Maine lawmaker sees malls as the solution to the housing shortage

Article appearing in the Bangor Daily News

by Lori Valigra

When Cyrus Butler built the country’s first enclosed shopping mall in 1828, its large foyer and distance from other retail shops in Rhode Island’s capital of Providence quickly earned it the nickname “Butler’s Folly.”

For a long time, it was an apt moniker. But the mall’s business fizzled out over nearly two centuries. Developer Evan Granoff purchased it in 2005, closed it three years later and then repurposed it into 48 micro-lofts and 22 first-floor retail spaces that got snapped up in the tight real estate market.

Should old malls be repurposed for housing?

“It could not have worked out better,” said Lisa Marrocco, director of operations at Granoff Associates. “He’s the first person to actually make money on it in 200 years.”

That’s the type of success Rep. Dick Campbell, R-Orrington, would like to see happen in Maine. He has introduced a bill in the Legislature to repurpose vacant shopping mall and retail space into mixed-use housing and retail. Campbell originally envisioned converting empty big box stores in malls but broadened his scope given Maine’s dire need for housing.

Campbell is not responding to any proposed housing project in Maine, and his bill is a so-called concept draft carrying only a goal and no language. He will leave the crafting of the measure to a new housing committee formed by Democratic legislative leaders.

In this Nov. 11, 2020, file photo, state Rep. Dick Campbell, R-Orrington, tosses a wreath into the Penobscot River during a Veterans Day ceremony on the Chamberlain Bridge in Brewer. Credit: Linda Coan O’Kresik / BDN

“It’s time to think differently,” he said. “We have to allow and encourage residential zones.”

Repurposing malls for housing has been a growing trend throughout the country. Some 315 converted spaces were already completed or were in progress in 2020, according to The New York Times.

Malls have been in a period of decline due to online shopping, struggles by the department stores that once anchored them and the COVID-19 pandemic. There are roughly 700 left in the United States now, and one expert told The Wall Street Journal last year the number could be 150 in a decade.

Store closures are prompting these conversations. Some 1,221 stores have already closed in the U.S. this year, according to Coresight Research. That is on a similar pace to match or top the 15,500 that closed in 2022. 

At the same time, there is a nationwide housing shortage and affordability crisis. Maine alone was short about 9,000 housing units as of 2019, mostly in the Portland area, according to a study by Up for Growth. Those numbers do not reflect pandemic-era migration to the state.

A 225-square-foot micro-loft (left) and first-floor retail space (right) are seen in The Arcade Providence, a converted indoor mall in Rhode Island. Credit: Courtesy of Granoff Associates

The Arcade Providence is one model showing mall transformations can work. Granoff got the idea for the micro-sized living spaces from his love of boats and wanting to make good use of available space rather than having a wasted foyer, Marrocco said.

The units were rentals for the first five years and then the property was turned into condominiums, with Granoff’s company selling off the converted mall to occupants. Prices for the residential units ran from $150,000 to more than $215,000, with most units running about 250 square feet.

At the time of the sale, the initial apartment rental fee of $800 per month had risen to $2,000, with full occupancy since the converted mall reopened in 2013, Marrocco said.

The units sold “fast and furious” when they went on the market, said Cheryl Andreozzi, an agent with Mott & Chace Sotheby’s International who was brought in to handle the sales. 

Renters were first offered the opportunity to buy them before they went onto the open market. One of the units that recently was listed for $199,000 was originally purchased for $130,000, she said.

Andreozzi said a mix of people now live in the former mall, from retirees to younger people who moved into the city for jobs. Like many areas of the country, housing has been hard to get and expensive. The 48 units in the mall helped, as did retail and food on the first floor, she said.

“It was an amazing opportunity to add housing,” Andreozzi said. “Providence is short on downtown living accommodations. This really helped scratch that itch.”


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