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Macy's & Bayfair Mall In High-Stakes Lease Talks

Macy's has anchored the Mall since 1957 so the outcome could have a big effect on San Leandro.

 

For more than 50 years Macy's has been a fixture in San Leandro as the original anchor store of Bayfair Center.

Macy's lease expires in July. The retail chain and the owner of Bayfair are holding negotiations that could have a big impact on San Leandro.

City officials have no role in the talks but they have a stake in the outcome.

Sales tax revenues are a linchpin of the city budget and any weakeness in the Mall would hurt the city in dollar terms and undermine San Leandro as a shopping destination.

"I believe (the lease) has been extended for the time being as they continue to negotiate," said city community development director Luke Sims. "There is no indication that the store is closing any time in the foreseeable future."

Whitney Livingston, spokeswoman for Bayfair owner Madison Marquette, offered an upbeat comment.

"We are happy to report that we are currently working on this renewal," Livingston told Patch, promising details once the deal is finalized.

Macy's spokesman Jim Sluzewski was succint. "We continue to operate the store under our lease," he said. "It's business as usual. Not much else to say."

Macy's goes way back in San Leandro

When Bayfair first opened in 1957 it was a joint development of Macy's California and The Capital Company, according to BIGMallrat, a blog devoted to Northern California mall happenings and history.

The Mall Hall of Fame, another blog on the topic, said the Bayfair store "was the chain's third suburban shopping center branch," which suggests that it was an important part of Macy's strategy at the time.

But times have changed.

Bayfair has been transformed in the intervening decades, including the opening of the Century Theatre complex in 2001, the acquisition by Madison Marquette in 2003 and the subsequent additions of Bed, Bath & Beyond, Kohl's, Old Navy and Staples.

Macy's also faces a new competitive landscape including Internet retailers that didn't exist 20 years ago, much less in 1957 when it opened the San Leandro store.

To keep up with the times Macy's continues "to close stores that no longer meet our performance requirements, as well as to open stores where we see opportunity," as company CEO Terry J. Lundgren said in announcing some of those decisions in January.

The city connection

In February Patch reported on that had been part of the financial underpinnings of the Mall since the 1990s, when it looked like Macy's might pull out of Bayfair.

That lawsuit continues to crawl through the courts. The funding mechanism that the city had once used to subsidize the Mall no longer exists.

It is against this backdrop that the current lease negotiations take place.

For now, San Leandrans will just have to wait for the closed-door talks to conclude before we learn about the future of the Macy's at Bayfair.

