What Will We Do With Our Dying Malls?

City Creek in Salt Lake City.

City Creek in Salt Lake City.

The holiday shopping season is just wrapping up and that means a lot of people headed to the mall. But as is no surprise, fewer and fewer people are actually visiting America’s malls.

I’ve written before about malls, but The Atlantic Cities recently provided a useful, if gloomy, article about the future of brick and mortar retailers generally and malls in particular. The article basically states what everyone already knows: that people are shopping more and more online and less and less at malls. In other words, demand for mall space is evaporating and it won’t come back.

These mall and shopping center stalwarts are closing stores by the thousands, and there are few large physical chains opening stores to take their place. Yet the quantity of commercial real estate targeting retail continues to grow, albeit slowly. Rapidly declining demand for real estate amid growing supply is a recipe for financial disaster.

That pretty much describes the situation in Utah, where there are too many malls and high vacancy rates at older centers. And bafflingly, Utah is adding new malls all the time, with the Outlets in Lehi opening this year on the heels of City Creek in Salt Lake City. It boggles the mind. It’s especially odd that certain media outlets are basically running free PR for these places even as shopping centers down the street crumble and fail.

The Gateway Mall in Salt Lake City. When the City Creek mall opened down the street in 2012, the Gateway lost a bunch of major tenants.

The Gateway Mall in Salt Lake City. When the City Creek mall opened down the street in 2012, the Gateway lost a bunch of major tenants.

The Atlantic Cities article provides a more detailed analysis, stating among other things that 10 percent or more of the 1,000 largest malls in the U.S. will likely fail in the next decade. Many will be demolished. Others will be repurposed. It’s a bleak situation:

These malls are becoming ghost towns. They are not viable now and will only get less so as online continues to steal retail sales from brick-and-mortar stores. Continued bankruptcies among historic mall anchors will increase the pressure on these marginal malls, as will store closures from retailers working to optimize their business. Hundreds of malls will soon need to be repurposed or demolished. Strong malls will stay strong for a while, as retailers are willing to pay for traffic and customers from failed malls seek offline alternatives, but even they stand in the path of the shift of retail spending from offline to online.

Utah’s population growth will help stem the tide for a while. And a mall like City Creek could survive for a very long time because it’s propped up by the LDS Church and doesn’t actually have to make any money.

Provo's Towne Center Mall. This malls days are numbered, and that number is not very big.

Provo’s Towne Center Mall. This mall’s days are numbered, and that number is not very big.

But in the end the data — not to mention many people’s intuition — clearly indicates that malls are not going to be epicenters of vitality and prosperity in communities of the future. The cities that succeed will be the ones that figure out what to do with their malls so the transition to something different is smooth.

The mall-ish Riverwoods in Provo. The managers of this development are battling falling demand by hosting more and more events to draw people in. Many of the events are successful, but in between the area remains conspicuously underused. This development is also plagued by major design issues that almost completely undermine its attempts at mixed uses.

The mall-ish Riverwoods in Provo. The managers of this development are battling falling demand by hosting more and more events to draw people in. Many of the events are successful, but in between the area remains conspicuously underused. This development is also plagued by major design issues that almost completely undermine its attempts at mixed uses.

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3 Comments

Filed under Development, economics

3 responses to “What Will We Do With Our Dying Malls?

  1. Josh

    We’re lucky that you can’t buy great local food online. Restaurants are driving retail occupancy in our downtown.

  2. Pingback: Build Neighborhoods Out of Malls | (pro(vo)cation)

  3. Pingback: Can malls thrive as event centers? | About Town

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