
The Economics and Nostalgia of Dead Malls - sytelus
http://www.nytimes.com/2015/01/04/business/the-economics-and-nostalgia-of-dead-malls.html
======
bluedino
I love how Rackspace took over an abandoned mall for office space. I think
it'd be great to see that happen more often.

Food court, lots of parking, usually good locations, many different size
parcels from huge (think a Sears) to small (RadioShack) that would be suitable
for businesses of many sized.

~~~
tbyehl
Imagine working in an open office space the size of a Sears floor. That's what
I see every time one of my Racker friends posts up a picture of their
workspace. Ugh.

~~~
msisk6
Take it from someone that used to work there -- it's horrific. The noise level
is unbelievable. All the technical folks live in their noise-canceling
headphones all day.

~~~
ChuckMcM
I'm surprised they didn't do anything for the noise. I have seen some really
interesting noise cancelling ceiling treatments if the ceilings are high. One
looks a bit like a kelp forest hanging from the ceiling only denser. The
"leaves" on the vertical vines form a noise capturing space so absolutely
nothing bounces off the ceiling.

~~~
msisk6
They tried various things like big fabric panels designed to absorb sound
hanging from the ceiling, special wall treatments, and moving desks around and
such around.

It's just a big space with thousands of people, many of them on the phone all
day.

~~~
ChuckMcM
Interesting, did they keep data on what they tried do you know?

~~~
msisk6
I don't know. I hope they do since they're always trying to improve the noise
situation.

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thex10
I won't miss them.

I just spent a few days in Seattle's downtown, pieces of which have a very
outdoor mall feeling to it. Ridiculous amounts of shopping clustered very
close together. Felt like way more fun than any enclosed mall.

Maybe part of it is perceived efficiency on my part (the window shopper) - I
felt like I can find more variety and competition in several square blocks
than in a typical mall.

~~~
cbd1984
Outdoor malls are nice in Seattle, where it constantly rains and nobody cares
because it constantly rains but you never get ice storms or mosquito-filled
summers with 110% humidity and 110°F. Transpose your idea to Missoula or
Dallas or Phoenix and it loses some luster.

~~~
pyre
On the same token, when I visited Orange County several years ago I remember
both enclosed, air-conditioned malls, and open-air malls.

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massysett
"With income inequality continuing to widen, high-end malls are thriving, even
as stolid retail chains like Sears, Kmart and J. C. Penney falter, taking the
middle- and working-class malls they anchored with them."

This has become a standard refuge of the press whenever businesses that target
middle-income customers decline. Must be income inequality. Never occurs to
them that maybe the failing retailers aren't delivering the value that their
customers expect. Malls are a pain. Drive to it, park far away, walk all over
the place, try to find sales help, stores are overpriced, have limited
selection, and the hours are limited.

Think of many of the products that used to be sold in malls: appliances.
Electronics. Fast food. Apparel. Many of these have other retail options
available that are less of a pain than the mall. Heck, Walmart is less of a
pain than the mall--and it has better hours. The mall closes at 6 or 7 on
Sunday and doesn't open until 10.

So no, "income inequality" has little to do with the decline of an expensive,
inconvenient retail format.

~~~
intopieces
>Never occurs to them that maybe the failing retailers aren't delivering the
value that their customers expect.

Could they not be expecting more value because their wages have stagnated?
Wouldn't income inequality be the reason that the customers require the
"value" to start with? Seeing as the affluent are willing to pay shopping mall
mark-up and the middle class isn't, doesn't that point to income inequality?

I'm just not sure why you view these explanations as mutually exclusive. The
middle class brands are dying because the middle class can't afford them
anymore. The wealthy would never have set foot in there to start.

