DURHAM

The general manager at The Streets at Southpoint once held the position at a different Triangle mall: Cary Towne Center.

Cary’s once thriving mall, which opened in 1979, was reduced to rubble last spring after years of declining sales emptied it of tenants.

A decision this week by the Durham City Council may have saved Southpoint from a similar fate, Pat Anderson believes.

“Cary Towne Center was a very successful center, like Streets,” Anderson said late Tuesday night.

He started there in 1997. Southpoint opened five years later.

“When the competition opened, Cary needed an investment and that did not occur,” Anderson told council members. “I’ve lived that story. I’m appealing to you not to let this happen to The Streets at Southpoint.”

Southpoint is just a couple of years younger than Cary Towne Center was back then.

It’s fully leased most of the time and counts 11 million visitors a year. But it’s facing stiff competition, especially in Wake County, with Cary’s Fenton opening, North Hills expanding and mixed-use projects like Midtown Raleigh taking shape.

Southpoint has something they believe will prevent it from sharing Cary Towne Center’s fate: investors.

Investors are prepared to pour millions into building apartments, a hotel and offices, aiming to transform Southpoint before it loses its allure

“This is the next phase for malls,” Mayor Pro Tem Mark-Anthony Middleton said. “I want Durham to remain this region’s economic engine.”

Redevelopment plans for the mall

Southpoint’s owners, international developers Brookfield Properties, had to get a rezoning from the Durham City Council to make way for the project.

Brookfield asked for permission to rezone the 132-acre property to build up to:

• 1,382 apartments
• A 200-room hotel
• 300,000 square feet of office space
• 100,000 square feet of additional retail

The move could more than double the shopping center’s square footage and allow buildings up to 10 stories high.

There’s no firm timeline for the changes or map of where they’ll build, though another attorney said much of the growth would happen on the large parking lots surrounding the mall today.

“We are not prepared to move dirt tomorrow, but this will allow us to move forward with a multi-year plan,” Anderson said.

Why no affordable housing?

Tuesday night’s vote in favor of the rezoning was split 5-2, with Mayor Elaine O’Neal and council member Javiera Caballero voting no.

“I think what you have is better than what’s on the ground, and that’s compelling,” said council member Jillian Johnson.

Affordable housing was the chief sticking point. Southpoint doesn’t plan to include any, instead offering a $1 million donation to the city’s housing fund.

The Planning Commission shared concerns about the lack of affordable housing, voting 10-3 not to recommend the project in March.

“When I start to hear people talk about, ‘We’re going to put market-rate housing here and we’re going to put affordable housing somewhere else,’ that sounds a lot like a road we’ve been down before in this country,” Planning Commission Chair Austin Amandolia said in that meeting.

“Sounds a lot like segregation,” Amandolia said. “That’s wrong.”

Brookfield’s owners argued they couldn’t make affordable housing work financially for two reasons:

• The mall’s existence in a relatively well-off census tract precluded it from tax credits.
• Satisfying parking requirements would require building parking decks, which was too expensive.

No room to wait

Just as the Planning Commission did three months ago, a couple of City Council members asked if the developers could delay and come back in the fall with a stronger proposal.

Just as they did then, the suited men stepped away from the lectern and whispered among themselves.

And just as they did then, the developers said no. It’s a volatile market and waiting could lead them to lose investors, they said.

“This will allow us to continue to invest 100% private dollars and not have our hands out in a moment of weakness,” Brookfield senior vice president Jason Bonnet said.

“Time kills deals,” Anderson said.

This story was originally published June 22, 2023, 1:19 PM.

Mary Helen Moore

Mary Helen Moore covers Durham for The News & Observer. She grew up in Eastern North Carolina and attended UNC-Chapel Hill before spending several years working in newspapers in Florida. Outside of work, you might find her biking, reading or fawning over plants.

Once a fixture of American culture, traditional enclosed malls are continuing to struggle amid the rise of e-commerce and, more recently, the COVID-19 pandemic.

The Triangle hasn’t gone unscathed.

