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

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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