~~~
massysett
In an America where the middle class have supercomputers in their pockets,
unlimited long-distance calling, cars with ten airbags, over a hundred
channels of television, 3D movies, abundant food, air conditioning in their
homes, and multi-gigabit broadband, I have grown increasingly skeptical that
the "stagnant incomes" narrative is accurate.

~~~
intopieces
>I have grown increasingly skeptical that the "stagnant incomes" narrative is
accurate.

This is a puzzling politicization of a topic that is basically uncontroversial
among economists. In fact, the only thing the experts can't agree on is what's
causing it[0].

Your analysis of the situation -- "Americans have too many toys to be
considered poor" \-- is staggeringly short-sighted. Rising cost of housing and
medical care in the face of stagnating wages is a legitimate concern on many
levels and informs the way our government crafts financial policy. It has huge
implications across multiple sectors, including and especially the vaunted
"tech sector."

What happens when no one can afford to save for college and they incur massive
debts? What effect does that have on the housing market, typically considered
the bellweather of economic health?

What happens when a generation (or more) never gets around to saving for
retirement?

What happens when a generation can't afford healthcare, even when its
subsidized by the government?

Income inequality is an important conversation to have; I urge you to not be
blinded by superficial indicators of wealth. Mainly for your own sake - your
retirement account is probably dependent on some crucial policy decisions
being made based on this discussion.

[0][http://www.pewresearch.org/fact-tank/2014/10/09/for-most-
wor...](http://www.pewresearch.org/fact-tank/2014/10/09/for-most-workers-real-
wages-have-barely-budged-for-decades/)

~~~
massysett
All that economists agree on is that the number of pieces of paper in an
average American wallet has stayed the same. The problem is that pieces of
paper in a wallet are not intrinsically useful. They're only useful because
they buy things. Since economists aren't asking what these pieces of paper
buy, they're not asking the right questions. It is, of course, much easier to
focus on dollars in the wallet, because that's easy to measure. Well-being is
much harder to measure, and economists aren't doing much to answer that.

"save for college" \- few Americans have ever been so privileged to save for
college, yet this has not stopped the ever-increasing average educational
attainment for Americans.

"save for retirement" \- also a privilege few ever had, which is why we have
Social Security. And I'm not going to cry much over the fate of retirees as
they enjoy their Medicare Part D benefits, allowing them to take drugs that
did not exist years ago.

As for income inequality, I have never regarded this as an important
conversation to have. Able has $100. Baker has $10. If inequality is the
problem, then a good solution is to make Able have $50 and Baker have $9. I
disagree that such an outcome would solve anything. It's a problem if Baker
can't get ahead. It's a problem if the system is rigged in Able's favor. The
mere fact that Able has $100 and Baker has $10 is not a problem. As someone
who is far from the 1% I can say that I will be no better off if the rich have
less and I have no more. Yet such an outcome would reduce inequality.

~~~
intopieces
>few Americans have ever been so privileged to save for college, yet this has
not stopped the ever-increasing average educational attainment for Americans.

Americans didn't have to. They could pay for it with a part time job. But the
cost of college has risen far faster than wages, helped by cheap student loans
from the government.

>Which is why we have Social Security

Social Security will need to be vastly expanded to keep up with an aging
population. With a new generation having no pensions, retirement savings or
property (student loans in lieu or mortgage), the next "middle class" doesn't
look like much different than the working poor of today. The cost of living is
not going down.

The concern with income inequality is not that the rich are getting richer,
it's that the middle class is getting poorer. And this has a ripple effect
both inside the economy and into other areas: the justice system, politics,
public safety.

Lots of people can afford to ignore it now. It doesn't look like that is going
to last, however.

~~~
greggyb
> They could pay for it with a part time job.

Still can. I graduated within the last 5 years. My sister and I both waited
tables throughout college and got out of undergrad (and for her, also a two
year grad program) without debt.

I lived solo, bought a car, and went to state school in that time. I came out
with enough of a savings buffer for a ~1 year job search.

State school, ~20-30 hours a week waiting tables (worked summers at a summer
camp for less money than waiting).

What you can't do is pay sticker price at a private university, but that's a
red herring because almost no one pays sticker.

The average debt of a student coming out of undergrad in the US is <$30K[0],
and the median income is $45K[1].

