Lakeside Mall to close July 1, paving way for $1 billion redevelopment
- Lakeside Mall in Sterling Heights will close July 1 as a $1 billion redevelopment plan kicks into gear
- The mall was a longtime economic engine in Macomb County, opening 48 years ago
- No longer valuable as a mall, its well-located 110-acre home will become a mixed-use city center
One of Michigan’s largest and best-known shopping centers will close July 1, as the owners of Lakeside Mall in Sterling Heights move forward on a $1 billion redevelopment.
Out of The Box Ventures, a subsidiary of Miami-based Lionheart Capital, on Wednesday said remaining mall tenants recently were informed of the decision.
Next up: demolition of most of the 48-year-old mall and construction of a multi-use, city-center development that will take years to complete.
"Lakeside Mall's closure marks the beginning of an exciting transformation," Allison Greenfield, principal and chief development officer of Lionheart, said Wednesday in a statement.
"We are committed to collaborating with the City of Sterling Heights to create a vibrant urban center that celebrates the area's unique character and history."
Related:
Lakeside Mall’s proposed rebirth
The $1 billion plan to remake the mall will take up to 20 years to complete. Initial plans call for:
- 2,803 apartments, including for seniors
- About 150,000 square feet of retail space
- Covered, heated pedestrian shopping
- ‘Main Street’ style sidewalks
- Macy’s and JC Penney facelifts
- Hotel with 120 rooms and a parking deck
- About 60,000 square feet of office space
- Restaurants
- Parking on street and in a parking deck
- Recreational amenities like open space and trail connections.
Source: State of Michigan legislative earmark description
Instead of a massive enclosed mall surrounded by parking, Lakeside’s 110 acres will include residences, parks, a hotel, office spaces, dining and about a 90% reduction in store space. Streets will crisscross the property, encouraging residents to engage with events and businesses there, Greenfield said.
About 30 acres will be dedicated to public spaces, including parks and infrastructure, Greenfield added.
The closure is the latest step in a process started a decade ago when Sterling Heights officials recognized that the mall — once among the city’s top employers and taxpayers — was caught in the retail decline spurred by the Great Recession and uptick in online shopping.
At the same time, owners of the mall were “underwater” on Lakeside’s debt, curtailing any investment to reinvigorate the property. They defaulted on a $144 million loan in 2016, and Lionheart bought it for $26 million in 2019.
Sterling Heights officials studied options for the property, located at the center of Macomb County’s bustling M-59 corridor. The city’s goal was to restore value to the community, eventually settling on the initial vision, supported by Out of The Box Ventures, for the $1 billion remaking of the property.
The move to transform the Lakeside property comes as hundreds of malls have closed nationwide in the past 10 years. Some projections say that as many as 1 in 4 malls could close in the next few years.
Even so, there is a mall resurgence at some properties, especially those with higher-end stores and tenants that do more than sell apparel, according to a recent report from Placer.ai, a retail analytics company.
Sterling Heights and developers say Lakeside is too far gone to be reborn as a traditional mall, having lost anchor stores and even mall stalwarts like Cinnabon.
This spring, 54 stores remained in a mall that once had 180.
As the Lakeside closure approaches this summer, Out of The Box still expects to acquire two closed anchor stores with the aid of a $3 million state grant approved by Gov. Gretchen Whitmer last July. Macy’s and JC Penney have authorized the company to pursue the plans around their stores.
Additional public money could come from a city-issued bond. A Corridor Improvement Authority was established in summer 2023, allowing municipal tax increases from value bumps to fund about $71 million of utility lines, roads and sidewalks within the district.
Lakeside also will qualify for the state’s Transformational Brownfield Plans incentive funding, after the Legislature approved changes in 2023.
Site plans for a first phase of construction are expected to soon follow demolition.
City officials have voted to approve the Corridor Improvement Authority and to accept the $3 million from the state, but did so on split votes.
However, officials still express confidence the project will proceed.
The redeveloped property can “be a model for strategic redevelopment and job creation,” Macomb County Executive Mark Hackel said in a statement.
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