That Icon of American Consumerism
by Mad Rocket Scientist
In an effort to NOT be just another “Gun Guy” (seriously, I have many other interests, firearms are just a hobby), I thought I’d post about something completely different.
New Dealer recently posted about how cities can not keep the PWK middle class inside the city limits, and I felt this article by Robbie Moore from The International would be somewhat apropos: The Death of the American Mall and the Rebirth of Public Space
As a kid, I spent a lot of time in malls – less as a rampant consumer than as a bored teenager, but still it was a place to go. Said malls usually had one or two stores I loved to shop in, typically a video arcade or a Waldenbooks (about the only place I could find AD&D manuals and sci-fi/fantasy pulp fiction). They also had junk food, shelter from Wisconsin winters and summers, and age appropriate girls.
As an adult, I can’t stand malls and I spend as little time in them as is needed to get what I need and be gone. Yet I can’t help being a bit sad to see many of them struggling and shuttering, especially some of the ones that were a part of my formative years. As an adult, it is interesting to look back – further back than my own birth – to see some of the history of the places. This link has some history on a mall that was a place I frequented until I left home for the Navy (and even during the few times I’ve gone back home). I remember going there to buy a shirt for my mother’s funeral service, because I had to deliver the eulogy and the shirt I had packed had been ruined by a too hot iron.
Lots of memories in these places, for many of us, I suspect.
I was born into the era of malls. The nostalgia is there, but I won’t miss them terribly if they vanish. I hope they do become better places, parks, centers of community, more mixed use urban spaces – or even just better malls – something more than just box like enclosed shopping plazas.
How about you?
I graduated HS in 1983 so i was in the Mall Era. Also growing up in suburban NJ meant there weren’t many public areas to go to and none of them had book stores, more than two video games or Spencers Gifts. Of course the best pizza places were not in malls nor was White Castle or diners. But we went to the malls a lot. There were three in close driving distance and many more scattered around. The arcade was a powerful draw in those days.
Malls have there uses in areas with a lot of crappy weather but they do tend to homogenized. They have the best of nothing. I avoid them now but have, usually on vacation, stopped in to get one thing or another with the wife. It did bring up some nostalgia to be wandering around a mall. That is there best use for me now, a little bit of pleasant nostalgia.Report
Todd – Excellent Musical Accompaniment!Report
I graduated HS in 1998. I remember going to the mall a few times in HS but honestly it was easier for me to get into NYC. NYC was a 35 minute train ride from my town. My house was a ten minute walk from the train station. Getting to the car required my parents to drive me.
I don’t really remember doing much at the mall in high school. Perhaps looking through the larger music stores for CDs but I always preferred going into the city to hit the indie shops.
San Francisco has a very nice mall called the Westfield. Bloomingdale’s and Nordstrom’s are the attached department stores.Report
roooooooosevellllllt fiiiiieeeeeeeeeeeld
i’ve always liked how strong islanders say maaaaaul.Report
Yup. Been there many times.
I try to suppress my Long Island accent as much as possible but there are some words where it just comes out unless I am being overly conscious.Report
Lots of places have a Westfield Mall. The one with which I’m most familiar is in Skokie.Report
Old Orchard. I used to know that place well.Report
Yeah, I still think of it as Old Orchard despite the attempt of Westfield to obliterate the Old Orchard name.Report
Yeah I think they are a chain.
I’ve never been to Chicago-land (but of course I know Skokie, I feel like is one of the Jewish towns that every Jew knows. I’m surprised about how many West Coast Jews know about my East Coast Jewish suburb-hometown).
I think Westfield is the kind of mall that will survive. Filled with mid-market and above brands shopping.Report
Westfield is one of the largest owners of regional malls in the United States along with General Growth Properties, Simon, Macerich and CBL. They have quality malls all over.
Which hometown? One of the Jewish suburbs out here has one what I think is one of the five best malls in the United States – The Mall at Short Hills.Report
There were two prominent malls in my childhood. One – Micmac – was the grander, more upscale of the two, and is still around, and still very busy. The other – Penhorn – went into an irreversible decline after Walmart relocated from it to a box store.
I miss Penhorn. It was seedy, and the stores were always on the lower end of the economic scale. But I bought pets from the pet store and books from the book store there. I played on the mall’s indoor playground as a kid. I went to the movie theater there for years. It was a major part of my youth, and I was sad when they demolished most of it, even though what they replaced it with is a marked improvement. I think it’s natural to be melancholy about the loss of the great symbols of our youth.Report
ZACH! I smell a Nova Scotian! Welcome!
