall’s ring road.
“One of the hotels is staying on a land lease and we also have Big Lots sitting on a land lease,” Cary said. “Put all those dollars together. You’re cash flow positive. So, that’s why it doesn’t matter to them what happens to the mall.”
Prospects for a settlement
Kroger and Hull are among five owners that enjoy veto power to block major changes at the mall until their reciprocal easement agreements expire in 2030. That means either can block major changes at the mall, while both benefit from the status quo.
Hull’s director of acquisitions, Caroline Hatcher, testified in the September trial that the mall generated $3.2 million in rent and distributed $1.4 million in cash to Hull in its first nine months of ownership.
“This is indicative of a very successful investment,” Hatcher said. “It’s what we underwrote. It’s what we predicted.”
Kroger Senior Real Estate Manager Lisa Ammons also testified that its Sears purchase created value for Kroger by blocking Costco from a prime site.
“This provides us a competitive advantage from a timing perspective,” she wrote. “I’ve been asked by the brokers representing Costco and Menard’s if we would sell our site.”
After Ammons read the email during last September’s trial, she downplayed the value of that competitor impact.
“If Costco wants to buy another piece of the Eastgate Mall, they are more than capable of doing that,” she said. “That does not box out Costco.”
But Rothstein said the mall’s deteriorating condition could inspire Hull and Kroger to re-evaluate their positions.
“There’s a big play to be had here,” Rothstein said. “And neither of them can do anything without the other’s right. So, they need to figure out how to play together in the sandbox before anything can happen.”
Rothstein thinks Kroger could improve its competitive position by being the sole grocery anchor in a row of big box chains that front I-275 and State Route 32. That leaves plenty of room on the 110-acre site for multifamily or senior housing, hotels, entertainment and restaurants, Rothstein said.
“There are no amazing restaurants in Eastgate. There need to be. There’s a market for it,” Rothstein said. “And if they can figure out how to get what they want and also create a good opportunity for the rest of the site, that is what I would love to see happen.”