Northgate Mall in Durham closed in 2020 and is now being redeveloped. In 2021, Cary-based Epic Games purchased Cary Towne Center for $95 million, then demolished it to make room for its new headquarters. Raleigh’s Crabtree Valley Mall is up for sale. University Place in Chapel Hill and The Streets at Southpoint are hoping to defy trends by evolving into mixed-use developments with residential, office and retail components. (The Southpoint proposal, though, came under some piercing questioning from the Durham Planning Commission.)

Here’s a closer look at what’s in store:

Durham’s Northgate on verge of transformation

Backstory: Northgate Mall, opened in 1960 and enclosed in 1974, was a shell of its former self when the pandemic finally pushed its investment firm owners to close it for good in May 2020. The mall had been losing tenants for years and now sits largely empty on 55 acres north of downtown.

What’s happening: Northwood Investors paid $34.5 million for the mall in 2018 after threatening to foreclose on it the same year. The movie theater remains open, as do some shops across the parking lot anchored by Planet Fitness.

• Northwood’s retail team intends to redevelop the property as a life sciences campus, but neighboring residents have fought back. They want housing — preferably affordable — and a walkable complex with a grocery store, places to gather and better stormwater infrastructure.
• Northwood must get City Council approval for its plans. It hopes to start construction next year.

Side note: In 2017, Duke University Health System paid $4.5 million for the former Macy’s department store to house offices and medical clinics. A spokesperson wrote in an email Tuesday that Monte Brown, the health system’s vice president of administration, “said everything is on hold and there are no immediate plans to move forward.”

• The shops and mall, excluding Duke’s wing, total 1.1 million square feet, according to Northwood.

A new era at Southpoint

Backstory: The Streets at Southpoint opened in 2002. It’s Durham’s only remaining mall after Northgate closed and South Square was torn down in 2003 and it’s not just surviving. It’s thriving.

• The bustling shopping center is home to 174 retailers spread over 132 acres, according to Brookfield Properties, a real estate investment trust that acquired the mall’s operator five years ago in a $15 billion deal.

What’s happening: Brookfield wants to rezone the property so it can add up 1,382 apartments, a 200-room hotel, and 300,000 square feet of office space.

More details: The existing mall is 1.3 million square feet and its total footprint could swell to 3.3 million square feet under the proposed rezoning.

• The idea was first floated by Brookfield Properties in 2019.
• Since then, it has doubled the number of proposed apartments.
• Brookfield also has to go through City Council. The Planning Commission took a first look at the plans Tuesday night, but recommended against the project. The commission said the designs aren’t specific enough, and do not include workforce housing.

University Place’s resurrection

Backstory: Formerly known as University Mall, the shopping center was built in 1973 on 40 acres two miles northeast of downtown Chapel Hill. It’s the town’s only enclosed shopping mall and is anchored by SilverSpot Cinema.

What’s happening: Ram Realty Advisors, which bought the aging mall for $51.6 million in 2018, is demolishing the vacant A Southern Season store to make way for a mixed-use development. It involves replacing one end of the mall with six new retail and office buildings, a public green, a parking deck and space for a future hotel. The price tag: $160 million.

• A standalone Chick-fil-A will replace the vacant K&W Cafeteria, and an apartment building with ground-floor retail and a parking deck is under construction at the other end of the site.
• A building that currently houses Harris Teeter and Chapel Hill Tire will remain for now, and the remaining mall storefronts are being turned to face the parking lots.
• In total, the redeveloped site will have 350,000 square feet of retail and restaurants, 60,000 square feet of offices, 253 apartments and 150 hotel rooms.
• Most of the construction could wrap up by 2025.

Crabtree Valley Mall’s uncertain future

Backstory: Crabtree Valley Mall opened at the intersection of Glenwood Avenue and I-440 in 1972. Original anchors were Hudson Belk, Sears, Miller & Rhoads and Thalhimer’s.

What’s happening: The mall remains one of the Triangle’s busiest shopping centers. But more than a year after its longtime owners, CVM Holdings, put the 57-acre property up for sale, the mall remains on the market.

Details: The property is zoned for commercial mixed-use up to 12 stories. It has an assessed value of roughly $382 million, according to property records.

