10 Principles for Rethinking the Mall

June 1, 2007
The traditional rules of mall development are fading, and these 10 strategies from the Urban Land Institute are key for developers who are trying to revitalize existing malls

The shopping mall is the quintessential American contribution to the world's consumer culture. It has been praised by the millions who find an unmatched selection of fashion and specialty merchandise in its climate-controlled splendor, and it has been vilified for promoting both suburban sprawl and the decline of downtown shopping districts and mom-and-pop stores.

The conditions that led to the creation of shopping malls and sustained them for decades are changing rapidly: The market for malls is now mature and, because most markets are saturated, only a handful of new malls are under construction at any one time. Because most malls are now decades old, the stock of centers is aging rapidly. Specialty, boutique, entertainment, and lifestyle retailers are taking away business at the experiential high end; big-box, outlet, and Internet shopping are taking away business at the value-oriented low end.

In response to competitive and community changes, the action in the shopping center world has shifted from new construction to rehabilitation, repositioning, and intensification of uses at existing malls. Exciting and innovative shopping environments are being created from the bones of older malls. The old rules of mall development are breaking down rapidly as developers rethink what the mall could be.

Here are 10 principles for rethinking how malls can meet the competitive challenges they face and evolve into more sustainable community assets.

1. Grab Your Opportunities or They Will Pass You By
Opportunities for change arise from a range of factors affecting a mall: the market, consumer tastes, retailer direction, corporate mandates, and municipal objectives. The need to rethink a mall becomes most apparent when anchor stores become vacant. Because such vacancies lower the number of potential customers, they have an obvious impact on the health of a mall. But, stores may be vacant for a number of different reasons: retailer difficulties at the corporate level, a desire for a new physical format, or a decline in local market support. Only the last scenario indicates a failing market; the others may occur in any type of market. A weak market requires a different response than a strong market.

Opportunities for change also arise from market growth, retailer mergers or acquisitions that lead to repositioning and rebranding, corporate decisions to buy out land leases and gain more control of the mall site, or public-sector decisions to revitalize or redevelop the area in which the mall is located.

2. Broaden Your Field of Vision
The enclosed mall has been the greatest machine for consumption that the world has ever seen, but the machine is creaking because it has not kept pace with changing consumer preferences. As mall developers rush to refresh and redevelop obsolete malls, there is a tremendous opportunity to think big, expand the field of vision, and break away from the "island" syndrome. Look beyond the borders of the mall property when envisioning what can and should be undertaken.

Exploit the mall redevelopment opportunity by creating a vision for the entire district. Look for and capitalize on opportunities to expand the investment into surrounding residential and commercial neighborhoods to strengthen and revitalize them. Identify synergies with other development opportunities.

Integrate the mall site with other community anchors (cultural facilities, civic buildings, municipal parks, etc.). Integration can increase the market draw, expand the trade area, and create a more compelling destination.

3. Unlock the Value of the Land
An old mall site should not be viewed as a problem, but as an opportunity to move forward and embrace today's best practices in retailing and land development.

Consider an innovative mix of uses to move beyond the predictable and create something exciting (think about nontraditional retail uses). Mixing tried-and-true retailers with more distinctive (even local) retailers creates a broader market for the project. National chains provide a level of comfort and distinctive stores provide excitement and a reason to visit a particular mall.

4. Let the Market Be Your Guide
Your project may have interesting architecture, top-quality streetscaping, and a multi-use environment; without customers, however, stores will falter and the project will fail. Market realities differ among communities (and among locations within communities). There may also be a difference between what the community wants and what the market can support. Local government, citizens, and the private sector all benefit when the particular market forces are acknowledged and the focus is on achievable expectations. Success requires market potential. Market evaluation provides the answers to two vital questions: What type of retail project can the market support? What size could the project be?

Investigate the market for other uses that could be brought in. Many mall sites are well positioned for higher-density and mixed-use development. Evaluate office, residential, and hotel markets to determine their relative strengths and what might be an appropriate mix, and assess how the different uses might support each other, whether through the ambience created or the market support generated.

