People walk through Bellis Fair mall on Jan. 5. The retail vacancy rate of the mall dropped in 2023.
(Hailey Hoffman/Cascadia Daily News)
By FRANK CATALANO
Business & Work Columnist
Call it a tale of two Bellingham retail centers: one on the rise, the other in possible decline. But as with many things, nuance is in the numbers.
A report on 2023 commercial real estate in Bellingham seems to tell an obvious story on the surface. The analysis from Ryan A. Martin, co-owner and broker at Pacific Continental Realty, found that throughout the year, the downtown Bellingham retail vacancy rate rose from 4.8% to 6.4%. Over the same period the retail vacancy rate at Bellis Fair mall went in the other direction, from 11.4% to 6.4%.
This, when Bellingham’s overall retail vacancy rate — measured by the amount of square feet available — ended the year at a relatively steady 3.1%.
“Really, the numbers are pretty tight. There haven’t been wide fluctuations in retail,” Martin said. He said that’s primarily because Bellingham didn’t have any large big box retailers disappear, beyond Bed Bath and Beyond’s closure in the Cordata neighborhood last April as the national chain filed for bankruptcy protection.
But the disparity in data between Bellis Fair and downtown raises the question: Is Bellingham’s retail center of gravity shifting from downtown to Bellis Fair, reversing what happened in the decade after the mall was built in 1988?
Martin, and key figures with a stake in both locations, said it’s not that simple.
Downtown challenges
“I think it’s really hard to compare downtown to Bellis Fair, and we do that a lot as a community,” said Guy Occhiogrosso, president of the Bellingham Regional Chamber of Commerce. “I think it’s easier to compare downtown now versus downtown as it was.”
A key turning point in downtown’s vacancy numbers came in early September when Rite Aid closed its store at Cornwall Avenue and Magnolia Street. Until that point, Martin said, downtown’s retail vacancy rates had actually been declining for four quarters.
Rite Aid’s bankruptcy-related closing in the third quarter accounted for just under 14,000 square feet, Martin said, noting that only a couple of other single retail businesses downtown are similar in size, such as the Community Food Co-op on North Forest Street.
The Rite Aid at the corner of Magnolia Street and Cornwall Avenue closed in early September 2023. The building has been vacant since. (Hailey Hoffman/Cascadia Daily News)
The shuttering led to a highly visible vacancy on a busy corner, adding to perceptions that downtown was emptying out. Walking by the now-signless store on a January Sunday, all passersby see illuminated are bare racks and shelves labeled “Frozen Food,” “Seasonal,” “Cosmetic” and “Nail Bar,” as though the store was abandoned in a post-apocalyptic rush.
A number of smaller downtown businesses have also closed over the past year — including Vienna Cleaners, The Lucky Monkey and JoJo’s Doughnuts — citing factors from retirement to vandalism.
But some exits are also the result of cumulative stresses that began during the pandemic, including staffing difficulties and inflation-driven cost increases, said Jenny Hagemann, development and communications director for the nonprofit Downtown Bellingham Partnership.
“We knew pretty early on in 2023 there was a lot of optimism for the year ahead because they wouldn’t have to make COVID business decisions anymore,” Hagemann said. But those other business stresses continued, “and what I’d call ‘cultural issues,’” such as petty and more serious crime.
The nearly 2-year-old downtown ambassador program ended at the start of January as part of the city’s decision to consolidate security services. Instead, Risk Solutions Unlimited (RSU) will take over patrolling areas amid persistent complaints from business owners and workers about feeling safe.
The chamber’s Occhiogrosso said public safety concerns are part of downtown’s challenges. But so too, he said, are financial pressures that come from fewer downtown office workers and reduced retail and restaurant spending.
“We did project some changeover and vacancy increase,” Hagemann said of 2023. But she also pointed to the August opening of a downtown Gene Juarez Salons and Spas location and the expected February opening of a Fjallraven store, chains which “purposely chose to expand to downtown Bellingham in the past year.”
Bellis Fair mall fills empty storefronts
Three miles north of downtown, Bellis Fair mall’s fortunes have noticeably changed under its new owner of just over a year, 4th Dimension Properties.
A walk through the interior of the mall on Jan. 15 found fewer than two dozen unfilled storefronts — a significant difference from the 40 or so counted a year earlier.
Martin has seen the same progression. “In Q2 of 2022, there were about 50 storefronts empty,” he said. “I would say today, if you were to walk through there, it’s going to be a lot closer to 25 in terms of individual spaces.”
JCPenney is one of several anchor stores that continues to operate at Bellis Fair mall.
(Hailey Hoffman/Cascadia Daily News)
While vacant storefronts aren’t the same as vacant square feet, they’re a factor in the perceived health of the mall. The biggest individual square footage contributors are the anchor stores, retailers such as JCPenney, Target and Kohl’s (all of which own their property) and Dick’s Sporting Goods and Macy’s.