I was raised just south o’ you in Lunenburg County. I have vaguely fond memories of Park Lane Mall in Halifax back when it was posh. Personally I liked malls, they were not soaked in fog or rain and there were book stores and second cups.
I’d note also that my new state of residence, Minneapolis, played host to the very first mall. Once taste of the winter winds here and you understand very clearly why. But cold as it gets here Nova Scotian damp North Atlantic winters were worse.Report
Thank you. I actually live near Spring Garden at the moment, so I normally go to the theater at Park Lane for movies. On the subject of mall renovation – I’m not sure when you were last there, but they ripped out most of the food court and wall fountain and replaced it with a fitness centre.Report
Oh when I mean posh I mean the 1980’s posh. As a kid I remember it seeming downright magical. It’s been going downhill ever since.Report
Park Lane has the added wrinkle in that the mall in its entirety is a condo unit, one which the condo corporation relies upon to pay for its other expenses. The corporation is in a difficult position: it either incurs expenses in an attempt to further repurpose it, or it risks its long-term future. It will be interesting to see what state it will be in 15 years from now.Report
Wow, I had no idea. That’s fascinating. I’d hate to be owning a condo in that place. But gosh during its hey dey they must have been swank!Report
Kentucky is way ahead, converting Lexington Mall into the third campus for Southland Christian Church, featuring a 52,000 square foot auditorium. They hope to hit 10,000 members.
Lexington Herald Leader article
Ironically, this is the same city that saw a synagogue on the registry of historic landmarks converted to a pizza parlor. What was the pulpit is now a bar. (Joe B’s)
I think most American malls could be repurposed as mega churches complete with Jesus riding animatronic dinosaurs down the wide corridors and an escalator to heaven, although in some areas it would make more sense to convert them to monasteries, abbeys, and convents.
Of course they’ll eventually be abandoned by humans and get taken over by gorillas and orangutans, and Banana Republic and Orange Julius will see their popularity reborn.Report
Brownsville did that too. Bonus points for being a coffee bar and computer repair shop.Report
Since the post has nothing with which I can argue, I will gin up an argument of my own.
Consider this, from the link:
“These older malls emerged during an artificial boom, argues urban historian Thomas Hanchett in the American Historical Review. Mall construction was stimulated by the accelerated depreciation laws of 1954, Hanchett writes, which incentivized greenfield development on the urban fringe. A second stimulus came from legislation passed in 1960, which allowed investors to band together in REITs (Real Estate Investment Trusts) to avoid corporate income taxes.”
In other words, shopping malls were not created by the invisible hand of the marketplace, responding efficiently to supply and demand.
Instead, the marketplace was artificially distorted and warped to produce an end which would not have otherwise happened.
Maybe it was a good thing, on balance. Maybe not. But either way it demonstrates the often hidden subsidies and market distortions that created wealth for investors, who otherwise would have had a harder time of it.
So again, they didn’t build that!Report
Uh.. dude.. you realize you’re sounding like a libertarian here yes? The mall phenomena was generated by government caused distortions?Report
Yes, and it highlights a curious dynamic. Both liberals and libertarians agree that governmental rules and regulations, create distortions in the market (using distortion non-normatively there, not to imply all distortions are bad), but liberals seem to use this agree upon empirical fact as the basis for pointing out, “there’s no such thing as a free market,” while libertarians seem to use it for pointing out, “seem government screws up markets.”Report
Some distortions are good*, others are not.**
*Worker protections, anti-discrimination laws, pro-union laws, etc.
**Subsidies for stadiumsReport
Depending on your perspective, you could switch the good & the bad around.Report
Sure but that is not my prospective.Report
I was going to make a comment along these lines. For LWA and others, it’s ultimately a blank check for endless future intervention. If there is no free market to protect, you might as well just regulate commerce however you see fit. The distortions in favor of the suburbs are not a reason to do away with those distortions, but to apply new distortions to reverse them. Well, “reverse” to start, then “because it’s what we want people to do.”Report
Well, can anyone even conceive of a non-distorted market?
What would such a thing look like in a modern industrialized economy?