• The mall has two anchors left after Sears closed in 2018. One is Macy’s; the other is Charlotte-based Belk, which filed for bankruptcy in February 2021.
• Prospective buyers face another challenge: The property was built in a floodplain. Crabtree Creek, a 29-mile tributary of the Neuse River, runs directly behind the mall.
• The sale price could reach north of $95 million, speculated Vijay Shah, senior vice president at Raleigh-based Trademark Properties, last December.

Cary Towne Center’s demolition complete

Backstory: Cary Towne Center, once known as the Cary Village Mall, opened in 1979. It closed for good in January 2021 after Epic Games, the video game developers behind Fornite, purchased the site for $95 million to make way for a new campus.

What’s happening: In early 2022, Epic Games demolished the mall. To date, it’s only presented rough details of how it could build on the property.

• The preliminary plans showed up to 2.7 million square feet of office space, a motion-capture studio and a central utility plant, 75,000 square feet of retail, and up to 200 hotel rooms.
• Plans also mentioned a private road that would circle its offices; and several berms along the perimeter of the property for security.

More details: More than a year after pitching its rezoning request to town officials, its application remains at a standstill.

• “The next step is for the applicant to request a hearing in front of the planning and zoning board,” said Scot Berry, chief development officer for Cary’s inspections and permits division on Wednesday. “Epic has recently closed out their demolition permit, but hasn’t asked to be on the planning and zoning board schedule.”

This story was originally published March 15, 2023, 3:32 PM.

Chantal Allam

919-829-4522

Chantal Allam covers real estate for the The News & Observer and The Herald-Sun. She writes about commercial and residential real estate, covering everything from deals, expansions and relocations to major trends and events. She previously covered the Triangle technology sector and has been a journalist on three continents.

Mary Helen Moore

Mary Helen Moore covers Durham for The News & Observer. She grew up in Eastern North Carolina and attended UNC-Chapel Hill before spending several years working in newspapers in Florida. Outside of work, you might find her biking, reading or fawning over plants.

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Pamela N. Danziger

Senior Contributor

I study the world’s most powerful consumers — The American Affluent

Dec 4, 2017,09:19am EST

This article is more than 5 years old.

• Shopping alone or shopping primarily can’t be the reason why people will come to the mall anymore.
• two huge demographic groups – baby boomers on one side and millennials on the other -– with equally strong demand for affordable, accessible housing is where struggling mall properties can find a new lease on life.

Mall shopper

PHOTO BY FREESTOCKS.ORG ON UNSPLASH

The retail apocalypse has not been kind to malls. Credit Suisse recently studied the state of mall-based retail and predicted that that about one-fourth of the nation’s 1,100 shopping malls — or roughly 220 to 275 shopping centers — will close by 2022. This is largely credited to the shift toward online shopping, which the bank predicts to capture upwards of 35% of consumers’ spend by 2030 and the resulting raft of brick-and-mortar store closures, that will reach 8,600 this year and more are expected to follow next year.

The traditional concept of a mall as a grand hall for shopping is becoming “a historical anachronism” desperately in need of reinvention, says Rick Caruso, CEO of retail developer Caruso Affiliated, which is responsible for the trend-setting LA-based The Grove at Farmers Market that offers outdoor retail, food, and entertainment centers.

Mall owners aren’t sitting idly by though, as they push the traditional mall’s boundaries beyond retail to create community centers that become destinations where guests can meet, eat, be entertained, and shop, if they feel so inclined. The new buzz word in the mall industry is “reuse” or “remix” where old retail spaces are made over for new, more relevant uses for today’s consumer culture.

PROMOTED

Shopping alone or shopping primarily can’t be the reason why people will come to the mall anymore. With big increasingly empty spaces, ample parking, and access to major thoroughfares, malls are now asking “what else can these locations be used for?” says Peter Muoio, chief economist at Ten-X.

Among the answers to that question are dining experiences, beyond the ubiquitous mall food court; hotels and other services, such as dry cleaners, salons and barber shops; fitness, with gyms, yoga, Pilates and other workouts centers; recreational activities for families, such as rock climbing, children’s activities, even indoor water parks and amusement parks; and medical care uses. But one of the more revolutionary and promising concepts is adding live/work alternatives.