“They have not lost an anchor tenant,” Martin said. “I can’t remember the last time one of those anchor (spaces) was vacant.”
“If you don’t include the anchors, I would say our square footage occupancy has gone from about 69-70 percent occupied … to roughly 90 percent,” said David Prince, Bellis Fair’s general manager. “It’s a good 18-to-20-percent increase, and we’re pretty happy with that.”
Prince credited the increase to new owners “who are much more interested in working with local businesses” and not charging them the same as a multinational chain. In addition, he said, the mall has added community events and non-traditional mall tenants — a Bellingham Public Library branch opened in 2023 — to help increase foot traffic.
In addition to shops, Bellingham MakerSpace, Whatcom Wrestling Academy, Whatcom Intergenerational High School and Cascade Motorcycle Safety call the mall home.
“One of the ways that I always look at trying to track foot traffic is the sales of our food court tenants,” he said, explaining that most people are going to stop and eat something while they’re in the mall. “In the past year, every single one of our food court tenants increased sales over the last year, 2023 to 2022.”
Miracle Jones smiles with employees after cutting the ribbon to open their Bellis Fair mall shop.
(Hailey Hoffman/Cascadia Daily News)
The mall’s tenant mix does ebb and flow: Prince said that Champs Sports is closing its location, possibly part of an announced retail pullback by parent Foot Locker. But he said the newer tenants help generate interest.
“I had a local business owner talk to me today about a space, and she used the phrase, ‘I think it’s a good time to be at the mall again,’” Prince said. “And I hope this year will help us drive to maybe get those empty doors to single digits.”
Two places at once
Three local businesses have chosen not to choose: Ruckus Room, Zorganics and Miraculous Braidz & Beauty have locations downtown and at Bellis Fair. Part of the appeal, they said, are the differences.
“We opened the Bellis Fair location for the cosmetics. We wanted a location where there is more foot traffic,” said Frida Emalange, president of Zorganics Cosmetics. The Zorganics downtown salon and day spa on Grand Avenue, she said, attracts clients for its services more than products, so the Zorganics mall store opened in November.
Similarly, owner Miracle Jones of Miraculous Braidz & Beauty said she “always had hair products and supplies in my downtown location” since opening on Cornwall Avenue in October 2020, but not much foot traffic beyond the service clients. She started with a kiosk in the mall last year to sell products and braid hair, then moved into a storefront in January.
“I saw this as an opportunity to further connect with people and advertise services and events,” Jones said. “It reaches people in the masses.”
Ruckus Room — an arcade and game entertainment center — lists notable differences between its two locations on its website. The original Railroad Avenue spot downtown promotes beer, cider and wine. The Bellis Fair location, which opened in March 2022, books parties.
Jaren, 4, left, and Jay Ingram, 7, play the Magic Drop game at the downtown Ruckus Room location on Friday, Jan. 26.
The arcade has two locations, the other at Bellis Fair mall. (Hailey Hoffman/Cascadia Daily News)
Co-owner Emmalyn Smith said the customer types, too, differ.
“There are lots of people who don’t like the mall and won’t go there, and some that don’t go downtown for any reason and haven’t in years, and of course, plenty of people in the middle,” she said. “We get a much higher number of Canadians at the mall, and what feels like a greater number of people that live outside of Bellingham.”
None of the three business owners mentioned leaving downtown.
“Downtown is really good for business, because it’s central,” Zorganics’ Emalange said.
“I think the atmosphere downtown has been improving over the last year,” Smith said. “The Downtown Bellingham Partnership has been making a lot of effort over the past few years to improve downtown, and we have certainly appreciated it.”
“I love downtown,” Jones said. “That’s where it all started, that’s where my heart is.”
Not either/or shopping areas
All told, the differing dynamics — geographic location, shopper types and foot traffic — suggest ongoing retail coexistence despite 2023’s ups and downs.
“I think local people make an effort to go downtown because they like it and want to see it continue,” Martin said. “Downtowns are unique, too, to their city and heritage.”
People depart Ruckus Room on Railroad Avenue. (Hailey Hoffman/Cascadia Daily News)
At the same time, based on the change in occupancy, he said he believes the new mall ownership is doing “a great job.”
“The challenge that the new owner faced was overcoming the negative synergy of losing tenants. It appears that energy has turned around,” Martin said.
Bellingham Chamber’s Occhiogrosso said both shopping areas are doing something right.
Even with the well-known safety issues, he said downtown is doing “what it’s always done well. Being a place to convene humans. Having a great restaurant scene, a vibrant arts scene — none of that stuff has changed.”
And the mall? “I think Bellis Fair is succeeding in being innovative,” he said, “in not just retail.”
“I feel like both can thrive,” said Lindsey Payne Johnstone, Downtown Bellingham Partnership’s interim executive director, “because they provide different experiences.”