The Role of Urban Planners in the Repurposing of Shopping Malls

Shopping centers in the U.S. are gasping for air. Not all of them are in distress, but there are enough of them struggling to warrant concern. Urban planners have a role to play in their resuscitation. First, let’s diagnose the cause of the ailment and then proffer a cure.

Shopping malls were struggling before Covid-19 and will continue to do so even after the economy opens up. Several reasons have been advanced to explain the plight of shopping malls. Ecommerce is often cited as the progenitor. As online sales have grown, this has decreased the need for in-person shopping. Those goods that are most impacted by online sales are clothing, apparel, and accessories. The 2019 fourth quarter report of the US Department of Commerce showed that ecommerce sales represented 11.4 percent of total retail sales. This increased by 17 percent from the previous year and is projected to rise into the future, impacting the health of brick and mortar shops.

There has also been a change in the shopping preferences of consumers towards service and experience and away from what shopping malls provide, consumer goods. The Bureau of Economic Analysis, which provides data on personal consumption expenditure (PCE), reported that PCE in the fourth quarter of 2019 was $14.795 trillion. Two-thirds of this expenditure was on services such as health care. One-fifth was spent on non-durable goods such as food and clothing, and the rest went to durable goods. Since malls provide mainly durable and non-durable goods, this shift in personal consumption expenditure is bound to impact the health of shopping malls.

Another reason for the predicament of shopping malls is simply that the U.S. has been over retailed. In other words, we have more retail space than is needed. In research I conducted on shopping malls, I found that while the U.S. has 9.8 square feet of gross leasable area (GLA) of shopping malls per capita the GLA/capita in the 28 European Union countries is 3.4, and for Greater Europe it is 2.9 GLA/capita. A retrenchment is the market’s response to the oversupply of retail space.

Square feet of gross leasable area of shopping malls

  • U.S.
  • European Union Countries
  • Greater Europe

The polarization of income has also affected the health of shopping malls. In their book, Hollowing Out: The Channels of Income Polarization in the United States, Ali Alichi and Rodrigo Mariscal pointed out that middle income households, that is those earning between 50 percent and 150 percent of the median income, has shrunk. In 1968 this income group represented 58 percent of the population but decreased to 48 percent of the population in 2016. Thus, there are fewer households with disposable incomes to spend in malls. Unsurprisingly, the shopping malls that continue to do well are those in high income neighborhoods while dollar stores have also proliferated to cater to lower income households.

Decrease in middle income households earning between 50 percent and 150 percent of the Median Income

  • 1968 58% 58%
  • 2016 48% 48%

While not significant, there has also been a reurbanization of cities. The return to city centers is led by millennials and empty nesters. As older neighborhoods get gentrified, first ring suburban neighborhoods witness a decline in population. These were the same neighborhoods that had a building boom of shopping malls in the twentieth century and are now seeing a shrinking of their population.

Covid-19 is compounding the problems of shopping malls. When the economy re-opens, the psychology of risk aversion will lead shoppers to avoid crowded places and large gatherings, so businesses that depend on these attributes will be the last to bounce back. Main Street will see a quicker rebound than shopping malls as small businesses provide a quick in and out for customers. Construction work that is done in the open air, boutique restaurants with sidewalk cafes, and white-collar office work will be some of the businesses that will have a jumpstart because they are perceived to have less risk of infection. The public will initially be wary of patronizing places where crowds gather such as sports stadiums, music festivals, and yes, shopping malls. So the struggle of malls will linger until there is a vaccine for Covid-19.

Urban planners will be needed to assist in making decisions in what will be an economic triage of shopping malls; which malls will survive and which should be let go because they are too far gone to be resuscitated. The one thing that is certain is that shopping malls cannot survive on the altar of retail alone, they must be multi-purpose destinations. In this respect, planners can assist in researching and identifying alternative uses for vacant spaces in shopping malls. American Dream, the largest shopping mall in the country, recently opened in New Jersey and provides a good example of this form of development, what has been termed the lifestyle center approach to repurposing shopping malls. Developed by Triple Five, the mall is designed to be a multi-purpose venue that includes retail, a theme and water park, an indoor ski slope, and an aquarium.

Shopping malls have traditionally been built as isolated fortresses surrounded by a sea of parking and detached from the environment in which they are located. This will need to change to increase pedestrian access to the malls and to capture the local residential market as part of the redevelopment strategy. This approach is being used by the city of Edina, Minn., to help revitalize the Southdale Mall. In addition to repurposing the old mall into a mixed-use destination of retail, luxury apartments, hotel, and restaurants, the city of Edina is also pursuing complementary development through a neighborhood redevelopment plan that will create high-density residential housing near the mall. It is also investing in pedestrian and bike infrastructure to support a live-work-play redevelopment theme for the neighborhood.

City planners will also be needed to provide design alternatives to enclosed malls, opening them up to allow entry to the shops from outside rather than through the enclosed courtyard. In some cases, the courtyard can be transformed into an open air plaza or common green space, providing a social gathering space that adds to the shopping experience. This will have the added effect of decreasing crowding in shopping malls and the fear of infection in crowded places when the economy opens up. Removal of the interior common area also decreases the cost for lighting, heating and cooling for developers, a much-needed cost savings in this time of austerity. The former East Brook Mall, now Centerpointe Mall, in Grand Rapids, Mich., exemplifies this approach to the revitalization of shopping malls.

In some cases, city planners may come to the realization that the cure may be worse than the illness, and some shopping malls have to be demolished despite their best efforts. To avoid burdening taxpayers with the cost of these demolitions, cities may have to start requiring developers to post long-term bonds as security for insuring the public investment in these malls and to pay for their eventual demolition when they outlive their shelf life.

by Michael Burayidi
Professor of Urban Planning

Michael A. Burayidi is an urban planning scholar and intellectual with interest in downtown redevelopment and planning with multiple publics. He has authored and/edited eight books in this area of scholarship for which he is nationally and internationally renowned.

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