As I mentioned in another thread, the self-described libertarians are all in agreement that distortions (like governments, regulations, public infrastructure and the like) are needed; they just quibble about the degree and direction of these distortions.
So why the constant appeal to a distortionless market?Report
Mall filled a niche and still continue to fill a need. Remember how many of them benefited from free parking versus paying to park to shop in a downtown department store? They also allowed recreational shopping and all-weather shopping.
The malls that are going away are the neighborhood malls that do not draw enough traffic. However, manymalls still survive as regional malls that draw customers from a large area. I would say that one thing that has gone away is the idea of the mall rat. No more arcades and since they are regional, longer drives from the neighborhoods.Report
I think the emphasis should be on ‘niche.’ Online shopping will continue to take its toll on smaller retailers, and the larger surviving chains will tend to favour the big format over being an anchor store for a mall. Target and Walmart would both prefer that almost all purchasing be done in their stores – they have little reason to want to stay in a mall.Report
I think the deleterious effect that Target and Walmart have had on malls is understated in these analyses. I stopped going to the mall when I could do all of my one-stop shopping at hypermarkets.Report
I work for a company that has a strong business advising clients with respect to dispositions of regional malls so I’ll respond to this.
“These older malls emerged during an artificial boom, argues urban historian Thomas Hanchett in the American Historical Review. Mall construction was stimulated by the accelerated depreciation laws of 1954, Hanchett writes, which incentivized greenfield development on the urban fringe. A second stimulus came from legislation passed in 1960, which allowed investors to band together in REITs (Real Estate Investment Trusts) to avoid corporate income taxes.”
I’d like the link so I can understand the context and what he means by “older malls”. Even without it, I’m not sure I completely agree.
If you’re arguing that both of these together contributed to a regional mall boom, then I’m confused. Accelerated depreciation is a benefit for tax purposes, but if an entity like a REIT is non-taxable (they’re not if they distribute 95% or so of their available cash as a dividend), it won’t apply.
Even when I address each argument separately, I’m not convinced. Even if accelerated depreciation incentivized greenfield development, that in of itself does not make the development of commercial real estate economically feasible. There isn’t going to be a lot of value to developing real estate if a developer can’t lease it to the point where it is cash flow positive and yielding the appropriate risk-adjusted return. Granted, I don’t have all the details about this on hand, but if I recall, there was a period of time during the 80s when a lot of real estate investment was driven by tax shelters, but that was because losses in real estate could be applied to offset taxes on ordinary income. I believe this was eliminated in the Tax Reform Act of 1986.
While a handful of REITs own an overwhelming majority of institutional quality regional malls today (i.e. GGP, Simon, Westfield, Macerich and CBL), it wasn’t always like this. Before the REITs became a more favored asset class amongst institutional investors and were able to raise enough capital to get to the sizes they are today (which started in the 1990s), life insurance companies, department store companies and pension funds were the largest owners of malls. REITs had yet to make their impact. I should also mention that life companies and pension funds are non-taxable entities so accelerated depreciation would not be of benefit to them.
In other words, shopping malls were not created by the invisible hand of the marketplace, responding efficiently to supply and demand. Instead, the marketplace was artificially distorted and warped to produce an end which would not have otherwise happened.
The development of malls were largely market-driven because the development of malls coincided with large segments of the population moving out of the cities into the suburbs. As some of these suburban population centers grew larger in size, mall developers moved from the more traditional concepts into some of the larger super-regional centers that exist today.
Was every variable purely market driven? Absolutely not, but there was plenty of demand in place to sustain certain levels of regional mall development no matter what distortions were in place.Report
Great comment, Dave. Very insightful.Report
Thank you.
I pulled a few comments out of a report we produced for a major sovereign wealth fund that, based partly on our work, invested over $1 billion into one of the mall REITs. I’m not sure if I have the tax law competely right since I didn’t get into the business until 1996, but I do know that tax-driven investing went away after the TRA of 1986. As a sidenote, I think that was one of the causes for the SnL crisis given that they were the ones doing all the lending. Crazy times from what I hear.Report
To answer the question you posed i would hope we would have more public spaces in the future. Not just stores, although shopping certainly will be part of any public space, but parks and a wider selection of places then you get in a mall. Hopefully it would a be place where all age groups have a niche to feel at home.Report
Mixed used areas actually a smaller selection. While walking around Claredon Virginia I realized that virtually all of the businesses are either food, dry cleaners, hair and nail care, and gyms. Purchasing something that actually goes into a shopping bag other than liquor is limited to a single block.Report
I used to work in a shopping mall in Fort Wayne, IN. Years later I went back and the mall was beyond dying–the life support plug had been pulled and it was breathing its last gasps. While Sears repaired a tire, I walked past strings of empty stores. The mall was around 90% vacant by that point, and the few remaining were scattered far and wide, too far apart to draw clusters of shoppers. It was spooky, like a dystopian movie. The mall is now gone, razed.