“Residential housing is one of the several options that developers are considering in order to revitalize failing mall properties,” Rick Rizzuto, vice president at Transwestern reports. “In today’s landscape, some are redeveloping mall properties to include residential units, while others are considering condos and apartments.”

The need is great and growing for accessible, affordable housing

Market success hinges on finding a consumer need and meeting it. And that is what malls can do by adding residential into their mix.

Housing collocated in mall properties can capture growing demand from two of the key demographics looking for such accessible, convenient places to live: aging baby boomers and young millennials. The Harvard Joint Center for Housing reports that by 2035 more than one in five people in the U.S. will be aged 65 and older, and one in three households will be headed by someone in that age group.

“The housing implications of this surge in the older adult population are many,” says Chris Herbert, managing director at the center, “and call for innovative approaches to respond to growing need for housing that is affordable, accessible and linked to supportive services that will grow.”

Mall properties could be well suited to meet these needs. Further it may offer opportunities for mall owners to bring in new retail, like grocery and pharmacy, and new services including medical and senior care tenants.

Affordable and accessible housing is also in great demand among millennials which forward-looking malls could be repurposed to address as well. In its new State of the Nation’s Housing report, the Harvard Joint Center for Housing Studies says, “Looking at the decade ahead, as the members of the millennial generation move into their late 20s and early 30s, the demand for both rental housing and entry-level homeownership is set to soar. The most racially and ethnically diverse generation in the nation’s history, these young households will propel demand for a broad range of housing in cities, suburbs, and beyond.”

By adding residential into the mall mix, the commercial tenants will find a new captive audience for their goods and services. “One of the main benefits is that residents will have restaurants, services and retail at their front door step. The close proximity to these uses will allow the consumer to utilize these almost as amenities,” says Steven Henenfeld, senior vice president and director of retail leasing at CREC.

How malls are redefining “living over the shop”

By looking beyond conventional retail space, malls can untap tremendous value in those properties and become more relevant to their local communities. “While we’ve seen store closures increase in 2017, for the most part, malls are attracting new tenants through strategic marketing and property enhancements,” says Nick Hernandez, managing director of retail for Transwestern. “And in cases where a retail mall no longer makes sense, we have seen many owners successfully adapt to the changes in their trade areas by repurposing the mall for another use.”

Mall locations can be prime for residential uses. “Malls are typically located on or near an intersection of a high or a main street and are well served by public transportation,” Henenfeld notes. “That puts the residential properties at the center of town, allowing residents easy access to main roads and highway systems.”

But adding housing to an existing mall can be a challenging process. “Retail and housing require completely different skill sets. You are dealing with numerous individuals instead of fewer corporate clients. Leases are shorter and turnover tends to be higher for residential,” Muoio explains. “However, there’s an incredible demand for housing, especially in certain markets, so owners making this shift would be entering a growth arena.”

Among the complications for adding residential into the mall mix is the need to involve local governments in the process. “Changing the core use of the mall property creates a somewhat complicated process,” Jay Rollins, managing principal of JCR Capital explains. “It typically requires a partnership with local municipalities and other officials to obtain proper zoning and determine a site plan. While malls are generally well-suited for a transition into multifamily housing, many communities may find this process too complex of an undertaking.”

Often times adapting mall properties to include housing options requires demolishing existing structures and starting over, which means that a significant amount of new capital must be raised, Rollins notes. But adding residential to the mall may yield a high return on that investment, especially if the market demographics and consumer demand is great enough.

Further, mall developers can realize new revenue from less productive areas in the mall property itself. “With ample space, developers can build multifamily on the less desirable portion of the parcel, leaving prime main road frontage for the retailers that require exposure to the street,” Henenfeld says.

While the greater accessibility that residents will find in setting up house in a mall property, including restaurants, shops and services on their door steps, they can face negatives, not the least of which is being surrounded by commercial use spaces and the crowds they draw. “Restaurants create noise. Gyms play loud music, so soundproofing must be considered in the buildout of a space depending upon the use,” Henenfeld says.

