Dying shopping malls are wreaking havoc on suburban America
Rolling Acres Mall in Akron, Ohio opened in 1975 to great fanfare as the premier shopping destination for the surrounding community.
But customer traffic started to slow more than a decade ago, several department stores abandoned their leases, and the mall started failing. It lost its last store tenant in 2013.
Over that period, the mall was the scene of several crimes. A homeless man was sentenced to prison for living inside a vacant store there, another man was burned alive trying to steal copper wire from the mall, and the body of a murder victim was found behind the shopping center.
The mall was still standing vacant last year, and it remained a safety concern. The mayor of Akron instructed residents in July to "stay clear" of the area. The city finally began the process of demolishing the rotting shopping center in late October.
Like Rolling Acres, shopping malls across the country are dying, and in some cases leaving jobless communities and rotting buildings that are hotbeds for crime in their wake.
Dozens of malls have closed in the last 10 years, and many more are at risk of shutting down as retailers like Macy's, JCPenney, and Sears - also known as anchor stores - shutter hundreds of stores to staunch the bleeding from falling sales.
The commercial real estate firm CoStar estimates that nearly a quarter of malls in the US, or roughly 310 of the nation's 1,300 shopping malls, are at high risk of losing an anchor store.
"The communities wither away, and they never come back," says Howard Davidowitz, chairman of Davidowitz & Associates Inc., a national retail consulting and investment banking firm headquartered in New York City.
When anchor stores are boarded up, traffic tends to decline to the retailers located in the middle sections of malls. That has been happening at shopping malls nationwide, and now many retailers are going out of business and closing all their stores as a result.
Just within the last couple months, several mall-based stores including American Apparel, Abercrombie & Fitch, The Limited, Bebe, BCBG, and Wet Seal have all announced mass closures.
The process of a shopping mall shutting down entirely happens slowly - often over the course of a decade or more. As stores are boarded up one by one, shopper traffic slows and crime in the area tends to spike, Davidowitz says.
"Malls are big, big contributors to city and state taxes, jobs, and everything," Davidowitz says. "Once they close, they are a blight on the community for a very long time."
Kevin Zent, 59, of Memphis, Tennessee said crime is a huge problem at malls near his home, and he no longer shops at them as a result.
"Cars are keyed randomly in mallparking lots and there is not enough security to provide the level of safety a family wants while they are at the mall," he told Business Insider.
Zent said he believes that crime is the biggest reason why shopping mall traffic has declined in the last decade, though many analysts attribute those declines to changing shopper preferences and the rise of online shopping.
Sure enough, studies show Americans are increasingly choosing to spend money on technology and experiences like vacations over apparel. When they shop for clothing, a growing number of them are going to discount stores like TJ Maxx or ordering from Amazon.
"The shopping that used to be done in the mall is now at Family Dollar, Dollar General, Dollar Tree, TJ Maxx, and Walmart," Davidowitz says.
For example, Augusta, Georgia's Regency Mall has been closed since 2002. Fifteen years later, most of the properties along Gordon Highway where it's located also stand vacant, according to WJBF. This has made it difficult to persuade any developers to consider renovating the mall.
In best-case scenarios, malls will redevelop anchor spaces and find tenants able to pay even higher rents, like restaurants or apartment complexes. The likelihood of this outcome is much higher in affluent urban areas.
Two developers are trying to make this kind of redevelopment happen at Regency Square mall in Richmond, Virginia, which has lost more than a dozen tenants and two Macy's stores over the last several years. The mall's JCPenney and Sears stores remain open, but multiple stores in the middle of the mall have gone dark.
Mark Slusher, senior vice president of Thalhimer Realty Partners, which owns the mall with The Rebkee Co., explained the idea behind the proposal at a recent meeting with local government officials.
"The buzz word is experiential retail," Slusher said, according to the Richmond Times-Dispatch. "We are trying to create a new experience and bring people in, to attract them to the Regency experience. What that means is we need theaters and craft breweries and restaurants and trampoline parks and laser tag - things that people can experience in real life to compete with the internet. That's becoming our big competitor now - the web. We want to give people real life experiences."