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Larry Smith July 06, 2012 at 01:47 PM
It would be a tragedy for San Leandrans to lose Macy's, both from a shopping convenience point and from a tax receipt point.
Chris Crow July 06, 2012 at 05:16 PM
There is the one paid subsidy of $250,000 per year to the Mall that is/was paid out of the RDA, but the King lawsuit is regarding a contract default obligation in which the city has to pay the owners of the land close $1,000,000/year. The $250k is separate from the lawsuit and I believe is paid direct to MadisonMarquette, but the amount is still in jeopardy. In total, the City of San Leandro is obligated to the Mall's viability to the tune of about $1.2million per year. What amount of sales tax generation makes that obligation reasonable? Certainly a question to be debated. We don't pay money to Wal-Mart or Costco, and they are the largest individual sales tax contributors in the city. (shrug)
Barry Kane July 06, 2012 at 05:39 PM
Many San Leandrans do not shop at that Macy's. Merchandise selection is terrible and the atmosphere is unpleasant. Stoneridge Mall or Union Square are easy car or BART rides away and much better options for department store and boutique type mall stores. I would re-purpose the entire mall section of the center into a big box center and include Lowe's and other regional draws/ lifestyle stores. Target has shown that a regional draw can happen in that location.
tony santos July 06, 2012 at 07:18 PM
Thanks to Patch for this update-I have been making inquiries to determine status on negotiations with Macy's; it lease did expire on July 1, I believe. I don't believe Macy will leave as store has been extremely profitable over the years. One of these days, Crow will study SL history and then he might learn something about his City-reason I am not votiing for him. We need better, and deserve better.
Carol Parker July 06, 2012 at 07:18 PM
Barry, are you thinking of something like the outlet stores near the Nut Tree on the way to Sacramento? It's an interesting concept. I remember when we had Capwell's on Foothill in Hayward, Daughtery's in Castro Valley and the original Mervyn's in San Lorenzo. Macy's seems to be the last large department store in the immediate area that is not a big box type store that remains..
David July 06, 2012 at 07:29 PM
That day might come about the same time you have an epiphany as to why you lost the election, Tony.
Thomas Clarke July 06, 2012 at 11:56 PM
Get ready to say good bye to Macy's. The city and community have done little except steal the store blind. Sales are not strong and have not been for a long time. The shortage is awful and unless the city and the mall pony up some real cash incentives Macy's is bye bye.
Michelle Lang July 06, 2012 at 11:57 PM
I shop all the time and Macy's ,I love Macy's, and each and every time I shop there I find something and am so grateful I don't have to go to Southland, or Stoneridge (unless I really want to). I am so happy that we here in San Leandro have a Macy's which I prefer much over Kohls. I hope the negotiations are mutually acceptable and Macy's stays ... please no more Wal-Mart / Target / Costco s!
Michelle Lang July 06, 2012 at 11:58 PM
my thoughts exactly!
Michelle Lang July 07, 2012 at 12:00 AM
Hi Barry, I am curious how you have tallied your stats on who shops Macy's, I shop there all the time and have a great experience and I get the best deals, it's amazing.
Ken Briggs July 07, 2012 at 12:30 AM
so whats to stop Macy,s from moving to another place and have their own building and parking lot. . just look at the newst walmart , they have there own building and paeking lot . so treat them well or they just may move south or say the hell with San Leandro . get rid of the gangs that hang around Bayfare mall .
Barry Kane July 07, 2012 at 01:25 AM
Michelle, I just know my neighbors and co-workers who live here do not go to that Macy's, even though we all shop the big boxes at Bay Fair. I find it incredible and amazing you think the Bay Fair Macy's is worth a trip compared to nearly any other Macy's in the Bay Area, including Union Square or Stoneridge. I have shopped there on rare occasions when I am hopeful and each time I vow not to return due to poor selection of merchandise. I love Macy's, just not the Bay Fair store.
Sarah Nash July 07, 2012 at 02:03 AM
I agree that Macys is definitely not a draw to Bayfair for me. Who wants to shop for locked-up merchandise (or no merchandise)? From my point of view, Target and the farmers' market are the real anchors.
Ken Briggs July 07, 2012 at 02:22 AM
oh yes , I shop at Target , for the prices are right . It,s been over 4o years since I bought anything at Macy,s the last time was in San Jose / Santa Claira shopping center .
Mike July 07, 2012 at 03:31 AM
Barry since life in San Leandro is so horrible and scary you might want to move.
Barry Kane July 07, 2012 at 03:55 AM
Hmm, I think others said that in their comments Mike, not me. Reality is, it is not a fun or very interesting city, but it is convenient to other Bay Area places, which is where I spend my time...working, playing, dining and shopping. I Iike my neighborhood as a place to live and I like being between the Tri-Valley and SF above 580 with easy freeway and BART access. I would like the city itself to be better and not so gritty and dull with more amenities and better places to shop and eat, but I guess you are saying that is not possible?
David July 07, 2012 at 04:07 AM
Mike, don't you live in alameda?
Mike July 07, 2012 at 04:54 AM
I live in San Leandro
Been Taken July 07, 2012 at 05:16 AM
Macy's should move to a vibrant mall.
Been Taken July 07, 2012 at 05:22 AM
Macy's should relocate to a respected mall/location. Compare Simon malls to this mall; and you will experience high level retailers; but at Bayfair the retailers are sub standard attracting the same customers. Madison Marquette operates sub standard operations; attracting the same. Doing business is at your own risk with M.M. and G.C. JM. Ask the King Trust.
Paul Vargas July 07, 2012 at 06:19 AM
Let them go. Someone else will move in there. People moaned and groaned when Montgomery Ward went bankrupt and what happened?....Target moved in there. Actually we need the City and all their boneheads in City Hall to stay out of BayFair's business. That mall could have been revamped years ago, but for the nosy bodies who stick their nose where it doesn't belong.
Tom Abate (Editor) July 08, 2012 at 04:22 AM
I am at Bayfair all the time, as a shopper and I think it's completely unfair to malign it under Madison Marquette ownership. If I'm not mistaken Target, Kohls, Bed B&B and Staples have all come in since its ownership. I use all of those stores and I am not a very big consumer (I also like to shop at Marina Square). But I will be honest: I can't recall ever having shopped at the Bayfair Macy's. But then I am not a Macy's shopper, unlike Michelle (above). Tony Santos knows from the past that this Macy's was very profitable. But is that still the case? After I wrote that story I drove south a little on 800 and saw the Macy's at Southland. If we drive east I am pretty sure there is a Macy's in the posh mall in Pleasanton. Does San Leandro still make sense? We'll see.
Carol Parker July 08, 2012 at 11:16 AM
Good question, Tom. I forgot about there being a Macy's at Southland. I wonder how that store is doing as well?
David July 08, 2012 at 03:11 PM
Retail in general is overbuilt, with square footage of retail space in the USA increasing from about 30 sq ft per capita in 2000 to 46.5 sq ft per capita now, twice as much as the UK and nearly 3 times as much as Canada (and while those countries' per capita income is much lower, the $ of sold "stuff" per square foot is still higher). With employment costs rising, thanks to the "affordable care act" (Obamacare, which provides neither affordability nor care), increasing regulations (state greenhouse gas, etc so we can feel virtuous about doing absolutely nothing about an imagined problem, and killing jobs at the same time), increasing taxes (see: Obamacare, Jerry Brown's tax fetish, etc), marginal locations will continue to close, leaving retail spaces that cater to the wealthy to maintain $$/sq ft sales that cover higher costs, and really far-flung exurban locations where land is still cheap. The rest of us will shop more on the internet, where state "greenhouse gas" regs etc don't apply. We're in for a decade or more of retail contraction and so contingency planning for alternative uses of abandoned retail parcels needs to be addressed. Or we could always stop making it harder to do business. Nah, that'll never work. Thanks Libs!
Gloria Amaral July 08, 2012 at 04:33 PM
I agree that Macy's should stay. However, as a longtime Macy's shopper, I appeal to Macy's to bring up it's inventory to be more equal with it's Stoneridge Mall location. Many times I've had to drive to Pleasanton because I felt the BF Macy's location inventory was lacking. Frankly, it's rare I can find anything that suits me at this location. I understand that maybe the "demographics" may play a big role in why the inventory is not up to snuff (and all that that entails). But I'm a big believer of "build it and they will come" philosophy - naive? Maybe.

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