Westfield Montgomery Owners Planning To Invest ‘Hundreds of Millions’ in Renovation

Phased construction at Bethesda center could take a decade to complete

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To stay afloat in a changing market, mall owners must evolve, exactly what the owners of Westfield Montgomery mall intend to do with a redevelopment and expansion project that is expected to cost “hundreds of millions of dollars,” its owners said Wednesday.

Unibail-Rodamco-Westfield, the shopping center’s Paris-based owner, has filed preliminary plans with the county’s Planning Board that show hundreds of apartments, high-end dining and shopping, a hotel and outdoor recreation areas.

Jim Agliata, Westfield’s vice president of development, did not disclose the project’s overall cost, but said the redevelopment represents the next phase of Westfield’s emergence as a “lifestyle destination.”

Proposed to be completed in four phases spanning about a decade, Agliata said the redevelopment will allow Westfield to remain among the nation’s “upper-tier malls” that are thriving while traditional mall models are struggling.

The first phase could be completed as early as 2022 and the project is expected to be funded through “corporate-level financing,” Agliata said.

“I’ve been in the mall business for 30 years and I’ve never seen so many changes in my life, but the malls you see surviving are the ones that are able to reinvent themselves and provide leisure, entertainment and amenities you don’t see in those locations that are closing,” Agliata said.

Analysts say the transformation trend is critical at a time when some older malls are closing.

“The trends helping to create this change include changing demographics, such as an aging population and increased urbanization, which means more people living in smaller spaces and a greater need for public spaces in which to socialize and congregate. In this environment, malls offer a welcome watering hole, especially in cities where other public spaces are not safe,” according to a report from the consulting firm McKinsey & Co. “Sustainability concerns are causing some consumers to prefer mixed use developments where they can live, shop and work all within walking distance – instead of having to get into a car and drive to a crowded suburban mall.”

In recent years, the mall’s owners have opened the ArcLight Cinemas, improved the food court and introduced Lucky Strike gastropub and bowling alley to the Bethesda center. After a $90 million expansion completed in 2014, the mall’s food court was renovated into a dining terrace.

The proposed development at Westfield would make room for a 12-story, 261-room hotel, hundreds of apartment units, a “country club-style” fitness center and green space. Additionally, Agliata said he believes more upscale restaurants and retailers that historically have had only an online presence will move into the redeveloped space, though he did not name specific potential tenants.

Regardless of who fills the predominantly outward facing stores, residents and shoppers will be enveloped in a “sense of place,” Agliata said.

“Instead of having a typical mall where there’s four department stores inside, people and tenants want things like restaurants with seating outside to enjoy the atmosphere and ambiance of the facility, places to live and exercise, relax and mingle,” Agliata said.

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