Is Water Tower Leaking?

A report out of Chicago says that several merchants at Water Tower Place — the city's oldest vertical mall, at the northern end of Michigan Avenue — fear the mall is losing its luster. And at least three — Louis Vuitton, Dunhill and North Beach Leather — either want to terminate their leases or are planning to leave.

“I've heard people from out of state say that Water Tower's beginning to look just like any other mall,” Gail Goldfarb, manager of Isis, a locally owned women's clothing store at Water Tower, told Crain's Chicago Business. “Our merchandise is different. But we won't make it if we're the only one. We need more unique stores here.”

Crain's reports that although mall management says Water Tower's sales have held steady in recent years at about $500 per square foot, retail competition has intensified on Michigan Avenue and surrounding streets. Water Tower is wrapping up a $15-million face-lift that came partly in response to competition from the Nordstrom-anchored Shops at North Bridge mall, which opened several blocks south in fall 2000.

“Given the tremendous growth of street retailing on Michigan Avenue, I think Water Tower was falling behind by sitting still,” a local retail consultant told Crain's.

When it opened in 1975, Water Tower had an abundance of upscale specialty stores, but many have since left, to be replaced by national retail chains like The Gap Inc. and The Limited Inc.