But in the end, two huge demographic groups – baby boomers on one side and millennials on the other -– with equally strong demand for affordable, accessible housing is where struggling mall properties can find a new lease on life. And it may not only be a strategy for failing malls, but for still vibrant ones that are looking to become even more relevant and important destinations in their communities.

In planning for new uses of old mall spaces, developers need to keep the needs of each of their local communities clearly in mind. “Developers must be cognizant of the demographics of the residential component and cater to the on-site residential demographic as well as the surrounding market,” Henenfeld concludes.

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Tom Vander Ark

Contributor

I write about the future of learning, work and human development.

While protests for civil rights and against the Vietnam war filled America’s great cities in the ’60s and 70’s, shopping malls filled the suburbs. The sprawling enclosed shopping complexes were anchored by J.C. Penney, Montgomery Ward, and Sears. Inside most you could find a Sharper image, Radio Shack, Victoria’s Secret, American Eagle, Burlington Coat and Foot Locker.

By 1975, there were 30,000 malls accounting for more than half of the retail dollars spent.

The 1980s brought the big box explosion with massive strip centers in every suburb housing Walmart, Costco, Target, and (now closed) Pace, Sports Authority, Office Max, Pier 1, and Blockbuster Video.

PROMOTED

The number of malls in the U.S. grew more than twice as fast as the population between 1970 and 2015. The opening of the 5.6 million square foot Mall of America in 1992 may have marked the apex of shopping malls in the United States with 20 supermalls of more than two million square feet.

Right after Mall of America opened, Amazon was born and the Internet exploded— it was the beginning of the end of American malls. With the move to online retail and smart supply chain operations across the country, customers are now just a click away from their purchase.

The last two recessions accelerated the decline of traditional retail and shopping malls. The Great Recession began in 2008 with 441 retail bankruptcies. The pandemic of 2020 accelerated online shopping by a couple of years forcing hundred of retailers into bankruptcy and emptying out struggling malls across the country.

These dead malls and strip centers are not only a sign of a declining retail sector, it is a disaster for communities that relied on the property and sales tax to fund basic services.

And there is more to come. Coresight Research estimates 25% of America’s roughly 1,000 malls will close over the next three to five years. Soon most communities will have empty strip centers and a dead mall.

Catalytic Conversion of Dead Malls 

In February it was obvious that the growing inequity, dislocation and retraining needs of the innovation economy meant that nearly every community had unmet public needs. In March when half the working population was plunged into unemployment, it became a full on national disaster. Federal relief helped in April but ran out during the summer. Regions and segments of economy — disproportionately impacting women of color — are likely to remain depressed for another year or two.

Almost every American community would benefit (short and long term) from better access to learning, work, and health opportunities for all. The rampant vacancies in malls and strip centers that could be an affordable opportunity for public-private partnerships to create human services centers.

Solutions require a new shared vision of what’s possible, a bit of catalytic capital, and a dose of creative deal making—civic, commercial, credit, and community leadership (at least two or three of the four).

The key is reversing a vicious cycle and that takes a catalyst-a big impact investment (a grant, guarantee, or reduced return expectation) and a big tenant (or a bundle of viable tenants).

Catalytic capital, according to the MacArthur Foundation, is patient, risk-tolerant, concessionary, and flexible. It’s catalytic in the sense that a deal won’t get done without it.

Resuscitating a dead mall takes creative problem-solving — it creates conditions and incentives that cause aligned investment and cohesive development. It almost always requires strong public-private collaborations that achieve community development goals while salvaging commercial value.

Given the need for 500 of these catalytic development deals nationally, there is opportunity to build a new kind of tenant solutions firm that builds bundles of national and regional human services including:

• fitness, wellness, and health centers;
• job services, workforce training, and college extensions,
• Small elementary and secondary schools,
• Daycare, elder care, and pet care;
• Mixed income housing units;
• Thrift stores, food and clothing banks;
• Restaurants and coffee shops; and
• Presentation, exhibition, entertainment and event space.

Some of these could be government services, some nonprofit organizations, but some will have viable for-profit business models.

