Other companies had a problem: how to acquire the rights to lay fiber from one end of the country to the other.
Some very smart person realized you could lay the fiber in the old pipes.
Question: what can be done with all that retail space? Is there a new use of space that will come up?
Related question: what are the properties of malls that we might use? (parking, close to residences, easy to walk through)
It's really a fantastic space, and it was basically empty just a few short years ago.
That said, its model is not necessarily a solution to suburban mall decay, as it was already part of a dense downtown with a growing residential population and a captive workday population that often uses the arcades as a walkway between Euclid and Prospect.
Many malls will never recover as the US simply has too much retail square footage. Along with that, they're not so great with property tax efficiency, where historic main street districts easily outperform them. There's a Strong Towns article out there somewhere about the subject (probably this one: https://www.strongtowns.org/journal/2018/4/23/bon-ton-gone)
crazy guys video, it still mostly looks like this:
I'm so glad we opted for the William Gibson distopian future. A Mad Max apolocalyptic hellscape would have been terrible for my skin.
If they can't attract traditional retail tenants, some dead-mall owners have resorted to transforming them into community event centers, offices, or even apartments. I don't know about the profitability of apartments but the community centers do not make enough money relative to the expenses of property taxes and upkeep. The mall is still dying.
The other option is for a new buyer to purchase the mall solely for the land value and demolish the buildings. Two malls in my area were demolished. One was replaced by a Wal-Mart supercenter with some adjacent strip malls sharing the same large parking lot. Another mall was razed and replaced by a Target store. The Wal-Mart and Target have drawn more shoppers than the dead malls they replaced. This is the free market telling us that the locations were commercially viable but the retail configuration (the indoor mall) was worthless.
But previous zoning proposal that were ballot initiatives got defeated (hurray democracy) and it's required a state bill to force the city's hand for zoning. (https://www.mercurynews.com/2018/04/02/community-reacts-to-d...) But still no agreement between the city and the developers.
I'm sure most malls will be trivial to rezone as cities would rather have something paying taxes rather than nothing but that's not the case everywhere.
Building density housing is cheap compared to building the schools, parks, fire, police stations, and transportation to support the new density housing.
And to close the circle, Prop 13 makes it impossible for towns in California to tax residents enough to pay for the required parks, schools etc. There is an obvious solution (repeal Prop 13, and bump local property taxes enough to cover the infrastructure the new residents will need) but it's politically infeasible.
Are developers expected to build those? Don't cities build roads, schools, parks, and police stations with the tax income from the people who live in the houses?
We've had this problem with developers as well - they want to build mega high-rise apartments with no parking whatsoever and force the city to deal with it, despite the city struggling to fill current transportation demand.
Sure, maybe. Offering to build them for the city is a great way to build goodwill for your project.
If you want to see the ridiculousness of building in the Bay Area, however, you only need to compare this project with another large project proposal somewhere else:
This is nearly the exact same size parcel as the mall in Cupertino. But they are proposing 10,000 housing units and 13 million square feet of development (5x as much). The article calls it "surprisingly low density". But the plans include a new transit station, new roads, many acres of public space, etc. What it will come down to, though, is that the city will say "if you build this, we'll build that". The elementary school that will serve this development is already under construction. So it's likely that the developer will pay for at least half of the train station - it would be significantly more expensive than a school because it is underground at that point.
The U.S. Department of Housing and Urban Development (HUD) defines "affordable" as housing that costs no more than 30 percent of a household's monthly income.
"WTF is this doing here with all this insanely expensive land and such!?!?!"
I would half expect the bulldozers to show up with 10 minutes notice or something. I was driving around all amazed by "OMG I know all these cool companies!" .... "What the hell...."
Although both pay property taxes and both require utility services like water, sewer, and waste collection, non-residential properties attract both in-town residents and outsiders from other jurisdictions, who then typically spend some money in your town. Meanwhile, residential attracts new residents, who may or may not take jobs in your town, could be spending money in other towns, but need high-cost social services like public schools and community programs in your town.
