Changes in store for Shops at Liberty Place

Stores started going dark after Christmas, but general manager Karen Pollard knew it was coming. She had been hired, after all, in anticipation of the changes ahead for retail inside Philadelphia's second-tallest skyscraper.

As January 2010 brought the 20th anniversary of the Shops at Liberty Place, a batch of simultaneous lease expirations has placed 13 stores in play at the two-story shopping atrium and food court in the heart of Center City.

The lease expirations have come at once, Pollard explained, because many were built on increments of five, 10, or 15 years since the place opened in 1990. Some deals for new tenants have been struck; others are in negotiations; still other spaces remain wide open to what the future may bring.

Pollard said she was trying to recraft the hallmark hub, and she was using the lease expirations as an opportunity to make some drastic changes.

In a few cases, national retailers such as Borders Express and cosmetics chain Douglas opted against renewing because of companywide pullbacks. Borders Express is set to close a week from now, while Douglas, right below it on the first floor, already is gone.

In some cases, Pollard said, tenants were asked not to renew, or the two parties mutually agreed to part ways.

"I believe this place needs an energy boost," said Pollard, a retail-leasing pro from Connecticut whose binder full of Liberty Place tenant proposals reflects the irrepressible enthusiasm she has brought to a daunting job during a tough economy.

"She's reaching out to everybody that she can," said Center City real estate broker Larry Steinberg, principal of Michael Salove Co., who recently took a tour of the space with the new general manager.

Pollard's goal is to strike a new tenant mix. That's easier to accomplish by knocking down walls between vacant stores and assembling more attractive parcels to expand the pool of prospective national retailers in search of larger stores.

But finding tenants will no doubt be a tall order. The 148,000-square-foot space at the base of 60-story-high One Liberty Place competes with street-side landlords, Steinberg said. Plus, consumer appetites have been curbed by high unemployment.

Indeed, the Shops are undergoing a visibly awkward transition. In recent weeks, there has been a surge of suddenly empty storefronts.

"There's going to be a period where it gets worse before it gets better," Pollard noted. "But that's the nature of the business."

It has raised eyebrows among patrons unaware that Pollard is working deals that could lead to new stores by springtime.

"There's not too much here," said Connie Stinsman, 39, a billing associate who used her lunch break yesterday to scoop up a bag of gifts from Bath and Body Works. "It makes it look less appealing."

The loss of tenants has been tough on merchants in the building's food court, long its daily customer magnet, said Gary Dorfman, owner of Jake's Philadelphia Cheesesteaks.

"Business has been slower this month as stores have closed," said Dorfman, 43. "I want to see every store rented."

The Shops opened to much fanfare after One Liberty became the first skyscraper to break the unofficial ban on buildings taller than City Hall.

But apart from the food court, it has been unable to define itself beyond the lunch-break crowd. Its biggest retail space has been mostly vacant for years after the Warner Bros. store walked away.

That 12,500-square-foot anchor could be doubled in size if Pollard's plan to join it with two adjacent stores goes through. It has piqued the interest of several companies, she said.

On Feb. 1, Drexel Medicine is opening a medical center - the Drexel Convenient Care Center - at the site of a former cell-phone store. Negotiations are ongoing for several other spaces, including a brewpub, Pollard said.

The Shops have struggled, in part, because only a few retailers, such as J. Crew, have street-level windows on Chestnut Street.

"She has her work cut out for her," said Steinberg.