Repurposing malls as human development centers extends services to the community, provides some economic benefits to cities, and salvages some return for real property owners.

Examples of Repurposed Retail 

Located in an abandoned 1.5 million-square-foot Sears office and distribution center in Memphis, Crosstown Concourse is an innovative vertical urban village including theaters, offices, health providers, a YMCA, a college, a high school, restaurants, and 265 apartments.

The development partnership kept community, learning, health, and art at the core and was made possible by 30 forms of public, private and philanthropic funding.

The development of High Tech High began the renovation of the Naval Training Center in San Diego into Liberty Station, now a vibrant shopping and mixed income housing center and the best example of school-centric urban redevelopment in the country.

Amazon is partnering with Simon Property Group to repurpose old malls into fulfillment centers. Some of the malls are being renovated to include housing and new mixed retail.

There are hundreds of schools in converted strip centers. In the 1990, some of the first charter schools including Highland Academy in Alaska and the first Aspire Public School in California were in converted grocery stores. iLEAD Academy is a small project-based high school in a converted strip center an hour north of Louisville. The Kearney School District office and early learning center in Kansas City is also a converted grocery store.

Conclusion

Public private partnerships for converting dead malls into human services centers isn’t a quick fix – these deals take time to develop and finance. But during this historic shift to online shopping, it is a widespread opportunity to turn a big problem into a big asset.

The ongoing pandemic recession requires additional federal relief investment. Federal incentives to convert dead malls into human service centers represent a high leverage, high impact opportunity.

Human services centers could be part of broader efforts to extend a web of support and opportunity in communities likely to be buffeted by economic, climate and health shocks.

Photo by Daniil Kuželev on Unsplash

Ideas from Around the Country

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Mall Redevelopment Strategies: Keeping Today’s Malls Competitive North America

Sam Black

The Ratkovich Company’s redevelopment of downtown LA’s Macy’s Plaza and the MCI Center office tower.

Source:  The Ratkovich Company

MALL OWNERS, faced with shifting consumer preferences or newer competition, regularly confront the need to remodel and redevelop — or lose shopping traffic, retail sales and, eventually, tenants. Successful redevelopment covers a spectrum from spruce-ups and new stores to starting over at the same site with new buildings, streetscapes and diverse uses, new links to surrounding neighborhoods and new approaches to transportation.

Redeveloping a mall to include good connections to bus rapid transit (BRT) or rail is risky if the transit is only “planned,” since some communities have reversed transit construction decisions, taken decades to complete a new transit system, or failed to deliver a good product. If the transit is already there, it should be easier. But even when a transit line is up and running, some developments fail to make the most of their transit connections, leaving shoppers and visitors to hike without wayfinding signs through long, lifeless tunnels, upstairs and then down, or out in the broiling sun, the rain or snow.

Redeveloping a mall with structured parking or new uses like entertainment, a hotel, restaurants or office buildings can be a challenging undertaking. But increasing density and adding a full mix of uses that includes residences, as well as a street grid that connects with existing streets and transit, is even more challenging. This article highlights three of these complex mall redevelopment projects: sites that are being redeveloped with a mix of uses, links to surrounding neighborhoods, and transit connections.

Oakridge Centre, Vancouver

Ivanhoé Cambridge, the owner of Oakridge Centre, one of Vancouver, British Columbia’s most successful malls, is planning to redevelop the center into a true mixed-use complex. Oakridge now has over 150 stores, occupying 575,500 square feet, with an additional 119,300 square feet of space in two six-story buildings, one office and the other mixed office and residential. The enclosed mall, which has a floorplate of about five city blocks, rises one to two stories above grade, with rooftop, structured and surface parking.

The existing mall is adjacent to a subway station on Vancouver’s rail transit system but is surrounded on three sides by its surface parking lots and on the fourth by the two mid-rise buildings. Those structures effectively screen the mall from the view of passengers exiting the subway. Customers coming from the subway to the mall must walk between the two buildings along an uncovered open-air sidewalk.