I honestly don't think it can. I've seen them turned into office spaces, but it's really not an efficient use of space and the lack of sunlight/windows just makes it depressing.
As far as demolishing goes, most malls really aren't in areas where the space for parking is needed. If they are, then that land is probably highly valuable anyway.
That is definitely proof that good space can be built out of it, but are there enough companies who want to build spaces like that compared to the number of dead malls? There are a lot of dead malls. The ones I've seen are much more corporate-like.
That's the tricky bit in physically-routed infrastructure: pipelines, canals, rail, expressways, media (vs. transmission-based) comms links. None of them abide well with airgapping.
The comms-transport link goes back at least to the rail era when telegraph lines sprang up along them. You might have heard of one such venture: the Southern Pacific Railroad Internal Network Telecommunications, better known as SPRINT.
A delivery-based fulfillment service, say, Amazon, might have interest in some (though hardly all) of these as local distribution hubs.
Rezone and densify, and build a mixed use walkable community of residential commercial and office.
Now if only there were some way to do that with people, not just with stuff (cough mumble public transit cough).
I always thought a good repurposing of these buildings would've been:
-Skate parks or other athletic venue (maybe a gym if the building was the right size?)
-Intermittent Rental for Parties/Weddings things of that nature (you setup you break down, just an empty building to host a party)
I guess the rental idea could be used for a number of practical purposes if one had an idea that they thought it would be good for.
edit: this is a moot point now, but back in the late 90's and early 00's Houston had a serious lack of skateparks which is no longer an issue. Luckily im now an adult and dont really have the time to make use of them like i would've as a kid
a.) San Antonio/El Camino outdoor mall rebuilt as mixed used retail/residential
b.) Sunnyvale Town Center mall - mixed use retail/residential?
c.) Cupertino Vallco Mall - in litigation/negotiation for mixed use retail/residential
d.) some 50 year old movie theaters with huge parking lots on the edge of existing Santana Row mixed use development were torn down recently to make room for more mixed use development
Probably, but it's fun to think about.
> In the real world it's going to be sleazy and run down in a few short years.
Sleazy is desirable to a point, but it's easy to go too far in that direction. And getting run down is a definite concern. It's entirely possible that the economics required to keep the place safe and hygienic would price out a lot of customers, and it would struggle to do enough business to stay afloat. Which is actually not so different from the current situation, but at least it's interesting.
> I'd also like to be at the city council meeting where you propose adding hooker hotel rooms in the original plans.
We're gonna have to do it in a very progressively liberal area, or get Kevin Bacon to do it.
In my experience, liberal areas are only permissive when it comes to national policy. When it comes to changing anything significant about their "historic" neighborhoods, you're going to fight tooth and nail with everyone. They'll find an endangered bird species that nests near your old mall to slow down development.
So, basically, "don't bother coming here because you can't leave"?
You'd need to make sure it was either accessible by public transit, or that there's cheap and effective semi-public transit like Lyft or taxi cabs - and it has to be cheap and effective for two trips, since you'll have to come back to pick up your car in the morning.
Then they should offer up sleeping accommodations, too.
While I know that in most places, you legally can't serve someone who's already intoxicated, in practice few people go to a bar to get slightly tipsy. If I'm going for a night out, I'm not going to be ready to drive again until morning.
In contrast, the failed Borders across from AT&T Park became a bowling space.
On the malls note, the Chapel Square Mall in downtown New Haven got turned into apartments before I moved here. It's weird and seriously depressing looking, though I haven't seen the interior courtyard area myself. There has to be a better way to do it than this:
If anyone's curious to see the location on google maps/satellite, this is just behind the Omni New Haven hotel, the row of skylights is easy to pick out.
I think my closest one is >2 hours away in Woodbridge, NJ. Used to live in PA and had a Wegmans, so it bums me out. Stop 'n Shop isn't the same.
The Taunton mall is actually kind of fun. The run-down nature means that there are funky little stores you wouldn't see in a more upscale mall. But on the other hand it's also half-shuttered.
