A shopping mall with protected wetlands

I recently shopped at a mall with protected wetlands:

The first thought I had upon seeing this was of “nature band-aids” that can often be found in suburbia as described by James Howard Kunstler. Shopping malls are known for many things but nature is not one of them.

Or, perhaps these are real wetlands that make contributions to the local ecosystem? This outlet mall has a location similar to many other malls: in the suburbs along a major roadway. I could imagine a need for land for animals and water amid development in the recent decades.

It would be interesting to know how these areas came about. Was part of the development of the land contingent on setting land aside for wetlands? Was a discovery made later about local nature? Is there some precedent among shopping malls for this?

“The late-twentieth-century United States doesn’t make sense without the mall”

A new book looks more positively on the future of the American shopping mall:

Meet Me by the Fountain challenges the dominant narrative. Lange wants us to consider how in prematurely writing off the mall as dead, or in thinking of it as “a little bit embarrassing as the object of serious study, ” we neglect the important role these buildings have played in our lives. At their best, malls have always been more than just sites of conspicuous consumption and leisure, but places for communities to gather, to see and be seen, fulfilling a “basic human need.” Lange’s book reminds us that the mall has helped shape American society, and has evolved with our country since the 1950s. And she posits that there’s still a place for malls in our society, as long as they adapt to better serve their communities.

Malls grew alongside—and because of—the federally subsidized postwar expansion of the suburbs. “The late-twentieth-century United States doesn’t make sense without the mall,” Lange writes. If the American dream was owning a detached house for your nuclear family, the mall was where you bought the goods to fill your home and clothe your kids. Malls became the suburban equivalent of downtown shopping districts. But while malls, like their city counterparts, serve as public spaces, they are privately owned and policed, and any sense of community that one gets from spending time at them is always secondary to the primary pursuit of consumption…

And yet, despite these problems, Lange reminds us what the mall gave us in the past and explains why she sees in its form hope for a future of adaptive reuse, in which these spaces will “embrace their public role” rather than try to privately control who can use them and how. Lange argues that malls should be repurposed for walkable mixed-use developments that combine the residential, commercial, and public. The behemoth shells of anchor stores—the department stores that sat at the ends of corridors—could enclose food halls, entertainment-centered businesses like trampoline parks, or public libraries; parking lots could be repurposed for senior-housing units. These places would still be malls, but ones that are more experience-driven and less shopping-centric…

This kind of ambivalence is all over Meet Me by the Fountain. Lange’s ultimate vision for reusing the space of malls might be one that largely repudiates a singular focus on commercialism, but she doesn’t discount shopping and what it can do for us. She argues that we “find freedom in shopping” for our “true selves,” and that malls have given us more than just self-expression. They are what Ray Bradbury, in a 1970 essay in West: The Los Angeles Times Magazine, called “Somewhere To Go”: a place that draws people together, that creates a de facto community.

Two features of this summary stand out:

  1. The shopping mall as it is known in the United States is part of suburbia. Even though malls can be found in major cities, they started in suburbs and are primarily found there.
  2. Related to #1, shopping malls emerged as places for community within a suburbia that prioritizes private single-family homes and has relatively few public spaces.

If this was a “chicken and the egg” question, the answer seems clear: suburbs came first and then shopping malls developed in that context. The shopping mall even co-opted the department store, the urban shopping emporium that emerged decades earlier in rapidly growing cities.

The enduring tension, described in this review, seems to be this: can malls ever truly become places for the whole community or are they primarily profit-centers where some enjoy shopping together and gathering around other shoppers? Or, to put it in other terms, can shopping malls ultimately serve people and not just markets?

The suburbia where those who work from home have money to spend nearby

If more suburbanites are working from home and spending more time in the suburbs, suburban communities and businesses want their money:

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Suburban developers and retailers are working to provide ways to escape home, be around others, and, most importantly, spend newfound time and money…

Neighborhood retailers are eyeing the money she and others are saving on the commute, in addition to the thousands of dollars that office workers typically spend annually in restaurants, bars, clothing stores, entertainment venues and other businesses. In many cases, coffee breaks, haircuts and happy hours that used to happen near downtown offices have moved to the suburbs…

In the Washington region and nationally, the trend is most striking in higher-income inner suburbs, where more residents have computer-centric jobs suited to remote work and money to spare…

The new weekday demand, developers say, has helped suburban shopping centers and entertainment districts reach and, in some cases, surpass 2019 sales. The pandemic also accelerated long-standing pre-pandemic trends toward walkable suburban developments and the “third place” — public gathering spots like coffee shops and bookstores, where people can connect beyond home and work.