The new development, planned as a “culturally and environmentally sustainable model that harnesses the potential of a large urban site situated at a transit hub,” as described by Ivanhoé Cambridge, is scheduled for completion in 2023. The rebuilt complex will offer entertainment, grocery, office, residential, restaurant and retail space as well as civic uses. Landscaped open spaces will replace the surface and rooftop parking, and the redesign provides new or improved connections to neighboring sidewalks, streetscapes and the subway. The city has approved the redevelopment plans.

The new Oakridge Centre will offer 424,000 square feet of office space as well as low- and high-rise residential buildings that will contain 2,900 units of affordable, market-rate and seniors housing. The redevelopment will provide a network of walkways and plenty of sidewalk- and street-facing retail, including neighborhood-oriented shops, but no new vehicular streets. It will, however, include a new pedestrian-only street, with civic, community and retail uses along both sides and residential units above.

“One of the goals of the redevelopment is to connect to the surrounding neighborhoods through the pedestrian plan and the architecture, as well as through amenities and retail resources that can benefit the community,” explains Tom Perkins, a design director for Gensler, one of the projects’ architects. The complex will include 14 acres of green and public space, including a nine-acre green roof that will serve as a public park for the community as well as for center employees, residents and shoppers.

All parking will be underground; the plans call for demolishing the small amount of existing structured parking. The amount of parking provided for residents as well as commercial tenants will be less than that typically provided in Vancouver at present. The development, which aims to achieve LEED for Neighborhood Development (LEED-ND) Platinum certification, will incorporate transportation demand management to encourage walking, bike riding, car-sharing and transit use.

The Bloc, Los Angeles

Until about five years ago, retailers in the Los Angeles area did not focus much on shoppers using the city’s new rail transit systems. In recent years, however, according to Cal Hollis, the Los Angeles Country Metropolitan Transit Authority (Metro)’s managing executive officer for real estate, mall owners have realized that suburban residents, who for many decades would not have thought about coming downtown for mall shopping, can now use transit to get to a downtown retail complex as fast as or faster than they could travel to a suburban mall.

“We’ve gone past the tipping point on this,” explains Hollis. In 2013, The Ratkovich Company, a California-based developer and property owner with a portfolio of over 17 million square feet in Los Angeles County, purchased, with partners National Real Estate Advisors, National Real Estate Development and Blue Vista Capital, the MCI Center office tower and the adjacent Macy’s Plaza on South Flower Street in downtown Los Angeles for $241 million. Ratkovich renamed the complex “The Bloc,” started planning and executing a wholesale redevelopment strategy, and decided to make this the first LA shopping center to have a seamless connection to a subway station. The redevelopment, due to be complete by the end of 2015, will deliver 400,000 square feet of retail space, including a new 240,000-square-foot Macy’s, on three floors; a reconstructed, 708,000-square-foot, 32-story office building; a renovated Sheraton hotel; and new restaurant and entertainment tenants.

The one-square-block site will also feature an extensive rooftop “urban square,” outdoor dining and street-facing retail. The location is as downtown and urban as you can get in a modern, car-centric global city. But Los Angeles’ relationship to the automobile is changing, and visitors will also be able to reach The Bloc from the Los Angeles subway’s 7th Street/Metro Center station, the system’s busiest, via a lower-level walkway. The station serves two light rail lines, two heavy rail lines (all four of which are underground at this location), one BRT line at the surface level, and many surface bus routes.

According to Clare De Briere, chief operating officer and EVP, The Ratkovich Company, “The Bloc will be fully accessible via multiple modes of transportation: walking, biking, driving, ride-sharing and public transportation, as well as the first dedicated Metro Line connection point in the city. … We hope that the transportation hub we’re creating at The Bloc will help to further spur the revitalization of Downtown Los Angeles.”

Ratkovich is paying for half the $9.2 million cost of this underground connection, which will indeed be the first between a retail complex and the LA subway system. Negotiations between Ratkovich and Metro for the Bloc-subway link involved a wide range of design, signage, construction, operation, maintenance and liability issues. Subway patrons not using the retail complex will nevertheless be able to exit through it to the street. The fire, safety and security systems of both The Bloc and Metro have to be able to communicate with each other. The subway connector is expected to open at about the same time as the redevelopment.