: < https://en.m.wikipedia.org/wiki/Gruen_transfer >
concentration camps for children
I went to the Skechers store. There were 4 people working. Not a single one ever offered to help me. I had to walk up to the counter and the girl looked shocked when I asked her to get me my size to try on. She handed me the box and walked away. I never saw her again and walked out without making a purchase.
I went over to Macy's to the men's shoe section. The section was about 5x the size of the Skechers store. There was one person working who was busy with a customer at the checkout. After waiting for 10+ minutes with no one to help, I left without ever trying on a pair of shoes.
Then I went to Ecco--they are a small shop with only a small number of shoes. While the salesperson was quite attentive and helped me out, the one pair of shoes they had in the store that were interesting to me didn't fit right so I left.
Tried to go to one more store only to discover that this particular location only carried women's shoes.
All told, this adventure had me in the mall for about 90 minutes and I had managed to try on 2 pairs of shoes. Throw in the drive and it was over 2 hours for nothing.
I went home, spent 20 minutes on Amazon Wardrobe, and I have 8 pairs of shoes in my size arriving at my house in a few days to try on.
Stores in a mall have a real opportunity to win on personal service and instant gratification. Hire someone to help me find shoes that fit me well and go with my own sense of style and who makes sure I go home happy. But if my choices are spend over 2 hours for nothing or go online, I'm choosing the latter every time.
1) Are you incapable of finding the right size shoes yourself? The boxes are usually laid out fairly logically and it's pretty rare for there to actually be anything of use "in the back".
2) Hiring people to provide the level of service you're asking for would significantly increase the cost of labor over the minimum wage kids that usually staff these stores. I'm fairly certain the cost increase would guarantee the store goes out of business with the razor thin margins they usually have. Put another way, do you really think paying 50% more for higher quality employees would guarantee 50% more sales revenue?
A big reason online shopping wins is because no one has the expectation that an actual human will help them purchase things, and the labor and rent costs are tiny in comparison to retail.
Having large feet, its pretty common for shoes not to have something in my size in the front, but maybe 50% of the time there are shoes in my size in the back.
The best places will understand immediately - some will even know off-hand which ones they have in larger sizes. Most of the time, the rep will respond with an awkward laugh and ask if there's a particular shoe I'm interested in.
At that point, I'll pick literally any random men's shoe and ask them to bring it to me in a size 14. When they return, either they'll come back with a couple pairs of shoes in my size (not the one I asked for), which is great, or they'll come empty handed and I'll ask again, if they can bring me (or point out) everything they have in a size 14, which will generally end up being 2-3 pairs.
How often does someone walk into their store and ask them to bring all of a single size to the front? Once they go to the back room to try to find boxes with the number 14 on them, they generally realize the issue.
I've tried going with the longer explanation, but the dance goes on regardless, and my version is the most abridged, thus far.
Instead I'll generally order a few pairs online and then send most back. It's inefficient and wasteful, but Zappos offers next day shipping free for members and an excellent return policy, which is hard to pass up.
Including places like Modells, Macy's, Payless, Sports Authority, etc etc etc
Maybe not as consumer-friendly as what I'm used to, but it sounds heavenly from the employee standpoint.
I think the main reason for either is whether the store is built one way or another.
In shops that require interaction to proceed beyond browsing (such as the shoe shops I visited yesterday) I want a salesperson to be attentive and help me so I can spend as little time as possible standing around waiting.
You say that as if it's possible in the same way as advice such as 'find a good lawyer'
1) Assumes that if you are helpful customers won't suck up an extraordinary amount of time and that it will pay off in the end (might not)
2) Assumes paying for a better person will result in more sales (may not)
3) Assumes qualified people even want this job (there may be none)
I am not disputing in a perfect world you are right and that better help you will end up with more sales and higher profit. But generally it's not low hanging fruit or very easy. Typically stores that do this well are more specialty stores where the workforce loves the product and will accept lower pay and likes to get the same questions over and over again. (Like an REI store or a bike shop ..) Also the margin on the product matters. Remember rent in malls is very high.
Uhh ... Did you forget what article you're commenting on?