On another note, when Chrysler built its headquarters in the Detroit suburbs in the mud-90s, they weren’t sure the company was going to survive, so they designed it so it could be repurposed as a shopping mall. Now, oddly enough, it looks like the company may outlast the mall concept.Report
When I was college, there were two malls on the same lot. One was a ghost town mall and the other was a typical middle-class mall at the time.
The ghost town mall was spooky like you described. I think the only really active store was the anime store.Report
I should add that I still believe in retail shopping, just not necessarily malls. I am more of a new urbanist and city person here. I don’t want to live in Matt Y’s tech utopia where all retail is done on-line.Report
It seems to me that there will be a place for boutique shopping where a personal connection to customers, specialised knowledge of the goods and stocking of obscure products might command enough of a premium to allow it to compete with cheaper online retailers.
I think it’s the bargain basement, chain retailers that are most at risk. A store that lives by prices will die by them.Report
Possibly. The Music and Bookstores that are surviving are independents or small-chains that tend to be a brand in and of themselves and/or have specialized knowledge. This can range from small-vinyl only stores or fairly large places like Ameoba Music in the Bay Area (plus an LA outpost).
I am not sure that most chain-retailers are at risk. JC Penny and Sears and Kohl’s are going down but plenty of mid-market and above chains/department stores are doing fine.
The big mall in San Francisco is filled with mid-market and above brands like J.Crew, Banana Republic, Lucky Brand, Bloomingdale’s, Nordstrom, etc. They are jammed packed. A factory outlet type place just opened up in Livermore and is filled with the same kind of mid market and above type of stores. That place is doing very well also.Report
What is “the big mall” in San Francisco? Is that the multi-level thing near the piers and Embarcadero?Report
The Westfield. It is on Market and 5th.
The Embarcadero Center is more touristy I think but they have retail there as well and upmarket stuff like Allen Edmonds.Report
The Westfield has a first-rate food court as well as an embedded BART station. I’ve used it a few times for lunches for friends who work in scattered places.Report
Too bad Out the Door closed down.
Yeah that is a food court that says “Only in San Francisco”Report
How the hell can anything at Market and 5th be called Westfield?Report
There’s a scene in one of the books where Dortmunder is selling fake encyclopedias door-to-door in a suburban subdivision when Kelp drives up.
“What are you doing here? You said you’d be in Oak Park Estates. This is Shady Pine Vistas.”
Dortmunder looks down the street. Neither an oak nor a pine tree in sight.
“I must have slipped acros the border.”Report
Think of it as a fanciful nameReport
I don’t think malls will die out altogether. I think there will still be enough desire for shopping for tangible items, such as clothing, to keep the best of them in business.Report
meh. I forsee the death of malls, as they were originally conceived. Big anchor stores are dying out, man.
I forsee more tailors, more “group oriented stores” (ala “date stores” like Starbucks or those big box bookstores), more stuff that can’t be outsourced. Oh, and less “indoorsy”.Report
meh. I forsee the death of malls, as they were originally conceived. Big anchor stores are dying out, man.
The strongest department stores in well-located regional malls will do very well. Yes, there are certain stores that are in various degrees of trouble. Sears and JC Penney are two examples, but others seem to be doing pretty well. Regional malls have their share of issues.
Upscale regional malls face competition from outdoor lifestyle centers that allow customers to walk up to a storefront rather than navigate the fun halls of regional mall hell. Rural malls are in real trouble. If it’s not the state of the economy that has hit them hard, it’s the local Wal-Mart down the road. Heaven forbid if the demographic patterns shift and you’re left with an oversupply of mall space. If you’re on the wrong end of that deal, your mall will suffer.
I remember hearing the doom and gloom stories about traditional retailing when online retailing started to come into its own in the late 1990’s. It hasn’t turned out that way, but online retailing has made its mark and it has impacted regional mall tenancy. It’s one reason why you don’t see many bookstores of music stores inside malls anymore.
