America is Over-Retailed - Too Many Stores

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Revitalizing a Dead Mall (Don’t Expect Shoppers)

Read More: http://www.nytimes.com/2012/10/31/re...vaREE0WxEQlwg&

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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4 Reasons Retailers Don't Need Free Parking to Thrive

Read More: http://www.theatlanticcities.com/job...g-thrive/3978/

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1. Free, plentiful parking often hurts more than it helps. Retailers prefer an abundance of cheap or free nearby parking because they believe that given the choice between a store with parking and one without, drivers will choose the one with it. In some respects they're right, particularly as one moves away from the central city and established lines of alternative transport. However free commercial parking, especially in the city, has several downsides too.

A true "free" parking spot can be quite expensive, and when it's offset by higher retail prices, those who drive get a subsidy and those who don't get an additional cost. This incentive to drive pressures local authorities into shifting resources and space toward roads (instead of transit) and parking (instead of additional retail developments). It also creates congestion, particularly when on-street parking is involved.

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2. Shopkeepers overestimate how many customers arrive by car. If you ask retailers why they want free parking, they will answer that most shoppers drive to their stores. However that perception doesn't square with the numbers. On the contrary, available evidence suggests that more people reach town centers by transit, walking, or biking than by car, according to the London Councils review.

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3. They also overestimate how much car customers spend. When people reach a shopping center by car, they do tend to spend more on that single visit than people who get there by other modes. The 2011 survey found they spent, on average, 41 pounds per visit, compared to 26 pounds for walkers. Over the long term, however, those figures favor non-drivers: in an average month, car shoppers spent 226 pounds, while walkers spent 373 and those who arrived by transit (239 for train, 282 for bus) also spent more.

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4. A mix of retailers is more important than parking supply. When you actually ask shoppers what brings them to a particular commercial center, as one recent survey of 2,000 London customers did, they rate mix of stores and general atmosphere more highly than parking and accessibility. An interview of visitors to 15 major town centers found that the range of shops and amount of traffic were the most important shopping factors, with only 6 percent citing parking — and this for outer London.

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[mhays]

In fairness, the article is about London, and the dynamics are very different in many other places, including all but some of the best urban cores in the US.

An apartment building can target a segment of the market, like those without cars. Some retail can do that too. But a sizeable destination retail area will usually try to gather in all of its tenants' potential customers, not just the ones without cars. With downtown retail that could be 1/4 of the customers but it's generally considered important and worth the cost (to play defense among other reasons).

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7 Uses for Failing Shopping Malls

Read More: http://www.theatlanticcities.com/job...ng-malls/4335/

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1. The Mall as Main Street

The bad rap on malls used to be that they made Main Streets obsolete. But with store fronts emptying out and visitors dwindling, some malls are planning redesigns that place walkability, public space, and outdoor hang outs at a premium. Take a look at this Seattle mall. This is what the mall looked like in 2007 (courtesy of the Sledghammer, which chronicled its decline and has a whole photo essay of empty flagship stores and bleak hallways).

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2. The Mall as High-End Condo

Similar to the mall-as-main-street concept, but with an emphasis on luxury living -- think walkable development, anchored in the shell of a mall rather than proximity to transit. This type of mall redesign was tried by the Natick Mall, a 40-year-old shopping center outside of Boston, in 2007.

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3. The Mall as City Hall

Talk about the intersection between business and politics. The former Echelon Mall in Voorhees, New Jersey, began losing retailers in 2000. By 2005, only a quarter of its spaces were occupied. Right around the same time, the Voorhees government was looking for a new home. Plans to build a new town hall had been rejected in the late 1990s, and voters dubbed the proposal a "Taj Mahal."

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4. The Mall as Park

When it was first built, the Columbus City Center was central Ohio's largest mall. But by 2009, the mall was largely vacant, a downtown eye sore that was, in the words of the Columbus Dispatch, "hurting efforts to redevelop the area south of Capitol Square and harming property values."

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5. The Mall as Water Park

Down an anchor retailer or two? Why not replace them with a slide and wave pool! That's the premise behind the company Flowrider, which sells wave pools to property management companies. This trend gave birth to one of the best sentences to ever appear in The New York Times: Where once people shopped for three-packs of underwear or sheet sets, they are now turning up in flip-flops and shorts to surf an artificial patch of ocean.

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6. The Mall as Performing Arts Venue

In 2009, St. Louis's Crestwood Malls decided to turn over its empty space to artists. One theater company moved from a church basement to its own rehearsal space, all for $100 a month plus utilities. Other dance studios, galleries and artists also moved in with the same rent deal. Some 60 groups signed on.

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7. Malls as...Malls. But Malls That Appeal to a Whole Different Type of Consumer

Some malls aren't experiencing a rebirth as much as a make-over. See, for example, "La Gran Plaza de Fort Worth, Texas." This mall's management group decided to completely reimagine its target audience with a focus on Hispanic immigrants. In addition to the name change, the website is in both English and Spanish.

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