The Afterlife of Malls

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The Afterlife of Malls The Afterlife of Malls John Drain INTRODUCTION teenage embarrassments and rejection, along with fonder It seems like it was yesterday: Grandpa imagined the search memories – from visiting Mall Santa to getting fitted for my for some new music would distract him from an illness prom tux. that was reaching its terminal stage. This meant a trip to the Rolling Acres Mall at Akron’s western fringe; probably Some spectators interpret the decline of malls as a signal the destination was a Sam Goody, which in 1996 was as that auto-oriented suburban sprawl is finally unwinding. synonymous with record store as iTunes is with music today. Iconoclasts might attribute their abrupt collapse to a Grandpa bought a couple tapes and then happily strolled conspiracy of “planned obsolescence,” or even declare this the mall concourse. But his relief quickly faded; he slowed a symptom of a decadent society. Some will fault today’s his clip and sidled into a composite bench-planter on a politics or the Great Recession (anachronistically, in most carpeted oasis, confessing, “I am so tired.” cases). Some attribute the decline to a compromised sense of safety among crowds of people who aren’t exposed Grandpa and his cohort – the rubber workers – have mostly to an intensive security screening (certainly the violent vanished from Akron. The Rolling Acres Mall is abandoned. incidents in Ward Parkway Mall in Kansas City2 or the City The so-called “shadow retail” that gradually built up around Center in Columbus3 lend some credence to this view that the mall is today the shadow of a ghost. violence has played a role). Others attribute the decline of certain malls to shifting consumer preferences for lifestyle centers or bigger super-regional malls. Some blame their THE “DECLINE” OF THE MALL inconvenience, overbuilding, consolidations of anchors, Rolling Acres Mall, like so many other malls, were built – systemic mismanagement, or some combination of these invented – by and for people like my grandpa, a veteran market factors. who ascended into the middle class by working his way up the organizational ladder at B.F. Goodrich, one of Akron’s There are many explanations for why particular malls former rubber institutions. decline, yet many malls are still very much alive, or at least stable for the time being. For example, Twelve Oaks Mall in The trajectory of the Rolling Acres Mall is not unusual. Malls Novi, MI could have passed for Rolling Acres Mall’s identical just like it have closed all over the country. The obvious twin at its outset in the 1970s. Yet it remains a positively conclusion is that there is an “epidemic” among malls uplifting and opulent venue that’s full of shoppers at any today (malls being frequently likened to an organism or given moment. There is still a robust investor appetite an ecological monoculture). There are hundreds of news for large-scale retail environments. A glance at the stock articles heralding the supposed death of the entire indoor prices of some of the Real Estate Investment Trusts (REITs) mall concept. In a poll of the vox populi, as represented by that specialize in malls and shopping centers suggests that the online comments sections1 of several of these pieces, malls are recovering from the recent crisis. The real estate I’ve noted a roughly even mix of sentimental pity and information service Reis reports in their 1Q 2012 market dispassionate, even morbid curiosity. I can relate to both commentary that regional malls maintain the highest perspectives: I’ll forever associate my local malls with occupancy rates of the various retail asset classes, although 2 CNN 2007 1 Hudson and O’Connell 2009 3 Columbus Monthly 2011 82 Agora Vol 6|2012 Southwyck Mall. Toledo, OH (Google Maps) that may be due to the dearth of new malls needing to be GGP’s bankruptcy has thus spawned a new company: an leased. exclusively “B”, or second-tier mall REIT – “B” as opposed to “A.” In creating this new company, GGP even used a legacy The market seems to be saying that some malls are just fine, name of one of its former acquisitions, Rouse Properties, and others will need to be adapted. The mall REIT General to identify the vehicle through which it has consolidated Growth Properties (GGP), having divorced itself from its 30 of its enclosed malls all around the country.5 These are second-tier malls in the aftermath of its 2009 bankruptcy, not dead malls per se, but GGP wouldn’t have spun them apparently sees two futures for its malls: some are truly off if they were not defective in some way. An optimistic outstanding, such as the Ala Moana Center in Waikiki, analyst might say that the new company combines the where GGP recently invested an