Nordstrom Rack is a pretty great place to shop without asking for someone to "fetch" shoes for you as well, and they tend to have larger sizes and some decent shoes.
This was a trend that was evidently worth commercially exploiting at a time when malls were being built, but by the 1990s the demand for brand-name goods climbed upmarket enough that a new distinction had to be drawn between a mainstream mall and an upscale mall for this strategy to remain effective. New malls were built at great cost, and they took the most desirable stores, leaving the older wave of malls struggling for enough business to pay for renovations, maintenance, debt, and ROI. This cycle repeated at least one other time, when the outdoor, disassembled 'lifestyle center' became the dominant design pattern in the mid-2000s, by which point the narrative that malls are "dying" had become widespread.
Rather, the market has segmented to a degree that the concept is only profitable at the highest end, while lower offerings are proving uncompetitive with other forces in the economy, like powerful mainstream retailers with lasting appeal (e.g. Target), low-price leaders (e.g. Walmart), reliable stores with strong curation (e.g. Costco), and the convenience of ordering online (e.g. Amazon). Then, it's worth noting that the generation that's 18-35 now spends less of their income on clothes than the generation that was 18-35 when malls were big , and apparel stores are about half of a typical mall's occupancy.
Compare all this to Europe and UAE. Malls are doing great there. What's different? Just about everything, from the concentration of population and the particulars of siting that draws a higher proportion of people, to the value-add of having such a variety of shops under one roof, to less competition from non-mall retailers, and brand signalling still being a desirable goal.
No, retailers are struggling in the UK at the moment, there have been a number of high profile closures and restructurings. We haven't got the same capacity problems of the US but shopping habits are definitely changing.
Here's my suggestion. Fill them with Libraries, Gyms, yoga centers, Cafes, Restaurants, movie theaters, science museums, bike repair shops, ceramic hobby shops and indoor swimming pools, theaters and historic museums. That would get me going back in a heartbeat!
And for crying out loud, put those massive cement filled parking spaces underground. Replace all that extra space with Green trees, bushes, parks, bike lanes and outdoor gyms.
Also I'm not sure about the egalitarianism of the millenials. Millenials shop at Amazon, and we've seen article after article reporting on deplorable ways the company in treats its workers.
You must have missed Instagram... Consumerism is alive and well among millenials. Remember not everyone is a HN reader who works in IT...
Aside from libraries and (some but certainly not all) museums, aren't all of these examples of things that fit well within materialist consumerism?
I also prefer yoga studios, expensive coffee, fancy restaurants to specialty knives, clothes shopping, shoe shopping, and food courts.
But those sorts of personal preferences are just matters of choosing what to consume, which doesn't seem like a fundamental or important difference.
I've become convinced that clothing and shoe shopping is also "mainly about the experience" for many people.
I don't get it, and I'm happy to see enough others who don't get it so that there's a critical mass of consumers for the business that provide the things I enjoy to thrive. But I do believe it's a matter of preference (and perhaps also of environmental/economic impact).
what's the point of getting you back if all the largest of those things make little to no money?
malls aren't a contest to see who can get the most bodies into the smallest space. (and if it were, they'd lose to clubs and bars anyways.) they're a contest to see who can pack the most variety of businesses into the smallest space.
There are more than millennials alive. The malls are dead because it's not longer convenient. Clothing stores are now in neighborhood shopping centers. Not to mention the real killer: the internet.
Malls were incredibly well built and thought through. They were the crown jewel for many mid-size towns (perhaps next to sports stadiums). They boasted large, secure, climate controlled areas, often in places that had dramatic seasonal weather changes. They were a constant.
I think they represent a tremendous bargain, provided a good deal is struck, and someone knows what to do with the space. However, the window for this to happen is small. Spaces that are that large that fall into disrepair often are unsalvageable.
Thats not how all of the US works thankfully, but in huge parts of the country which are still doing the suburban sprawl thing, its a pretty common pattern. The nearest city which existed before the 1950s might be an hour's drive away, everything is new and purpose-built by large scale commercial developers.