Westfield Century City, Los Angeles

Westfield Century City mall, on the west side of Los Angeles, sits on Santa Monica Boulevard about a mile east of Interstate 405. The mall comprises 878,200 square feet of retail space on two levels above grade, with 148 stores, restaurants and theaters, about 2,500 parking spaces and a nearby office building. Australian shopping center developer Westfield Group owns and manages the mall.

Westfield is in the process of redeveloping the complex by adding over 400,000 square feet of new retail space, with 50 new stores, new and relocated anchors, a new 15-story residential and office building that will replace the existing office building and about 2,200 new parking spaces. The owner plans to demolish the entire property on a section-by-section basis and then rebuild. Construction is underway, a new parking structure is already complete and Westfield expects to deliver the new mall and residential/office tower by 2017.

The redeveloped Westfield Century City will remain an internally focused facility.  Westfield Co-CEO Peter Lowy describes the revamped mall experience as “a new urban escape” from the city and traffic, with an “environment that typifies our Southern California lifestyle.” The redesigned mall will not have a network of streets or a mix of uses within the mall; the residential/office tower will be adjacent to it. The redesign, however, includes large mall spaces open to the sky, with gardens, plazas and tree-lined walkways.

In addition, the mall will feature a direct, enclosed connection to the city’s future Purple Line subway extension. Although the increase in parking indicates that Westfield envisages an even more car-oriented future for the mall, it has also committed to building and paying for the subway connection. Westfield has not yet approved a detailed design of the connection, but the company states that it wants patrons to “experience the mall,” in Hollis’ words, from the moment they enter from the subway. The Purple Line is a deep-tunnel high-speed system; the segment of the line that extends to Westfield has cleared all regulatory reviews and is set to be under construction by 2019 and to open in 2026.

Other Examples

Many additional examples of successful mall redevelopments that incorporate some of the features highlighted here can be found in cities throughout North America. These include the following:

General Growth Properties’ Mizner Park in Boca Raton, Florida, where an enclosed shopping center was transformed into a mixed-use complex with civic spaces, offices, luxury apartments, townhomes and a multistory, street-facing retail component.

PREIT’s The Gallery in downtown Philadelphia, where an existing urban mall is being redeveloped with better subway connections and street-facing retail.

Midway Companies’ CityCentre in Houston, where the Town & Country Mall was transformed into a mixed-use development with new retail space as well as apartments, townhomes, offices, a hotel, green spaces and walkable streetscapes.

Numerous examples in Washington, D.C., and its Maryland and Virginia suburbs, where an extensive transit system serves not only the center city but also suburbs ready for high-rise mixed-use development.

There are also many examples of malls that have been transformed into lifestyle centers through the addition of landscaped pedestrian areas and/or new stores and restaurants set along new streets with limited or no parking and wide sidewalks. Lifestyle malls may also include a mix of uses and transit connections, but even when they do not, they are more pedestrian-oriented than their predecessors and thus are more appealing to today’s shoppers and restaurant-goers than the traditional enclosed mall.

Malls located in dense mixed-use neighborhoods already may be achieving some of the goals of mixed-use design — built-in customers, 18-hour pedestrian presence and so forth — making it unnecessary for the mall itself to add new streets or additional uses. There is no rule that every structure must be mixed use; urban neighborhoods are the original “mixed-use developments.”

Finally, when a mall owner develops for-sale housing on the mall site, the owner becomes a member of a broader community in which it may have influence and a management role, but no longer has total control. Some owners may see this as importing complexity and uncertainty, but David Kitchens, a principal in Cooper Carry’s mixed-use specialty practice group, which had design roles in some of the malls referred to in this article, points out that adding residential uses brings “customers who are living at your retail development, are contributing to a lively pedestrian presence 18 hours a day and, in making this choice of where to live, are proving that they are members of today’s urban-oriented generation. In other words, they are fans.”

Sam Black is a contributing editor to Development Magazine and an attorney and past chairman of the Washington, D.C., Smart Growth Alliance. This article was originally featured in Development Magazine’s Winter 2015/2016 issue.

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