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Posted Nov 3, 2012, 2:34 AM
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Registered User
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Join Date: Aug 2002
Location: Toronto
Posts: 52,200
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Revitalizing a Dead Mall (Don’t Expect Shoppers)
Read More: http://www.nytimes.com/2012/10/31/re...vaREE0WxEQlwg&
Quote:
SAN ANTONIO — Where others saw an abandoned shopping mall with weeds growing in the parking lot, graffiti on the walls and homeless men camping out in what was once the food court, Graham Weston, chairman and co-founder of Rackspace, a Web hosting company here, envisioned a corporate headquarters.
- Today, his idea to move his company to the very mall where he got the blue ruffle tuxedo he wore to his junior prom seems more innovative than insane, with 3,200 Rackspace employees keystroking in cubicles set up where retailers like J. C. Penny, Zales, Casual Corner and Piercing Pagoda used to be. The project suggests that there might be hidden opportunities in the nation’s glut of dead and dying malls and represents one of the country’s largest and quirkiest recycling efforts.
- As ruefully documented on the Web site Deadmalls.com, the recession has shuttered scores of enclosed malls in the United States, and estate analysts at the CoStar Group predict that at least 10 percent of the remaining 1,500 malls will fail in the next few years. This is despite recent improvements in retail sales, because shoppers these days are more likely to visit free-standing stores or strip centers than invest time and effort entering and navigating a mall.
- Most dead malls are razed, but some have been repurposed, like the Penn-Can Mall in Cicero, N.Y., which now houses several auto dealerships. Malls in Florida, Massachusetts, Michigan, Mississippi, New Jersey and Ohio have become mixed-used spaces, incorporating apartments and unconventional tenants like government offices, churches, medical clinics and satellite university campuses. Rackspace’s mall conversion, though, is unique in that it is the exclusive owner and occupant.
- Rackspace agreed to pay $5 million for infrastructure improvements and also promised to make payments in lieu of property taxes to the local school district in an amount equivalent to what the district received when the mall was vacant. The Rackspace Foundation has also donated $2.5 million to the community, money that has gone primarily to the schools. Moreover, the company has spent in excess of $100 million to transform the mall from an eyesore into an eccentric work space with a $40,000 two-story slide, a chessboard the size of a basketball court and conference rooms named after popular television game shows and breakfast cereals.
- Shops and restaurants now encircle the mall, hoping to lure Rackspace employees, whose average salary is $69,000, far above the local average of $37,000. Stratford Land, a real estate development company based in Dallas, purchased 111 acres nearby in January, promising to build restaurants, shops and multifamily housing for Rackers. “We feel blessed and fortunate to have the right space at the right time for Rackspace,” said Rafael Castillo, Windcrest’s city manager. “They’ve given us a sense of stability and opportunity going forward.” Windcrest’s tax revenue has increased 10 percent every year since Rackspace acquired the mall, and the city expects to be debt-free by 2014.
- And in the next few months, Mr. Weston said the company would break ground on a neighborhood park that would encompass several acres surrounding the mall. The design will include gardens, playing fields, jogging trails, a cafe, water features, outdoor art, a performance venue and a dog run. “Our headquarters is a representation of our values as a company,” Mr. Weston said. “We are ambitious, we are expansive, and we are unorthodox.”
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