5. Create Consensus
While it is impossible to make everyone happy all the time, agreement on how to move forward is necessary to get a project done. The interaction may initially be characterized by disagreement and contention, but these characteristics are the very ones that can make the process creative.

Consensus starts with realistic goals that match the needs of the community with the realities of development. The goals are expressed in a vision for the site that everyone understands and agrees to. The more effort that is put into creating this vision, the more smoothly the rest of the process will go.

Create forums to educate stakeholders about each other's needs and desires. Whether the issue is the type of stores, the color of the buildings, or how traffic will flow, everyone has different views of what is needed in the community and how to achieve it. The more opportunities people have to share their views, the better.

6. Think Holistically Before Planning the Parts
When planning to energize an aging shopping mall or help a vibrant one thrive, keep the big picture in mind. Start planning today for opportunities that could arise 5, 10, or 20 years down the road. A strong, sustainable strategy should also include a physical vision, a market-based merchandising strategy, a development program, a phasing strategy, a marketing strategy, a parking-distribution strategy, and a mass-transit strategy.

Look at all the financing options (tax increment financing, condemnation, enterprise zones, and federal, state, or local programs). Local governments can help facilitate development by providing fast approvals, infrastructure improvements, clear and predictable approval processes, and parking.

7. Connect All the Dots
The mall as an island - a retail venue surrounded by a sea of parking and set apart from everything except highways - does not meet the expectations of 21st-century shoppers. Today's shoppers demand a more urban experience - specifically, pedestrian-friendly streetfront retail. Transforming a mall into a "place" allows visitors to feel more comfortable as they move about within the development and as they move between the development and the surrounding community - with or without their cars. This comfort can be achieved through enhanced connectivity (improved road layouts and circulation patterns, shuttle bus service, strategically located parking areas and sidewalk connections, and signage and wayfinding that encourage internal and external movement).

8. Design Parking as More than a Ratio
Easy access, high visibility, a sense of personal security, and adequate, convenient parking are all preconditions for successful retailing. It's important to get the parking right, but getting it right means more than just ensuring the right amount of parking in the right place.

The place - not the parking - should be the destination. Parking should be visible and easy to find. Arrival at the parking facility is the visitor's first experience of the environment; the facility must be safe, comfortable, and well lit. Once the car is parked, the walk to the destination should be enjoyable. The transition from parking to other uses and back is integral to the total experience.

Instead of providing surface parking within the development site, explore the option of creating a pool of public garage parking and requiring that new development purchase parking at cost from the local government's pool of parking garage spaces.

9. Deliver a Sense of Community
Today, the success of a shopping mall depends as much on the feeling of community that the mall creates (and the quality and character of its public realm) as it does on the quality and character of the shopping. As the mall becomes more of a community center, it takes on the role of a "third place" (a gathering spot where people can interact and spend time with others in an environment that is neither work nor home).

Today, the most successful centers provide: 1) a diverse mix of goods and services that serve daily needs and specialty/fashion needs; 2) places to gather, explore, or people watch; 3) services that enhance lifestyles; 4) the opportunity to accomplish several errands in one place; and 5) civic features that every community needs.

10. Stay Alert, Because the Job is Never Done
Rethinking the mall is a continuous, flexible, and dynamic reinvestment process that must support the ever-changing vision of the stakeholders and the market. It is impossible to cater to Americans' changing shopping habits by using a cookie-cutter approach: There is no formula for producing the next generation of malls. Each choice needs to be carefully considered within the context of the overall vision and the market. Whether the situation requires ripping the roof off of an enclosed, conventional mall or greening a parking structure, consistently and repeatedly communicating the vision will strengthen the project's competitive position.

What are the new secrets of success? What will change the way you do business and put you ahead of the game? Keep a close eye on the markets that you serve and proactively lease to match the changing demands of these markets.

This information was provided by the Washington, D.C.-based Urban Land Institute, an organization that initiates research which anticipates emerging land-use trends and issues, and proposes creative solutions based on that research. To read the complete article, visit (http://www.uli.org/)

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