To your comment about more bookstores, Borders is dead. Barnes and Noble is still standing but it faces immense competition from Amazon. I can’t see more bookstores unless they are of the independent variety located in communities that aren’t near major traffic areas that can support big box retail. We have stores like that where I live. They do very well.
I also think Best Buy isn’t long for this world.Report
Best Buy is doing a great job of following Circuit City’s example:
They see inexperienced minimum wage zombies as providing similar value as experienced workers with television, or computer, or stereo, or music, or software expertise… for less money!
When Circuit City did it, they removed one of the reasons you’d go to Circuit City instead of somewhere else. Now that Best Buy is doing it, they’re removing one of the reasons you’d go to Best Buy instead of the internet.Report
I’ve also been in stores where the ratio of employees to customers is unusually high. Not only are there inexperienced zombies, but there are hordes of them!
Is it any wonder that people view Best Buy as a de facto showroom for Amazon?Report
my comment wasn’t more bookstores. It was an acknowledgement that “Sex Sells” and that bars don’t do it for everyone.
There’s a good market there. Maybe the bookstore didn’t cut it. Try again, America!Report
Kim–I think it depends on the location of the mall. I don’t see Nordstrom’s or Macy’s dying out anytime soon. As for them becoming more ” outdoorsy,” again location matters a lot. Here, in Greensboro, it’s not a big deal because of the climate. But how many people are going to want to schlep through an outdoor mall in Minneapolis in the winter? Or the summer, for that matter, when the humidity and mosquitoes take over?Report
I don’t shop outside of walking distance during the winter. And I’m not in Minneapolis. I wouldn’t dream of casually going to a mall in the winter there, out or in.Report
I’m pretty sure Mall of America is crowded no matter what time of year.Report
Ya. Bus Tours.
(no, I’ve never been. but me mum runs bus tours.)Report
Use the sun to melt the snow, on the “outdoor” sidewalks that are covered from snow by glass.Report
Bookstores are a thing of the past. Barnes and Noble are limited and the percentage of the population that actually reads is going down.
Regional malls will survive to sell clothes to women for some time. I think women’s will be last thing that can be replaced on line because the return policy of internet retailers cuts margins too much.Report
The DeBartolos made their money in building shopping malls. No malls, no five Super Bowls.Report
The most damning criticism of malls I’ve ever heard.Report
I once entertained a concept of turning dead malls into growing spaces for local produce. All the HVAC is already there, I thought. These malls are often found in the vicinity of large run-down apartment complexes, I should be able to find workers: such an operation would need lots of workers.
Ran the numbers on an old mall: it just didn’t add up. The real estate under them is too valuable.Report
There’s been a lot of discussion in my corner of the real estate world about converting retail space to medical space. This is probably one of the most ambitious examples of it that I’m aware of. Most of the enclosed regional mall space was converted to medical use and leased to Vanderbilt University Medical Center on a long-term basis.
http://en.wikipedia.org/wiki/100_Oaks_MallReport
I wonder what would drive the real-estate value down enough to make that happen?
Or another alternative, lots of malls have flat roofs. Rooftop gardens?Report
In the proper parts of the country, large arrays of solar panels.Report
Let’s go to the mallReport
As I’m sure many of you know, the film Dawn of the Dead (1978) is set in a shopping mall overrun by zombies, which in the original is played as a bit of a satire on consumerism (not so much in the remake). At any rate, there’s a scene in which the heroes first enter the mall via helicopter and one of them says something like, “What is that?” and the other replies, “It’s one of those big, new shopping centres.” The line now gets a big laugh, but the interesting thing is, for 1978, it was necessary to make sure the audience knew what was going on!Report
I grew up in an area where the closest mall was two hours away..by highway. Going to the mall was an event, and an all-day affair. Back then it was exciting.
Now? I hate them. I actively avoid them after October to avoid all the xmas shoppers and only go to them when I need to either try something on, return something that I’ve bought online, or need can’t get the product I want online/in the timeframe desired.
Why? Too many people. Too many idiots who don’t know how to park and who will block traffic waiting for that one close spot to open up rather than go up another floor and park on the completely empty lot up there, who wander around aimlessly, veering into my path, and who make “shopping” a form of entertainment, not a task to be completed as quickly as possible.Report