New Era for Shopping Malls

Regency Square Mall in Jacksonville, Florida.

Repurposing Malls – The enclosed shopping mall is an American institution…

…that has spread to cities around the world. It was, according to biographer Jeff Hardwick (Mall Maker), created by the Vienna-born architect, Victor Gruen, who envisaged it in 1952 as the multi-use community center (malls) for the sprawling suburbs of American cities.

Gruen designed the first enclosed mall for the center of a 500-acre tract at Edina, Minnesota with the idea of residential development surrounding it, relying on the mall as its community gathering place. But, despite his acknowledged fame as one of America’s great architects, Gruen never envisaged the parking requirements for the thousands of cars attracted to the mall from eager shoppers for miles around. His 500 acre site was covered with asphalt on all sides of the new structure, an automobile need repeated in his subsequent designs for shopping malls in cities throughout the United States and abroad.

Outdoor shopping centers had their birth during the population expansion of the 1920s in California where supermarkets provided the anchor and magnet for a strip of smaller stores reliant upon a large paved parking area adjacent to the retail stores. Early examples included the Country Club Plaza in suburban Kansas City in 1922 and the Highland Park Shopping Village in Dallas, 1931, the first center to have its own parking lot with stores facing away from the access road. The first enclosed mall, designed by Gruen for the Minneapolis suburb in 1956 was hailed as protecting shoppers from the bad weather, crime and urban troubles. Four decades later, this same city became home to the country’s largest mall, “The Mall of America“.

The rapid growth of suburban shopping centers followed by enclosed malls followed the migration of residents outward from cities along with the rising popularity of the automobile. By 1960, the country included 4,500 malls, accounting for 14 percent of retail sales. By 1975, 6,400 suburban shopping centers of all kinds generated 33 percent of national retail sales. And, by 1988, the nation reached the zenith of 30,000 shopping malls accounting for over 50 percent of all retail expenditures, 8 percent of the labor force and 13 percent of the gross national product. The largest mall in the world (at the time of its completion), the West Edmonton Mall, was erected in Alberta, Canada with over 800 stores, an ice skating rink and 24 movie screens. The year 1990 witnessed 19 new covered malls, but the last one was developed in 2006 on the edge of I-75 in Sarasota, Florida.

The popularity of suburban malls gave rise to erecting them as the center pieces for the rejuvenation of urban centers: City-Center in Indianapolis, Faneuil Hall in Boston, South Street Seaport in New York City, and Harbor Place in Baltimore are primary examples. The huge Water Tower Place in Chicago includes hotels, restaurants and residential dwellings.

However, the competitive environment confronting malls in recent years has been substantially different than their early popularity in outpacing the downtown business district as their primary competition. Today’s competition is usually another mall, free-standing big box stores or the development of open-air centers favoring automobile traffic parking close to all of the stores. St. Johns Town Center right here in our hometown of Jacksonville, Florida is a prime example.  Walking grew out of fashion for the hurried pace of modern suburbanites.

In the 2012 book Retrofitting Suburbia, author Dunham-Jones reported that 40 malls nationwide have been targeted for re-development, and 29 “re-purposed” (Ellen Dunham-Jones has an awesome TED Talk you should watch). In 2010, the city of Columbus, Ohio demolished its downtown mall and replaced it with a park; Voorhees, New Jersey, tore down half of its dead mall and relocated city hall in the remainder; the dying mall in Lakewood was converted into a 100-acre open-air super block with retail and residential uses within walking distance of each other. The Westfield San Francisco Centre has been revised to accommodate “Bespoke”, a 31,000 square foot co-working event and demonstration space which targets companies that otherwise might not be able to afford San Francisco rental rates, by providing them a unique environment in which to manage, promote and market their businesses. A spokesman claims that the successful “Bespoke format” will be replicated in other Westfield malls around the world, beginning in London and Milan.

Concurrently, a Redmond, Oregon mall owned by Simon Investments inserted the “Microsoft Retail Experience Center” demonstrating new products like beacon technologies, advanced vending machines, a futuristic dressing room, and more. Simon and other publicly-held fund managers are looking to wealthy investors to bolster malls with unique restaurants and attractions that become destinations for diverse interests beyond shopping. “This blending of experiences has created an opportunity for retail to strengthen social ties within communities looking for communal experiences” (Nielsen’s 2013 Report).

Parker Associates recently was given the opportunity to re-position a declining mall in Florida which had just lost one of its four department store anchors. The mall owner had been considering attracting a hotel to fill the empty gap in its building. After compiling market research in the surrounding area, the Parker team proposed the development of a mid-rise condominium development positioned to Empty Nester Couples who would relate to the restaurants, fitness center, computer center, entertainment experience and other facilities available via a short walk (or electric cart) under cover; in essence a return to Victor Gruen’s original dream of providing a diverse community center as the focus of both necessary and optional goods and services. Upon input from a local developer, smaller condominiums were included to attract corporate purchasers for short-term fully furnished rental leases. Their employee needs turned out to be remarkably close to those of the Empty Nesters.

In sum, it appears that Victor Gruen had a sound idea after all. He just could not extend his vision far enough in the future to define all of the future variables affecting his dream. Now, we have ample evidence to re-position these huge buildings to profitable uses for their current market areas. It remains to be seen how accurately we can plan for decades ahead.

Dr. David Forster Parker
January, 2016
For more information, contact Dr. David F. Parker
or go to our web site at www.parkerassociates.com.

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