I want to expand on one of the ideas suggested above: this may already be happening in wealthier and denser inner-ring suburbs. These communities already have residents with more money to spend and already have a denser streetscape from a founding before postwar automobile suburbia.

But, could this go further? Suburbanites with more money to spend live in certain places. The shopping malls that will survive and even thrive are likely located near wealthier communities. Having more resources could enable certain suburbs to redevelop and add to their offerings compared to others that could languish in a competition for spenders and visitors.

Imagine then an even more bifurcated suburbia where wealthier suburbs have vibrant entertainment and shopping options while other suburbs do not. The suburban work from home crowd is not evenly distributed and neither are the communities and amenities they might prefer.

Transitioning a glittering downtown shopping mall to a more experiential space

Water Tower Place on North Michigan Avenue has fallen on hard times, as have many malls, and plans are underway to revive the property with new uses:

In consultant-speak, today’s juice is “experiential” retail. It means that people not only want something they haven’t seen before, but they want an experience to go along with their purchase. The Apple Store and the Starbucks Reserve Roastery further south on Michigan Avenue are examples of that — places where shoppers come to see and feel as well as to buy. A pop-up show called the “Dr. Seuss Experience” filled Macy’s former space in Water Tower Place this winter. Down the street, a “Museum of Ice Cream” is opening at the base of the newly renovated Tribune Tower this summer…

But she and her colleagues are already thinking big. A report titled “North Michigan Avenue: Strategies for a Vibrant Future” issued in March by a group of business and city leaders envisions a grand promenade running from the historic limestone Water Tower, past the Museum of Contemporary Art, to the lake along Chicago Avenue; and a soaring pedestrian bridge stretching from Michigan Avenue, over DuSable Lake Shore Drive, to Oak Street Beach. The bridge, modeled on a structure in Moscow, would make it possible to see and get to Lake Michigan from the Mag Mile without descending into dank tunnels under the beachfront drive.

Also in the report: a more run-of-the-mill property tax on landlords raising about three quarters of a million dollars passed the City Council this year; it will be used for cultural events like “Music on the Mile” and for security cameras. The city also awarded Bares’ group money from a federal grant to deploy a team of uniformed “ambassadors” — unarmed security personnel with radios to help tourists, assist the homeless and report criminal activity on the Mag Mile — starting in June.

But most of the report is focused on getting people excited about going downtown to enjoy attractions such as music, art and culture, and Water Tower Place recently scored its own big get on that front. In April, the world-renowned Hubbard Street Dance Chicago surprised everyone and moved from a temporary home on the North Side into the mall’s fourth floor.

For years, shopping in a lively context was enough “juice” to bring in both serious shoppers, curious shoppers, and other visitors. Shopping was one of the most popular activities for Americans and the glamor of a downtown mall plus at least a decent-sized crowd would make it feel exciting.

Now that shopping is decoupled from physical space, these former shopping spaces do not have enough “juice.” They need more experiences, ranging from music to arts to unusual sights to places where people can post intriguing social media images.

Can cities and communities be flexible enough to shift spaces and experiences? And how many experiential areas can there be? On the first question, communities need to open to how spaces might be used in different ways when conditions change. Shopping malls may have worked for decades and brought in significant revenue, but when they struggle, what is next? For the second question, Chicago already has some of these experiential spaces: Navy Pier, the Museum Campus, a Riverwalk, and other concentrations of interesting activity. Can these work together in that a visitor could access several of these in a single day or trip or at some point do they start competing against each other?

The decline of in-person shopping is a big deal and a shift that many communities are struggling to address. Those who find successful alternative uses for these shopping spaces and also develop a mindset of needing to refresh certain places may just come out ahead.

