Avoiding the Mall Death Spiral for Fun and Profit
This article was originally published, in slightly different form, on Strong Towns member Will Gardner’s Substack, StrongHaven. It is shared here with permission. In-line images provided by writer.
(Source: Casey Lovegrove on Unsplash)
Imagine for a moment that a developer came to your town to pitch a new shopping mall, sited on a local stroad. With a little help from the town on zoning and some additional investment in infrastructure to accommodate traffic from the highway, you’d have a shiny, new shopping destination. NIMBYs need not worry — the new mall wouldn’t disturb any existing neighborhoods. In fact, it would be located right on the blighted empty (but mandated) parking lots of the struggling big-box plazas. Nobody likes looking at those empty lots — replacing them with something shiny and new would be a win, right?!
I’m guessing that most of you would not endorse this proposal. Looking at the fate of malls today, especially those in smaller markets, you’d rightly be skeptical. With the benefit of hindsight, we know that the shopping mall will not be a winning bet. It would be a losing bet on a very large scale, with far-reaching implications for the financial health and quality of life of the town for the long term.
“What malls are worth right now is their dirt. Their structures have little to no value”— Marc Moffit, University of North Texas
Malling → Balling → Bawling
Of course, we didn’t have the benefit of hindsight when malls were being proposed. We didn’t know that Super Walmarts were coming, followed by the internet and the rise of online shopping that would decimate shopping malls. It seemed like a good idea at the time. We can’t blame past leaders for not anticipating shifts in consumer habits. But we can blame them for a critical strategic blunder: betting the farm on a direction that would be hard to reverse and that would distract them from using the time-tested strategies humans had used for generations to build vibrant towns.
Malls, like post-war suburban subdivisions, are built to a finished state. They require the town to invest in new infrastructure to support them, taking on the forever liability of its maintenance. They take up a significant amount of land, locking it into a single use. And they’re owned by one entity. All of these features mean that developments like this are far less adaptable over time than the messy, traditional development practices that previous generations have employed to build towns. Individually owned buildings in a downtown can be adapted to accommodate new types of businesses or additional housing. When a mall reaches the Spirit Halloween death spiral, even the wiliest of creative consultants paid for by state grants probably can’t put Humpty together again.
(The Taunton Mall after decades of investment. Photo by Matthew Faulkner c/o New Bedford Guide.)
So, while past town leaders in presently struggling mall towns shouldn’t be faulted for being unable to predict the future, they should be faulted for having the hubris to act as if they could predict the future with such certainty that it made sense to bet the farm. This is the lesson from the recent past that today’s leaders should heed: Big bets that create inflexible developments with slow feedback loops are a bad idea, no matter how pretty the plan looks right now.
Big bets like these can effectively kill a town’s financial health and quality of life. They dilute the value of the land they use. But what makes them more pernicious is that they divert attention and resources from the town’s beating heart — its downtown. Many towns are waking up from a mall-induced torpor only to discover that the key to their recovery is the very Main Street that the high-paid consultants told them was a lost cause decades ago.
(Plymouth rocks again, thanks to its downtown. Source: Boston Globe.)
Meet the New Mall…
For a municipality, subsidizing a mall is the equivalent of putting most of your money into one high-risk growth stock and forcing yourself to hold it for decades. You’ve tied your fate to that of one entity. By contrast, Main Street is a diverse portfolio of small investments. Some of those investments will fail and can be replaced by others. Others will do well and will represent a larger percentage of the overall portfolio as it gains value. Towns that are built to last direct most of their investment into this latter strategy and largely ignore the siren call of the big, splashy long-term ploy. Of course, the bigger, more diverse and healthier the Main Street portfolio, the less risky it is for towns to devote limited resources to more speculative bets that might not play out.
Even if no one’s proposing to build a new mall in your town any time soon, be on guard. As the last Big Things — for instance, our waning big box plazas — continue to decline, there will be increasing pressure to replace them with the Next Big Thing. And while whoever proposes the Next Big Thing may tell us that this time it will be different, it’s important that we take a hard look at the fundamentals. Is it a large bet, relative to the size of the town? Will it be built to a finished state? Will it be built by the few as opposed to the many? Will it be inflexible and permanent as opposed to adaptable and reversible? If the answer to these questions is yes, we should put our hands over our wallets and back away slowly. Our grandkids will thank us.
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Will Gardner is an education consultant and the founder of Alma del Mar Charter Schools. He’s currently scheming about how to improve his town, but he’s happy to help you with whatever you’re working on. You can find him at StrongHaven.substack.com.
