STOCK QUOTES     More market data...

Opening up malls to create friendly feel of Main Street

By Julie Tamaki
Los Angeles Times

BRYAN CHAN / LOS ANGELES TIMES The Paseo Colorado center in Pasadena, Calif., mixes residential, retail, office and civic space in a pedestrian-friendly setting with courtyards open to the sky.

E-mail this article Print this article Search archive Most read articles Most e-mailed articles

Related stories Northwest mall projects have an airy feeling

Developers are tearing down or reconfiguring covered malls from Raleigh, N.C., to Columbus, Ohio, making room for outdoor centers that mix traditional retailers with big-box stores, high-density housing, stadium-style theaters, grocery stores and restaurants.

"Many people live in communities where there's not a main street where they can walk, window shop and meet people," said Ellen Greenberg, director of research for Congress for the New Urbanism, a Chicago-based nonprofit that favors pedestrian-friendly neighborhoods with a mix of housing. "What we're learning is people value that and miss it, which is why it's being imitated in these lifestyle centers."

Competition from discount retailers and shopping centers is also contributing to the de-malling trend, according to experts, as is the appeal of the open-air center to exposure-hungry retailers seeking more spacious digs and harried shoppers who don't want to schlep through an entire mall to make a simple purchase.

"These days, you either go for the experience ... or you go to Wal-Mart for the discount," said urban planner William Fulton, a senior scholar at the University of Southern California School of Policy, Planning and Development. "The regional mall is boring without bargains."

Although enclosed malls are not on the verge of vanishing — they continue to average higher sales per square foot than their outdoor counterparts — in recent years, more enclosed malls have been shuttered than have opened, according to a study by the International Council of Shopping Centers. From 2001 to 2003, more than 30 shopping centers, most of them enclosed, ceased functioning as malls.

The study cited competition from newer centers, loss of anchor stores and changing demographics as reasons for redevelopment. The council does not track the performance of newer, open-air developments compared with the enclosed malls they replaced.

Nationwide, only three large shopping centers — two of them enclosed — will open this year, compared with the 1990 peak of 19, most of them enclosed, according to council spokeswoman Patrice Duker.

Plans are also progressing this year for about two dozen so-called "lifestyle centers" that combine dining, entertainment and specialty stores in a smaller, outdoor setting. "Right now, they're the hot development trend," Duker said.

More regional malls, which have traditionally combined anchor stores with national chains and mom-and-pop shops, are ripe for conversion, according to the Congress for the New Urbanism. Agency officials say declining shopping centers, which it calls "greyfields," should be transformed into developments mixing residential, retail, office and civic space in a pedestrian-friendly setting woven into the community.

A 2001 study by the group and PricewaterhouseCoopers identified about 140 greyfield malls nationwide, with as many as 250 more approaching greyfield status.
 
Mature malls, with their dated facades and existing tenants to contend with, are at a disadvantage when it comes to attracting cutting-edge retailers, according to Aubie Goldenberg, a retail analyst at Ernst & Young in Los Angeles.

"With newer malls, the landlords are able to get the better tenants," Goldenberg said.

In Orange County, Calif., owners of the open-air Irvine Spectrum Center announced plans last fall to add a Nordstrom and a Target to their roster of tenants, a mix once unfathomable.

"Several years ago, you would not have heard Target and Nordstrom in the same breath," said Michael McCarty, president of the Community Shopping Center Division for Simon Property Group, the nation's largest mall owner. The company owns Northgate and Tacoma malls and recently announced its purchase of the open-air Factory Stores at North Bend.

The growing popularity of open-air centers is changing the way McCarty's company does business. Simon is building five shopping centers — all outdoor — one each in Florida, Indiana and Illinois, and two in Texas. It has no plans to build another enclosed mall.

"Does that mean we'll never do another enclosed mall again? I wouldn't say that, but today we have a lot on our plate. None of them are enclosed," said McCarty.