Even Woodfield Mall could be enhanced by nearby high-density residential development

As shopping malls struggle, an area near Woodfield Mall in Schaumburg may soon include taller apartment buildings:

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Schaumburg officials are considering drafting regulations for potential redevelopment near the Northwest Transportation Center of Pace Suburban Bus that would permit high-density residential buildings, as well as one or more parking structures.

Trustees are poised to vote Tuesday to direct the village staff to prepare such a transit-oriented district bordered by Woodfield Road to the north, Martingale Road to the east, Higgins Road to the south and the eastern edge of the Schaumburg Corporate Center to the west.

Transit-oriented developments — characterized by a mix of uses including homes near transportation hubs such as train or bus stations — are found in many areas of the suburbs. But this would be the first true example in Schaumburg, Community Development Director Julie Fitzgerald said.

The entire commercial area around Woodfield Mall so far has been free of residential development since the mall was built more than 50 years ago.

Such a plan would build on three trends:

  1. Including more residential units in and around shopping malls (recent examples from the Chicago suburbs here and here). This helps increase the number of people who might frequent the businesses nearby.
  2. Locating higher-density housing around transit hubs. The resulting transit-oriented developments could reduce the reliance on cars with mass transit options immediately accessible.
  3. Placing higher-density housing away from single-family homes and lower-density housing. Such a location is less likely to draw concerns from neighbors who express concerns about traffic, noise, and an impact on their property values.

If plans go forward, it will be interesting to see the price point of these residential units and whether this kicks off more residential development in what is already a busy area. Perhaps Schaumburg will become the home to more businesses and more apartments?

Residents, local leaders oppose a plan to redevelop a struggling suburban mall with 560 apartments and several businesses

Charlestowne Mall in St. Charles, Illinois has struggled in recent years (earlier posts here and here). Yet, when a developer proposed adding 500 apartments to the property, residents and local leaders did not like the idea:

Google Street View

Plans were to raze the majority of the largely vacant mall to make way for 560 apartments and townhouses, a hotel, new restaurants and retail spaces along East Main Street…

“It’s a good plan but the question is, is this the best use of space?” 2nd Ward Alderman Ryan Bongard said at the meeting. “In speaking with constituents, they don’t want to see 500 apartments.”

On Friday, St. Charles Mayor Lora Vitek confirmed the developers have pulled out of the project. The partnership of S.R. Jacobson Development Corporation and Lormax Stern Development Company LLC had previously entered into a purchase agreement for the former Charlestowne Mall property with current owners The Krausz Companies LLC.

In December 2017, Krausz closed Charlestowne’s interior shops and enclosed mall space at the center. Anchors Von Maur and Classic Cinemas Charlestowne 18 remains…

“That’s the overwhelming comment that I have heard through the city council,” Vitek said. “And I do believe that we can try to accomplish that. We shouldn’t settle. We’ve got a lot going for us. We know there needs to be more people here and we’re going to bring residential, but there needs to be a balance over there, too. The east side is very important to our town, but we do want to see the right fit.”

On one hand, I can understand this common suburban concern: if you eliminate commercial property and rezone it for other uses, will you ever get the same amount of money in tax revenues from the property? A successful shopping mall or entertainment area brings in sales tax revenue in addition to paying property taxes.

On the other hand, this particular shopping mall has languished for years. Shopping malls in general face big issues and many will not survive. There are only so many suburban entertainment districts that will work. A willing developer wants to build a mix of residences and businesses and it is not enough?

Here is my guess about what scuttled this project: suburbanites do not often like the idea of hundreds of apartments, particularly when they are located in a community that sees itself as full of nice single-family homes. Apartment dwellers are looked at with suspicion. Apartments threaten the single-family home nature of the community as they can increase traffic, bring more kids to local schools, and threaten local property values. Even expensive apartments are not desirable in large numbers.

As St. Charles does not “settle” for this kind of proposal, what better option will come along?

Keep the suburban shopping mall alive by charging current shoppers an extra 1% tax

Leaders in Skokie, Illinois want to approve a new 1% tax for purchases at Old Orchard mall in order to help keep the shopping mall going:

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Skokie lawmakers during their Feb. 7 village board meeting voted 7 to 1 to make the mall a “business district,” under Illinois’ Business District Development and Redevelopment Sales Tax provision, allowing businesses there to charge an extra 1% sales tax. The board will take a final vote on the proposal in March.

