PROVIDENCE – A week before ground was broken for the Providence Place mall in March 1997, Vincent A. “Buddy” Cianci Jr., the mayor, declared the sprawling shopping complex would be the “brightest jewel” in the city’s crown, a symbol of urban renaissance.
The promise proved true. In the 20 years since Providence Place opened its doors, millions of people have walked through, shopping at Rhode Island’s only Apple store, catching a movie at the IMAX theater, or stopping to gaze at the luxury jewelry offered at Tiffany & Co. Those who know nothing else about Providence know about the mall.
But Providence Place, in the heart of downtown, is facing an uncertain future. The loss earlier this year of an anchor tenant, Nordstrom, plus a seismic shift in the worldwide retail landscape and the expiration of a generous property tax deal in the coming years have the mall’s new owner and city leaders discussing what the next several decades will look like for the shopping center.
For now, mall officials are bullish on Providence. In an e-mail, general manager Mark Dunbar said the mall’s owner, Brookfield Properties Retail Group, is “betting heavily by enticing new retail concepts to the market.”
“Providence Place maintains its longevity because we are constantly investing and evolving the center to remain current with the ever-changing wants and needs of our customer,” Dunbar said. “Evolution is key to staying ahead of the curve. Today’s consumer expects more than retail from their shopping mall.”
Located alongside Interstate 95 and across the street from both the State House and the train station, Providence Place remains one of the city’s most visible buildings. What was once a dirt car lot is now 1.2 million square feet of retail space with 150 stores. Its presence spurred more downtown construction, including of office buildings and high-end apartments.
But Nordstrom’s announcement that it would close was a blow to Rhode Island’s psyche.
It took a visit in the 1990s from Cianci, then-Governor Bruce Sundlun, and former Mayor Joseph Paolino to the company’s Seattle headquarters to convince the Nordstrom family to give Providence a chance.
Critics of the current governor, Gina Raimondo, and Mayor Jorge Elorza say the two Democrats should have done more to keep the company in town.
“I thought Nordstrom leaving was a severe blow to Providence and to the mall,” said Paolino, who now owns several shopping plazas. “The whole reason the mall got built was because of Nordstrom.”
Boscov’s, a Pennsylvania-based department store, is set to replace Nordstrom this fall, but Paolino fears it won’t attract the same clientele. “I won’t buy my suits there,” he said.
Rob Robledo, a senior vice president who specializes in retail for the commercial real estate firm CBRE New England, said that Providence Place being able to replace Nordstrom is a sign of its strength.
The mall, he said, is still seeing sales “well north” of $400 per square foot, which is considered average for shopping malls. Brookfield Properties declined to prove sales data.
“The demise of malls is definitely overstated,” Robledo said. He said mall owners who “change with the times” will still find success, suggesting that offering more entertainment options — like sky-diving or go-carts — is one way to attract visitors.
Still, all malls are facing the reality that online shopping continues to attract more customers. A study released last year by researchers for the consulting firm A.T. Kearney suggested the retail real estate industry is at a “crossroads,” noting that e-commerce is projected to account for a third of all sales by 2030.
One option for malls, the study noted, is to convert some of their space to commercial offices or apartments. The Globe has learned that mall officials held meetings with the leadership of Hasbro, the Pawtucket-based toy giant, about relocating some of its offices to Providence Place.
Hasbro declined to comment, and Brookfield Properties did not disclose whether the mall is considering mixed-use options.
Dunbar, the general manager at Providence Place, said the mall has tried to place entertainment concepts at the forefront of its strategy, but has also introduced nontraditional offerings, such as a cycling studio that opened in 2017.
The mall’s tax situation may be the most complicated part of its future.
As part of the deal to build Providence Place, the company’s former owner struck a 30-year deal with the city under which property tax payments would rise gradually over time. The argument in favor of the agreement was that the mall would create a vibrant economy that would be more beneficial to Providence than just higher property tax revenue.
But the arrangement — unlike tax deals the city has approved in recent years — did not carve out a way for the mall’s owners to pay a full tax bill. In 2028, the final year of the deal, the city projects the mall will pay about $1.1 million in taxes. Based on a valuation of more than $700 million, the 2029 tax bill could grow to $26 million, said Larry Mancini, the city’s finance director.
Late last year, Brookfield hired two prominent lobbyists, Jeffrey Padwa and Andrew Annaldo, to begin discussions with the city about a new tax arrangement.
Mayor Jorge Elorza’s office confirmed the city and the lobbyists “had preliminary discussions regarding their tax stabilization agreement and Providence Place Mall’s broader strategic role in downtown economic development here in Providence.”
But some aren’t sure the mall should get another tax break.
State Senator Samuel Bell, a Providence Democrat, said the agreement’s expiration will bring a much-needed “surge in revenue” for the city.
“If the mall succeeds in getting a new special tax deal, the damage to our long-term budget outlook would be brutal,” Bell said.
Dunbar noted that the end of tax treaty is still years away, but acknowledged it’s something the mall’s owners plan to work on.
“We are, however, proactive when determining the future of our shopping centers and the cities where we operate,” he said.