Please, have your way with my anecdata, but I'd be much more interested in the
argument that a $30K debt load for someone earning $45K is crippling.

[0] [http://www.usnews.com/education/best-colleges/the-short-
list...](http://www.usnews.com/education/best-colleges/the-short-list-
college/articles/2015/02/17/10-colleges-that-leave-graduates-with-the-most-
student-loan-debt) (average is in the sub-headline)

[1] [http://time.com/money/3829776/heres-what-the-average-grad-
ma...](http://time.com/money/3829776/heres-what-the-average-grad-makes-right-
out-of-college/)

~~~
intopieces
"It wasn't a problem for me, so it's not a problem for anyone." Your scope is
too narrow. You're leaving out what else that $30k could have gone to - a down
payment on a house, for one.

You're also refusing to consider the effect this kind of arrangement has on
the future economy. With an upper class that seems averse to taxation, whose
going to pay the social security for the generation with no assets?

The equation is so much more complex than "just go to state school." You
ignore that complexity and choose smug criticism.

Student loan debt surpassed credit card debt and defaults got so bad (almost
14%) the Obama administration had to step in and change the program. The genie
is out of the bottle and what students "should have done" (feasible or not) is
irrelevant.

~~~
greggyb
> Please, have your way with my anecdata, but I'd be much more interested in
> the argument that a $30K debt load for someone earning $45K is crippling.

I was not offering a solution or even saying there are no problems.

I was addressing a bold claim that Americans _could_ once afford college by
working part time, with the strong implication that this cannot be done
anymore.

I am not refusing to consider anything, and my scope was clearly defined by
the claim that I quoted and to which I offered a refutation.

Moving the conversation broader, you raise several issues. These are not
relevant to the claim made and addressed.

You have inferred that my post is smug criticism of real issues that exist
(some of which you have touched on). That was not my intention, and I promise
I did not feel smug in responding.

The only point you've raised that addresses my post around student debt is
that the average $27K of debt that students graduate with could have gone to a
down payment on a house. Ignoring the fact that real estate for residence is
historically a terrible investment, how would $27K of debt somehow convert to
a down payment? A down payment comes out of savings. The fact that a
graduating student has debt implies they didn't have the cash to put toward a
down payment. With the return to college still being large and positive, I
would argue that this debt is typically well worth it.

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mjevans
I agree with the over-retailed aspect. Actual retail could mix very
effectively as a lining along pedestrian paths, with domiciles above for a few
tens of stories.

This would pretty much also kill the concept of malls as it would be a return
to the shopping arcade; in fact I'd prefer it if combustion motors were banned
along the arcade and it were actually properly enclosed.

~~~
cbd1984
If the arcade is enclosed and cars are banned, that's a shopping mall. That's
what that is called.

You might have housing in there, but it would be living in a shopping mall.
Something which somehow hasn't taken off.

~~~
ghaff
There are cases where housing is attached to malls. There some at Copley in
Boston and Santana Row in Santa Clara, while not an enclosed mall, is a mix of
retail, restaurants, hotels, and condos.

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fineIllregister
> About 80 percent of the country’s 1,200 malls are considered healthy,
> reporting vacancy rates of 10 percent or less. But that compares with 94
> percent in 2006, according to CoStar Group, a leading provider of data for
> the real estate industry.

And how many of the malls that were open in 2006 are still open? Seems like
percentages are the completely wrong number to use. Also I found that graph
made very little sense.

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n0us
In my home town of Lynchburg VA the indoor mall just outside of town was on
the decline so the nearby Liberty University nearby bought most (if not all)
of it and turned it towards classrooms, and other university purposes. There
is still a large movie theater and besides not agreeing with many of their
principals it's nice to see something not go to waste.

------
lolptdr
I'd say this is a good thing for the future small to medium sized businesses,
assuming the mall management and owners drop rental and kickback prices that
were gouging bigger retailers. Online shopping is the future and the malls
will need to adapt or die.