The $5 million generated annually by the additional 1% sales tax will be used by Westfield to do about $120 million in upgrades and rehabs in the mall, which is the largest tax generator in the village.

Mayor George Van Dusen said the new tax and upgrades are essential if the mall is going to remain viable…

Creating a “business district” includes designating the area as “blighted” to facilitate development and redevelopment by imposing an additional tax, Village Manager John Lockerby told the board.

“The viability of the mall is critical to the community, applicable school districts as well as other units of government,” he said, adding that the initiative will set the mall up for long-term success.

Shopping malls, in general, are struggling and not all will survive. This move is intended to help keep Old Orchard going amid tough conditions with COVID-19 and online retail.

But, this is an interesting choice. Here is a few reasons why:

  1. It takes money from private consumers to fund private development through and to ensure local tax monies. The profits go to the mall developers and the community benefits from ongoing tax revenues, jobs, and shopping opportunities. Would this be appropriately termed a “public-private partnership” or a “taxpayer subsidized” project?
  2. As the article notes elsewhere, other communities could use similar tactics to establish “business districts” and keep their own shopping centers alive. Does this just keep the competition going?
  3. The goal is to keep the mall going because it is already there. Is it a sunk cost? What other good might be done in the community with $5 million annually?

A developer describes the difficulty in redeveloping a suburban shopping mall

A developer describes the challenges they face in planning a new future for what used to be Charlestowne Mall in St. Charles, Illinois:

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“The redevelopment of a vacant enclosed mall is one of the most difficult undertakings in real estate development,” he said. “The Wall Street Journal ran an article a few weeks ago describing how none of the options for a mall makeover are easy. Conversions to other uses are complex and capital intensive. Unless there is a great shortage of land in an area, most developers would much prefer to buy land and avoid the expense, time and complexity of tearing down an old mall.”…

He said the challenge is to figure out how to redevelop the mall in an economically feasible way that pays for an estimated $35 million in redevelopment costs while maintaining the existing commercial uses during reconstruction and satisfying the city’s desires for something that will serve the needs of the residents of St. Charles.

The developers plan to initially foot the bill for those redevelopment costs. But to make the project financially feasible, he said a tax increment financing district will have to be put in place…

“A tax increment financing district must be established to pay over time for the estimated $35 million cost of demolition and reconstruction of site improvements that are necessary to accommodate many uses for the property,” he said. “This is exactly the purpose for which TIFs were created. Without a TIF, the redevelopment of the mall is not financially possible.”

In addition, he said a revenue stream must be created to pay for the project’s costs. After analyzing the situation, the developers said the revenue stream must come primarily from real estate taxes generated from at least 500 residential units.

The American shopping mall is in bad shape. Redevelopment ideas have been circulating for years and malls have added restaurants, entertainment options, and housing. But, as the above suggests, this is not necessarily an easy task. Shopping malls were supposed to be good for communities, providing shopping, a place to gather, and tax revenue. Redevelopment offers the possibility of a brighter future but it requires work.

It is not surprising to hear that a developer wants help in redeveloping the property. This will help them make money. It is common practice in many communities to offer such help, particularly for important properties. At the same time, this property has some value. Malls are typically located on valuable land, often at the confluence of major roads and adjacent to other shopping and restaurants but also possibly near housing. Would a TIF and other incentives make sure the developer sees a profit or has a bigger profit?

Considering this proposal is part of a long process. See earlier posts about the troubled Charlestowne Mall here and here. Trying to revive a mall, finding a developer to significantly alter the property, and then seeing how it all works can take years. This particular mall may only be in the relatively early stages of this with years to come before residents and visitors see a transformed location.

Sears in Illinois began as catalog, became a department store, and ends in a suburban shopping mall

Sears has come to the end of the retail road in Illinois at Woodfield Mall:

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The last Sears department store in Illinois, which closes Sunday in the Woodfield Mall nearly a century after the retailer opened its first store ever in the Merchandise building, looks very, very…beige right now, in its final hours. Like beige on beige. Like the color of back-to-school Toughskins in 1974, the color of your uncle’s Corolla in 1982 and the color of linoleum at the DMV in any decade.