Unfortunately, where I am in Eastern Europe, car ownership has risen high enough to make the creation of malls on the outskirts a viable business model. This has had the deleterious effect of now draining business from city centers (where, all these newly bourgeois car owners complain, there is insufficient parking), making once prosperous high streets into ghost towns. Basically we are going through the same historical period that many in Western Europe or North America now recognize as a big mistake.
This type of development is fueled by favorable up-front tax and accounting treatments for development, but it requires constant growth for the companies to survive. When you get to the back-end of the 30 year loans, you're paying principal on a depreciated asset... the bag of tax tricks isn't enhancing profit anymore.
The fact that the operators are desperate is a good thing -- they'll be bankrupt soon and useful redevelopment of these massive properties can start taking place.
By the early 2000s, when I was in high school, they were much more utilitarian. This was way before online shopping was killing their profits.
I'm assuming it had something to do with consolidation and the new owners trying to extract maximum short term profits.
Yeah, right, all you ostriches ignoring the advance of online retail for the last 15 years.
They could be almost self-contained; with housing, shops, entertainment, etc all under one roof.
My suggestion would be to rebuild the existing set of retail locations and target a group or niche to drive more traffic. For Example: Focus on Moms with kids from zero to 6. All the stores would cater to this group. You wouldn't see Athletic Shoe Stores or Abercrombie but store like Baby Gap, Carters, Gymboree or Children's Place. Add in Starbucks and a few other children friendly restaurants. Put in one or two play spaces for kids. Offer Free Babysitting if the Moms schedule appointments at a Yoga Center, Nail or Hair Salon. Make it a destination for Mom's to One Stop Shop for all their needs and a place where kids can play while they sit and watch or shop. Put in a couple of Pediatricians, Eye Doctors and a few Kids focused Dental Services. A Kids focused Movie Theatre and maybe even an aquatic center attached but for young kids. Make the entire place a destination. "THE" go-to place in town to shop for Moms with kids from infant to 6.
Or take an existing Mall and put in an indoor Skate Park. Fill it with stores catered to 16 to 25 year olds. Set the expectation that you expect Youth to "cruise" the locations. Add some security to make it safe and create a hangout where they will shop.
It seems like such a waste to not have something operating in there.
Perhaps something like an abandonment tax could accomplish this. Force owners to either sell it or use it. Even if they aren't using it optimally, just requiring some minimum usage to avoid a heavy penalty tax could go a long way to eliminating properties that are just tied up by someone hoping the value goes up eventually.
Sure, or an additional tax on unused or barely used real estate if we wanted to be targeted, but really I like the broad property tax.
>And you think that will make real estate more valuable?
No, I'm not trying to make real estate more valuable, actually I'm trying to make it less valuable by ensuring that the high levels of competition we see in booming real estate times carries over to the busts. If the costs are so low that people are just sitting on these properties and waiting for a magical moment when prices rise then obviously costs need to be increased to pressure these people to enter the market. Liquidity shouldn't drop when prices drop.
I won't be surprised if we don't see this happen...
It actually depresses the price of land, by socialising the positive value. But it also increases the available supply, paradoxically: given that land is price-inelastic, the supply doesn't change relative to price. Increase the carrying cost and the result is that landlords must sell or rent in order to cover costs. This is particularly associated with Henry George, though his work was based heavily on David Ricardo and Adam Smith.
http://www.ft.com/cms/s/2/392c33a6-211f-11e3-8aff-00144feab7... (Alternate: http://archive.is/iQMRn )
2) If yes, are they also failing?
"That’s proving difficult, with just a shallow pool of investors who are willing to take on a declining mall and even fewer who would pay what the landlords want."
How is that practically giving way?
You know what? I'll sell anything you can find in my garage for $2M USD. Anything and all things. Is that pratically giving away?
my favorite line is: and even fewer who would pay what the landlords want
alternatively, a journalist could interpret the situation with: "Investors face a drastic shortage of declining mall properties and are lobbying American legislators to ease restrictions on declining malls so that more can be made available."