As malls struggle with retail, more are embracing alternative occupants
MAPLEWOOD, Minn. — The courtyard of the mall was deserted, except for six people clustered around a coffee stand.
“We love this. Don’t we, Bill?” said Tracy Schifsky, an attendant for a group of disabled people. Bill sat in his wheelchair, unable to speak.
What she and Bill love about Maplewood Mall is the good coffee, the bright lights, their barrier-free walks with wheelchairs.
What they love is not — significantly — the shopping.
In that mall and others, shopping is drying up — and everything else is filling the void. Malls are becoming community catch-alls for government offices, dance studios, medical clinics, homeless centers, massage parlors, live theaters and even apartments.
The non-retail tenants are a smart response to a tough situation, say retail experts. They keep malls alive by maintaining foot traffic — even if no one is shopping.
Non-shoppers will soon get books at the Southdale Center library, get massaged at Burnsville Center or drop in to a homeless center in Maplewood Mall.
But shopping? Not as much.
“I shop online or at Target. I think that’s what everyone does,” said Schifsky, who sipped her Caribou Coffee in the empty courtyard. “I think online is killing everyone.”
Forced to adapt
It’s an awkward shift.
Enclosed malls — starting with Southdale in Edina in 1956 — were built as interior shopping experiences. Shoppers could stroll between stores, enjoy restaurant meals and admire the public art. Department stores drew in thousands of customers, and smaller shops benefited from the proximity.
Now, they are being forced to adapt.
In malls, when anchor stores sink, they suck the smaller stores under with the downdraft. The remaining anchors — often J.C. Penney, Kohl’s and Macy’s — have closed dozens of stores nationwide, an ominous sign for the malls which still depend on them.
“Enclosed malls are in terrible shape — 70 percent are near bankruptcy,” said retail professor George John of the University of Minnesota’s Carlson School of Management.
Fewer than half of the 1,500 enclosed malls built from 1956 to 2005 survive today, according to the real-estate research website Real Daily. Experts predict that one-quarter of those will be out of business in five years.
The internet is often blamed for the demise of malls, but professor John cautioned that its impact is exaggerated. Internet sales are growing but still account for only 15 percent of retail shopping in the U.S.
Instead, he blames the malls’ failure to adapt.
Vacant storefronts and empty halls can look creepy, so malls should fill those spaces any way they can. If they can’t sell goods, he said, they should try selling experiences.
One example is the Nickelodeon Universe amusement park at the Mall of America in Bloomington.
“The Mall of America is a bright spot. They maintained their reason to go there,” said John.
Are grocery stores next?
Other malls succeed with experiences — massage booths, movie theaters, live theater companies, dance studios. Burnsville Center recently added Escapology, which hosts murder-mystery parties.
Eating is another non-retail experience that can keep malls active. Professor John marvels at the parking lot at Ridgedale Center in Minnetonka, which is packed near the restaurants but relatively empty near the anchor stores.
He made a prediction: Grocery stores soon will be filling the empty spaces.
“Why not a Whole Foods store in a mall?” he said.
Exercise is becoming another mall-saving experience, as illustrated by Life Time Fitness’ new $43 million facility in Southdale.
If a mall can’t find enough experience-oriented businesses, said John, it should fill them with anything else that attracts people.
Government services are filling the voids: recruiting stations, driver’s license centers and police stations.
Maplewood Mall recently found a creative use for former retail site — the NorthStar Youth Outreach Center for homeless young people.
Even residential options might coming to a mall near you. Rosedale Center in Roseville is considering a proposal to add 425 units at the mall.
The owner of Maplewood Mall, Washington Prime Group, did not respond to emails requesting comment.
The commercial real estate firm CBRE represents some tenants of Burnsville Center. Managing director Mark Hunter said that the creative new uses for malls are made possible by the demise of the anchor stores.
In the past, those huge stores negotiated contracts preventing non-retail uses within malls. But without anchor stores, malls can consider tenants that were previously banned.
Hunter said the mall vacancies are a sign of a retail retreat that affects all stores. Malls, he said, can survive if they provide a “one-stop-shop” for goods, experiences and services.
“Shoppers want to go to one place and check all their boxes,” he said.
'I've been coming here 50 years'
But until the malls adapt, they will have the “Twilight Zone” feel of places where people are mysteriously missing.
In Maplewood Mall, near the hole that was once a Sears store, the gloom has spread down the hallways lined with 26 vacant storefronts.
On a recent Tuesday, an empty kiddie train chugged past Micheal Danielson, who waited as her 16-year-old granddaughter shopped.
The grandmother brings her checkbook to the mall, and pays for whatever the teenager finds.
“I have been coming here for 50 years,” said Danielson. “I don’t think any malls are looking good right now. This is no different than the others.”
Granddaughter Rhian finally returned, empty-handed.
“I went to three stores,” she shrugged, “but I couldn’t find anything.”