It opened the same day that Woodfield — named for Sears executive Robert Wood and department store magnate Marshall Field — opened in 1971. It was the largest Sears then, boasting 416,000 square feet of sales floor. From the looks of it in late 2021, it’s hard to imagine anything changed in 50 years…

At its peak, Sears, once the largest retailer in the country, had 3,000 locations, so naturally this Woodfield store is far from alone. Also dead after Sunday are Sears department stores in Pasadena, California; Maui, Hawaii; and Harrisburg, Pennsylvania. Long Island recently lost its last Sears department store; Brooklyn loses its last Sears on Thanksgiving Eve.

Indeed, seeing a Sears department store still serve as the anchor for a large mall right now is like a window into just how stormy and unmoored from the 21st century the American shopping mall has become. Sears sits at the south end of Woodfield, while JC Penny is at the northern end; Macy’s and Nordstroms occupy port and starboard sides.

There is a lot that could be lamented here (and is suggested in the piece): the experiences of many shoppers and employees, the connection of Sears and Chicago, bustling shopping areas now languishing, memories of earlier eras.

I find it interesting that the last Sears department store in Illinois closes in a shopping mall. And this is not just any mall: this is Woodfield, one of the largest in the United States, center of the fast-growing edge city Schaumburg. Department stores hit their stride in central business districts in the United States where rapid urbanization helped fuel consumer activity. But, the geography of business shifted as the population shifted to the suburbs. Department stores continued but now as anchors for a full range inside shopping experience primarily accessible by car. While suburbs are still growing, shopping malls are struggling and the fate of their department stores have both contributed to this decline and been affected by it.

The Internet may have hastened the decline of department stores but I wonder how much the move to the suburbs already weakened them. Stores need shoppers and it makes sense to move department stores closer to those shoppers (and other consumption opportunities). At the same time, the department store in a mall is different than the multiple floor downtown department store. Thinking along the same lines, how different are local stores, Sears, Walmart, and Amazon over time – which is the bigger jump and which factors mattered the most for the shift?

Thinking ahead, could the experience be recreated by putting a new Amazon store in the same spot? The location and infrastructure of the current setting is hard to beat. Shopping in person is still an important experience for many people even with Internet sales.

“The suburbs are going to be hot” – but shopping malls maybe not?

The CEO of Simon Malls is bullish on suburban real estate:

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Adding to the pressure has been the migration back to city centers of a segment of the country’s affluent people. But David Simon, son of the company’s founder and CEO, said on a conference call with Wall Street analysts Monday evening that trend had been overblown.

“All of the urbanization two, three, four years ago, the question was, Why are the suburbs going to exist? Everybody is going to live in urban environments, yada, yada, yada,” Simon said. “I’m telling you the suburbs are going to be hot, and our quality real estate is going to be where the action is.”

Putting aside data proving the rebirth of city centers over the last 20 years, even if there is a boom in the suburbs that are home to Simon malls, the bigger question is whether the developer can reinvent those properties adequately given retail’s changed landscape…

For now, Simon seems to be holding its own. After a difficult spring in which many of its tenants, notably Gap Inc., withheld rent while stores were closed for weeks on end, Simon has collected 90% of billed rent for the past three quarters. The company reported today that it has given tenants about $400 million in rent abatements and another $310 million in deferments.

It will be interesting to see how this plays out. Multiple issues need to be resolved:

  1. Can the retail market steady or rebound? Will the problems of COVID-19 keep going or permanently push shoppers to online platforms?
  2. Can malls both shift their focus from retail to other uses, including food, entertainment, community spaces, and residences, quickly enough even as they search for the magic formulas that will keep people coming in?
  3. Will many malls face big problems while some in wealthier areas and with deeper pocketbooks survive?
  4. Might a growing suburban population boost the chances of all malls?
  5. Is the shopping mall a destination of the past? For a few decades they were an exciting place but now no longer have the same buzz.

Given all of this, I would not be so optimistic. Perhaps Simon has a big plan and thinks it can revive their malls. If people are interested in the suburbs again, there might be a glimmer of hope: make some strategic changes at certain malls, become a destination in a way that single-use suburban properties cannot easily match, and try to capitalize on land that could be valuable because of its location.