How To Bring ‘Zombie Malls’ Back To Life

Over the past 40 years, malls have been on a slow, steady decline to irrelevancy. Back in the 1980s, there were about 2,500 malls nationwide. Today some 700 malls are still operating, according to Nick Egelania, president of SiteWorks. And he told the Wall Street Journal that only about 150 will survive over the next ten years.

That projection may be a bit exaggerated. Nonetheless, malls are fighting for their lives, with about one-third well along in their death march, having occupancy rates of 70% or less.

And the pace has picked up since the pandemic. Mall foot traffic has continued to decline, down 7% for indoor malls and 9% for outlet malls from 2019 to 2022, according to Placer.ai.

Hastening their demise, malls have been losing their anchors. Sears operated about 300 stores in 2019 and only about 40 today. Macy’s went from 649 stores to 510 locations at the close of fiscal 2022, and some 250 Bon Ton stores have shuttered.

“You can throw a rock and hit a mall that’s half empty these days,” quipped Andrew Brezina, principal at CRTKL, a global architecture, planning and design firm that works with both retailers and malls in designing spaces.

Regrettably, too many mall owners have ignored the inevitable, and while they talk mixed-use and adjacencies, they are figuratively rearranging deckchairs on a sinking Titanic and not necessarily doing the hard work needed to bring dead and dying malls back to life.

It starts with moving the mall from the suburbs back into the community.

“Mall properties have great access, great visibility, lots of space and utilities on site. They have good access to mass transit. They’re ripe and ready for redevelopment and repurposing,” CRTKL associate principal and architect Sarah Halstead shared with me.

Return To The Community

Malls developed during the flight to the suburbs in the 1960s and 1970s. They were built in open fields on the outskirts of town that were designed for people to come and spend their money.

Envisioned first as being retail-centric, they’ve taken steps to become consumer-centric, but that’s not enough anymore. Malls need to be community- and people-centric. Buying, shopping and spending money can’t be their primary reason for being.

“Centers must lean into what experiences they can offer that will get people to want to come back repeatedly and dwell. It’s got to be interesting and very specific to the local community and its unique needs,” Halstead said.

Community-centered malls will become hotspots or local hubs for all kinds of local activities. They must be neighborhood gathering places where people can shop and dine and have access to services like healthcare, gyms, co-working and living spaces.

Redesigning a mall requires engaging with the entire community and local governments throughout the planning process.

“Nobody wants to see big empty boxes in a mall, so there is a community need driving change. But sometimes, we find too many zoning restrictions placed on these spaces. City and local governments need to be more flexible. Sometimes it’s easier and less costly to build a new center from scratch than to remodel or repurpose an established mall,” Brezina said.

And flattening green space to build another new shopping center degrades the community in the process.

New Main Street

Main streets are as much social spaces as they are places to do business. That is the experience and feeling that malls must create.

“It’s the social aspect that people are missing. Malls must provide a familiar space that is walkable, breathable and a real connection point where people of all ages can come and gather. We have to design malls to help people connect more intentionally,” Halstead said.

One way to do that is to deconstruct existing malls, effectively turning them inside out by peeling away the walls and roofs to create a new main street that is fresh-air walkable for visitors. It may even allow some limited vehicular traffic to return to center courts. It turns the old indoor mall into a town center or a new retail high street.

“Opening an indoor mall up to become an outdoor mall involves major demolition that has to be managed carefully. But it can reinvigorate not just the mall, but the whole community by bringing in different types of uses than just pure retail,” she continued, noting that many malls started life as outdoor shopping centers only to be enclosed later.

“This just continues the cycle of a mall’s natural evolution,” she continued.

Reimagining The Tenant Mix

First and foremost, the community-centric mall must be a fun place to go, not just a place to shop. Dining options add an experiential element, but it needs more than that, such as park-like play areas for kids, interactive local art and museum exhibits, concert venues, lending libraries and sporting activities for various ages.

For example, the Seattle Northgate Mall has an ice skating rink where the Seattle Kraken hockey team practices so local fans can come out and support their team. And the facilities are also available to the community for skating lessons, parties and exercise.

While the Mall of America and America Dream Mall have super-sized entertainment offerings with indoor theme parks, such extravagance is hardly necessary or even desirable for most malls. They’re designed more for one-time visitors and can be more of a distraction that disincentivizes local guests. The needs and interests of the local community should be the guide to what activities are most appropriate.

As for the shopping offerings, malls need to mix it up with marketplace footprints, popups and activations to attract smaller tenants that need the support of shorter leases. Food halls and farmers’ markets should reflect local tastes, and parking lots are tailor-made to support local food truck operators.

“These developments need to combine shopping, dining, entertainment, the workplace, residential, medical, hospitality and hotelling, everything because they can do it,” Brezina exhorts. “Malls need to reach out and work with the local communities to find out what they need and deliver it to them.”

Mall As An Ecosystem Of Predator And Prey

As much as I hate jargon, I’m going to borrow the term of the mall as a ecosystem, credited to academic researchers Chung-yim Yiu and Yung Yau at the University of Hong Kong in their paper, “An ecological framework for the strategic positioning of a shopping mall.”

Their starting point is recognizing that malls serve two distinct markets with differing needs, specifically mall tenants and shoppers, and they operate in a dynamic environment involving the interaction of shoppers, retailers, competing malls and shops on the street.

“The retailing environment in a shopping mall is analogized to an ecosystem in which predators and prey coexist,” they wrote. “It is so complicated that the traditional theories of economics and models of business cannot be applied.” And they continued, the shopping mall model is “contingent on the interactive plays among shoppers, retailers and mall developers or operators.”

The predators in the mall ecosystem include the mall operators who “prey” on retailers through rental leases and retailers that “prey” on shoppers by selling goods and services.

The mall must indirectly attract its tenants’ “prey” because “it does not produce any goods or services directly consumed by shoppers.” It does this by providing “an ecosystem (a platform) for predators and prey to coexist and prosper.”

The researchers’ Darwinian natural selection “only the strongest survive” model provides a useful analogy to where too many malls are today: rapidly approaching extinction. To evolve, they need to adopt a community-centric business model designed of, by and for the people in the local community.

Malls must move back from the outskirts and into their communities as vital parts of the local economic, cultural and social ecosystem. Then people will want to come there and malls will be able to supply the necessary “prey” for their tenants to feed upon.

“The mall acts like an agent who facilitates transactions between and stimulates the satisfaction of two stakeholders, namely retailers and shoppers. It is the presence of this synergy that makes a mall successful,” the researchers concluded.