A major facelift is in store for the former Macy’s location at Fiesta Mall in Mesa.
Jackson Commercial Real Estate and Verde Investments, both based in the Valley, are planning to pour about $21 million into stripping the old Macy’s store down to its bare bones and rebuild it into a corporate office campus.
At a press conference Thursday morning, Jackson Commercial’s Scott Jackson said it’ll take a few years to complete, but it could bring as many as 1,300 jobs to the area.
“It’s going to take a lot of work to get it up to speed to where it’s competitive with the new building product that’s being developed around town today,” Jackson said.
Fiesta Mall was built nearly 30 years ago at the southwest corner of Alma School Road and Southern Avenue.
City officials said this alleviates some concerns they’ve had about the mall and surrounding area, which has been deteriorating for years.
The southeast Valley is highly retail-saturated and Fiesta Mall began suffering when other malls such as Tempe Marketplace and Mesa Riverview opened nearby almost a decade ago. Then the Great Recession hit and online shopping proliferated, which caused brick-and-mortar retailers and shopping malls to struggle and shutter nationwide, especially in and around Fiesta Mall.
“The challenge of aging malls and big box retails in the era of Internet retail is a nationwide issue,” said Mayor John Giles. “And I’m proud that Mesa is leading the way in going back and addressing as a community, ‘What can we do given the economic environment that we are all in now to address that problem?’”
Mesa has recently poured millions of dollars into streetscape improvements and a new police station within the Fiesta Mall area. City Manager Chris Brady said shifting away from retail at the old Macy’s store could be another milestone for the area.
“This has good bones,” Brady said. “It was the center of the retail universe not that long ago. And now the world has moved from retail to office space.”
The 158,000-square-foot store is connected to the mall, but are under separate ownership.
Jackson said they’re purchasing the store from Macy’s for $2.75 million.
The mall itself has been lender owned since the fall of 2013, when its former owner Macerich Co. handed it back in lieu of foreclosure. Macy’s closed several months later, although it had nothing to do with the ownership change of the mall since the company owned the building outright. Its Fiesta Mall store was one of five the department store chain shut down nationwide in a cost-cutting move.
When Jackson’s office transformation at the store is complete, and if no changes take place at the rest of the mall, the difference between the two will be noticeably drastic.
Vice Mayor Dennis Kavanaugh said he’s optimistic this will be positive for the mall as well.
“They’re proposing here really I think will be a tremendous catalyst for hopefully the rest of the mall property,” Kavanaugh said.
Renovations are expected to begin later this year and wrap up within two or three years. But Jackson said that’s a conservative estimate.
It’ll really depend on how long it takes to find tenants.
