Retail Rap: Malling it Over
If we wanted to show the struggles of the classic American mall, I don’t think we could come up with a better example than Northland Mall in Southfield, Michigan. When it opened in 1954, Northland was an instant hit: an icon not only for the region, but for the nation. One of the first and largest open air centers in the nation, Northland was enclosed in 1974 and today boasts space for 96 stores and nearly 1.5 million sq. ft. of retail.
Designed by acclaimed mall architect Victor Gruen, the original layout featured a four-level Hudson’s Department Store anchor with a ring of stores surrounding it. Northland was a headline-grabbing project from the start. A postwar milestone and a regional shopping center that heralded the beginning of the urban exodus in and around Detroit, Northland once experienced hours-long lines just to get into its enormous parking lots.
Northland has been making headlines lately, as well. As the demographics on this socioeconomic boundary have shifted, occupancy numbers have steadily declined, falling below 50% in recent years. After more than six decades of operation, the mall looks to be in danger. Target has closed and the mall’s final anchor tenant, Macy’s recently closed. Today, Northland is in receivership.
Unsurprisingly for a mall that recently celebrated its 60th anniversary, Northland has seen its share of societal changes over the years. Northland’s opening was essentially the beginning of the end for downtown Detroit. I think the fact that Northland itself is located just north of the City of Detroit boundary itself is a key point. When the mall first opened it was blamed for helping facilitate the move of retail (and, eventually, residential) out of the city and into the suburbs — one of the earliest examples of this dynamic in the country.
What does the demise of Northland mean for other venerable malls — are there lessons to be learned here? Is “death” an inevitability for other aging malls, and what strategies (if any) can be used to revive or revitalize these commercial dinosaurs?
While Northland has maintained the same direction throughout its lifespan, many malls facing similar demographic challenges have been repositioned to improve their fit as surrounding neighborhoods and cities shift and evolve.
Other aging commercial centers like Country Club Plaza in Kansas City, Randhurst Mall (today Randhurst Village) in the Chicago suburbs, and Cherry Hill Mall just outside of Philadelphia have faced similar obstacles over their many years of operation. They could have suffered a similar fate, but they have all been repositioned. To my mind, the biggest difference I see between those malls and Northland is they were located in areas that were not quite so socioeconomically distressed.
Total mall implosions are rare, and, for a mall the size of Northland, exceptionally rare. In many cases of struggling malls, the real estate is still valuable, it’s just that the retail fit is no longer suitable, as traditional suburban malls have a more narrowly focused target than other types of centers. For example, what was once Chris-town Mall in Phoenix and is today known as Christown Spectrum Mall is an example of very distressed mall property that has been successfully repositioned as a retail asset and has found great success as a flourishing power center. The power center model appeals to a broader socioeconomic segment, whereas the smaller stores in malls are often more targeted. In other cases, struggling or defunct malls are simply knocked down and replaced by an entirely new commercial category. Randall Park Mall in North Randall, Ohio is currently being demolished and will be replaced by an industrial park.
While socioeconomic changes are the cause of many mall demises, other factors can play a role, as well. Market competition is perhaps the most common. The 1.4-million-sq.-ft. Summit Place Mall in Waterford Township, Michigan has also suffered from being located on a socioeconomic boundary, but it is also the victim of a competitive disadvantage from Great Lakes Crossing in Auburn Hills — which opened in 1998. Today, Summit Place Mall is sitting empty, and its future is uncertain.
Is that what is in store for Northland? What is the next chapter for this venerable American mall? Will it be razed and transformed into an industrial park like Randall Park Mall, repositioned into a different retail format altogether like with Christown Spectrum Mall in Phoenix, or will it end up in limbo, sitting empty like Summit Place Mall or Rolling Acres Mall in Akron, Ohio? An aging generation of American malls is reaching a point where they need to be updated, repositioned, redeveloped, or repurposed entirely. Are there malls in your market that have faced a similar crossroads? I’d be interested to hear what happened to those malls, and whether or not you feel the ultimate outcome was successful. Let’s keep the conversation going. Leave a comment below or reach out through email to [email protected].