America's malls, like Steamtown, face uphill fight
SCRANTON — The Mall at Steamtown seemed like a great idea at the time. Billed as blight removal and commercial revitalization, many in the city with a dusty, vacant downtown embraced Al Boscov’s vision for a downtown mall in 1985.
The shopping center would prop up a beloved landmark department store, the Globe, and help downtown boutiques benefit from the city’s new reputation as a shopping destination. To top it all off, the mall would interconnect with the new tourist attraction, the Steamtown National Historic Site.
A bright new day for downtown was coming.
Part of the allure of the mall was its pitchman: Al Boscov. Boscov was trying to grow his department store chain at the same time malls expanded across the American landscape. He needed a place in the Scranton market. He clung to the idea of downtown locations out of a sense of tradition, but also necessity. The major mall developer in the region, Crown American, then-owner of the Wyoming Valley Mall and the Viewmont Mall, acquired Allentown-based department store Hess in 1979, and ensconced Hess in its mall properties. Shut out of the growing mall market, Boscov set his sights on building his own mall in Scranton.
Amid the enthusiasm, there were contrary voices. As it fought to preserve the buildings that others maligned as blight, the Architectural Heritage Association made the point that urban malls were rarely successful and that downtown Scranton’s revival would be in urban living and ground-level retail in existing buildings. Experts in commercial real estate interviewed recently confirmed those notions. By 1993, interior shopping malls of all types had already peaked and new types of shopping centers and shopping trends were emerging.
“As American downtowns are making a comeback, downtown malls are dying like crazy,” said Brady Foust, an Eau Claire, Wis.-based, retail site selection consultant. He said hundreds of enclosed malls of all types, downtown and suburban, have closed or are on the brink of closing.
The rise and decline of the Mall at Steamtown, which opened Oct. 23, 1993, is a story of timing, and changing times.
“As with everything, Scranton was 20 or 30 years behind,” said John Cognetti, a member of the association and mall skeptic, whose Hinerfeld Commercial Realty works with mall owners as leasing agent for some of its office space. “The mall didn’t do anything wrong. It is a victim of changing times.”
HUNTERS VS. GATHERERS
People don’t shop the way they used to. A trip to the mall was the better part of a day. Mothers with kids in tow visited department stores, bought a book to read or music to listen to, purchased toys or some clothing for the children, then perhaps ate a meal at a restaurant or in the food court. But in today’s busy world with so many single parents or dual-income households, “malingering,” a term coined by author William Severini Kowinski in his 2002 book “Malling of America,” is increasingly rare.
Time-starved modern shoppers venture out and buy intentionally, going to Bed Bath & Beyond for a bed spread seen in a recent newspaper circular and then going home. The idea of wandering around a mall, or even a department store — though it may result in impulse purchases or cross-shopping — doesn’t appeal to today’s shoppers, said Tom Maddux, a principal with commercial real estate firm, KLMB, in Towson, Md.
“The decline of malls is a story that is 10 to 15 years old. They’ve been unwinding for a long time,” he said. “Cross-shopping is not a destination.”
What has taken malls’ place is “lifestyle centers,” such as Shoppes at Montage in Moosic or “power centers” such as the Arena Hub Plaza. Both are open-air plazas that wrap around parking lots. A power center differs in being anchored by a “big box” store. Shoppers can park in front of the Gap or T.J. Maxx and get in, get what they want, and go home.
Other competitive threats to malls are outlet centers, the first believed to be Vanity Fair, which opened in 1974 in Reading, also home to Boscov’s headquarters. Outlet centers continued to multiply and still are, according to the International Council of Shopping Centers.
More people are shopping online, which is not so much a threat to retailers as much as a retrenchment. More online shopping means retailers don’t need as many stores or larger stores. Increasingly, retailers view their bricks and mortar stores as showrooms.
Maddux said conventional shopping center tenants — national chains — are smarting from competition not just from Walmart but also from Amazon.com and other online retailers.
“People will go into a store like Best Buy, scan an item with a cellphone app, then go home and buy it online,” he said.
Al Beery, a retail consultant with Pitney Bowes, said retailing has evolved beyond malls in multiple directions, not just the open-air centers, but also downtown shopping districts and multi-use developments that combine retail with housing and businesses.
“We are seeing the impact of so many other choices being available to shoppers,” Beery said. “The trend is to open air, parking and urban spaces.”
You can also blame teens for the decline of malls, experts say. With increasing disposable income in the 1970s and 1980s, teens became a critical constituency for enclosed malls and their tenants. As a gathering place, malls were important for teen culture, as depicted in the 1995 movie “Mall Rats.”
But today, cellphones, social networking sites and apps fill teens’ need for interaction and socialization, Foust said. Facebook has replaced the food court as the main venue for teen interaction.
As an independent mall, the Mall at Steamtown began with a strike against it. Malls and shopping centers had long been consolidated into real estate investment trusts or other big companies that could approach a growing retailer and offer leases in multiple malls. The Mall at Steamtown couldn’t do that. While the first 10 years, which is the typical term of a lease, ticked past, shoppers began to see those original retailers leave: Eddie Bauer, Wilson’s Leather, B. Moss, Lechters. Those vacancies became more difficult to fill with long-term national chains, the gold standard in shopping center leasing.
In its second decade, the Mall at Steamtown followed the lead of other struggling malls and began leasing to nontraditional tenants. Sometimes these were locally owned stores, sometimes they weren’t retailers at all, such as the Comcast customer service center, municipal offices and a local art cooperative. These tenants paid less than a Gap would. A typical mall lease includes a cut of retail volume, which didn’t apply to nonretail tenants. Nevertheless, foot traffic was preferred to dark spaces and a quiet center court.
In 2005, Jeffrey R. Anderson proposed a 300,000-square-foot lifestyle center in Moosic. Mall principals argued against approvals for the project. The Shoppes at Montage opened in 2007 and a number of retailers either left the Mall at Steamtown to move to Montage, or, when they had a chance, closed their store inside the mall.
The coup de gras for the marginally performing mall seemed to come with the recession. High regional unemployment coupled with the nationwide retail pullback all seemed to hurt the Mall at Steamtown disproportionately. Last week, Bon-Ton announced it would leave the mall in January. Boscov conceded Scranton’s downtown mall is fighting for its survival.
“Not every retailer, not every shopping center, survives,” Maddux said. “It’s dynamic. Look at the demise of places like Ames and the number of malls closing nationwide.”
Jesse Tron, a spokesman for the International Council of Shopping Centers, said while the number of enclosed malls is down and other types of shopping center are growing, the enclosed mall is hardly dead.
Others aren’t so sure. They think the Mall at Steamtown and all malls are on the fast track to obsolescence.
“The mall has had a long run — more than half a century. We are always reinventing ourselves,” Foust said. “We can’t envision a world without malls, but we are going to have one.”