Almost a half-century after opening, Water Tower Place, the once-bustling retail mall at the north end of Chicago's Magnificent Mile, remains shiny marble on the outside, but inside it's losing some of its sparkle.
Macy's, which anchors the south end of the building, recently announced plans to close in a few months, leaving behind a more than 300,000-square-foot hole.
In June, restaurant group Lettuce Entertain You closed Foodlife, credited by some as Chicago's first food hall, and Mity Nice Bar & Grill. Both had been there for 27 years. Another Water Tower retailer, Gap, which has been closed since the early days of the pandemic, announced it would not reopen.
Elsewhere on Michigan Avenue, there are store-closing signs at Gap, which is expected to close its flagship this month, and at Express, which an employee said will close in February. Former Apple, Dylan's Candy Bar, Na Hoku and Roots stores are vacant.
How effectively Water Tower Place can fill its empty spaces — amid a pandemic that has devastated the retail industry and accelerated changes in how people shop, as well as looting incidents that have tested the city — will help determine the health of Chicago's premier commercial street.
Macy's space, which spans all eight floors of the vertical mall as well as a mezzanine level, is available for the first time since the mall opened more than 45 years ago.
"This will be the largest retail space currently on the market in Chicago, and certainly the largest availability on N. Michigan Avenue in at least a generation," said retail broker Greg Kirsch, the Midwest retail leader at Cushman & Wakefield. "And it comes at a tough time."
Finding a replacement for a store of Macy's size will be especially difficult during the pandemic, when few retailers are looking to expand. It gives owner Brookfield Properties the opportunity to bring in new retailers and reconfigure the mall, experts said — if it can line up new tenants during a shaky economy.
In a statement, Brookfield acknowledged big changes maybe coming to the property but said it will need the city's help.
"Macy's departure from Water Tower Place presents us with an opportunity to repurpose a significant amount of square footage with a rebalanced mix of retail, dining, entertainment, grocery, fitness, medical and office space," said Chris Pine, executive vice president of anchor and box leasing a at Brookfield Properties.
"To fulfill this opportunity and deliver a new vision for Water Tower Place, we will need significant support and collaboration from our partners at the mayor's office, alderman's office, tax assessor's office, the Mag Mile Association and the local community," Pine said.
Brookfield could add millions of dollars per year in rental income by replacing Macy's with a series of smaller, high-rent shops. Macy's first-floor space alone could be worth more than the entire eight-story flagship currently brings in, Kirsch said.
The big vacancy also brings a potential chance to reconfigure the mall's entrance, which includes stairs and cascading water fountains, he said.
"COVID inspires grand plans," Kirsch said. "It's a bad time now, but ultimately N. Michigan Avenue remains relevant and spaces will fill."
Each floor at Water Tower Place had just a handful of shoppers walking around late on a recent Wednesday morning and at many stores, employees outnumbered customers. A usually bustling Starbucks on the second floor has closed. Abercrombie & Fitch has yet to reopen and in a handful of other vacant storefronts, displays advertised other shops in the mall.
Pent-up demand for travel, shopping and experiences, along with a broad economic recovery, could jump-start a reinvention of N. Michigan Avenue, but experts said it will take time.
The avenue faces the most substantial re-leasing effort in its history, Stone said.
"That's not something you can snap your fingers and make happen," he said.