enormous sum to buy its experience of a reputable mall operator with the flexibility Sears anchor out of the premises4 (Sears typically owns to take entrepreneurial risks that the parent REIT wouldn’t its stores). GGP is standing by its strongest malls. Some of or couldn’t take. Alternatively, this move facilitates the sale GGP’s other malls required special business plans, known of the portfolio to an investor who will take on challenging as repositioning, and therefore might not be suitable to the but potentially profitable “value-added” redevelopments. I dominant class of investor in the parent REIT, which has cannot predict whether Rouse will be successful, but I can limited tolerance for risk. imagine several possible outcomes for individual malls: some lack the potential for growth, but can be profitable 4 Pacific Business News 2012 5 Hudson 2012 83 as long as they are able to defer maintenance. Or perhaps enough of these markets will improve on their own, prompting significant reinvestment in the malls. I suspect I know that I’m not alone in missing what malls were. The that in many cases, however, the underlying “B” mall assets blog deadmalls.com is a great resource for stories about will require a radical fix. It remains to be seen if Rouse’s malls that have seen better days. Through this blog I am investors will have the necessary patience with this mission, aware that there are other people who seek these places or if a successor will take on such a project. out, and I have some hunches as to why this is so. When the Muzak stops and the perfume and Cinnabon aromas have Meanwhile, many of the surviving malls are themselves dissipated, and the mall is emptied of people and things, also transforming – some by design, and others in entirely it becomes a surreal place, one that’s haunted. In walking unexpected ways. these places, I’ve invented games, such as “What store was that?” Maybe there’s only a ruined pilaster, indicating MISSING MALLS a Victoria’s Secret, or a red streamer suggesting a KB Toys. I have visited a number of dead malls and other diminished The attraction of the dead mall is its familiar strangeness. retail landscapes. Commercial real estate is, after all, my occupation. I have not yet been involved in any attempted Some malls persist in a less intense capacity than their mall resuscitations, however. My interest in dead malls is creators could have envisioned. I have visited malls that more of a hobby than anything else. But while I am honing a manage to support a handful of passion projects that sell working theory about retail, I am conflicted both about how niche objects, such as religious icons, Ziggy paraphernalia, bleak the situation really is for malls, and whether malls are and model train scenes. Some of these dead malls have actually worthy of preservation. Certainly Northland Center become hosts to post offices and DMVs, tenants of last in Southfield, MI comes to my mind as a mall that belongs resort. I know of at least one mall that has – or recently had on the National Register, being the first of the modern – a typewriter repair shop. Several malls I’ve visited have malls. But are there other malls that are so worthy? Is it even reverted to non-commercial uses such as churches (or, even possible for a self-enclosed mall environment to be a in Euclid, OH’s Euclid Square Mall, at least 16 churches). And contributing historical resource? After all, malls have always as long as the concourse is open and the air is conditioned, been about newness, and totally dependent on shoppers senior citizens will use the mall as a place to walk. Perhaps and the mall managers who shaped the retail ecosystem this explains why an eyeglass store can survive in Kansas to supply these malls with their vibrancy. A mall bereft of City’s North Park Mall, among a nearly unbroken chain of shoppers is profoundly bland. more than a hundred vacant storefronts. Dead malls inspire. I recently visited the Cleveland Museum of Art, where there happened to be an exhibit of the photographs of Brian Ulrich, a known photographer of dead malls. In an interview, the artist explains that he was compelled to document the peeling veneer of retail landscapes after the proliferation of post-9/11 admonitions that “shopping is patriotic.”6 Ulrich’s photographs were darkly realistic, prompting me to wonder, “Were these places ever nice, or was it all an illusion?” The Museum is currently undergoing an extensive renovation that will unify the exhibit spaces around a vast interior atrium, and while viewing Ulrich’s exhibit from the partially complete gallery, it struck me how similar the experience was to Metcalf South Shopping Center, Overland Park, KS (Photo credit: visiting a mall.
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