The End of Shopping Malls as We Know Them
From traditional brick-and-mortar retail to dynamic mixed-use centers for urban development, this is how shopping malls will evolve in a post-pandemic world.
The warning signs were ignored for far too long. The symptoms were undeniable. There was nothing that could be done. After years of neglect, the outdated model of the indoor shopping mall was given a terminal prognosis. And then COVID-19 happened. Now, the shopping mall as we know it is slowly withering away, a husk of what it once used to be. No longer the hub of economic and social activity they once were, shopping malls are deserted, decaying, and at death’s door. They had a good run. But is all this talk about the death of shopping malls premature?
With COVID-19 finally being confronted, vaccinations on the rise, lockdowns ending, and social limitations lifting with each passing week, shopping malls could see an influx of shoppers after almost a full year of uncertainty. Or will they?
Shoppers who got used to the ease of ordering online and having their goods delivered expeditiously to their homes, especially during the lockdowns, will only gravitate towards the convenience of shopping online. And if 2020 was any indication, e-commerce is set to have a record year in 2021, projections hitting $1 trillion (that’s with a T) in sales, all but solidifying consumers’ retail preferences.
Whatever the consumer response, one thing is certain: What the shopping mall once was in a pre-COVID-19 world will no longer be what it becomes in a post-COVID-19 world. Shopping malls will either be one of two things – a shining example of social planning or a mishmash of stitched-together parts comprising a meandering and tragic Frankenstein’s Monster plodding to an unceremonious demise.
The shopping mall was once a place to hang out with friends, meet new people, have a date night or family night out, and, of course, shop. The convenience of the internet has all but compartmentalized all the social interactions and activities we would normally do at the mall. More than just retailers shifting their focus from brick-and-mortar stores to digital sales, we can now keep up with our friends or meet new people via social media platforms, meet our significant other through algorithm-based dating apps, and enjoy date night or family time at home by ordering dinner right to our door through a food delivery app and stream a movie of our choice afterward. The internet didn’t just upend the shopping mall’s business model; it upended the shopping mall’s social appeal.
Shopping malls that didn’t recognize this industry and societal sea change – and were unchanged in their antiquated retail model before the pandemic hit – will struggle to adapt in a post-pandemic world. All of this is only exacerbated by department store chains like Sears and Neiman Marcus filing for bankruptcy in hopes to restructure crushing debt, traditional mall anchors like JCPenney and Macy’s closing underperforming stores to reduce their footprint, and companies like Adidas putting a renewed focus on direct-to-consumer sales. With a third of shopping malls expected to close in the near future, researchers have predicted that almost 300 shopping malls will fold within the next five years.
Just like how retailers shifted their focus away from brick-and-mortar stores to e-commerce, shopping malls are shifting their primary focus away from traditional retail spaces. Those shopping malls that understood their looming demise and decided to adapt accordingly will be reborn as something else entirely.
The pandemic has accelerated redevelopment plans for many shopping malls all over the country, with 280 shopping malls already in various stages of redevelopment, an additional 100 announcing redevelopment plans, and 70 already converted to mixed-use town centers. And it’s this new mixed-use identity that is gaining the most appeal from developers.
From the pre-pandemic conversion of Los Angeles’ famed Westside Pavilion into office space for tech and entertainment companies slated to be completed in 2022; the recent acquisition of Cary Towne Center in Cary, North Carolina by Epic Games to turn it into a new corporate headquarters; e-commerce giant Amazon and delivery services like FedEx and DHL looking to utilize vacant mall space for distribution hubs; everything from micro-warehouses, healthcare offices, residential units, and schools are being welcomed by mall owners hoping to revitalize and repurpose their once single-use properties and stave off a shopping mall real estate collapse.
The most intriguing example of what a shopping mall can become is the saga of Montclair Place, located in Montclair, California.
As it was known then, Montclair Plaza opened its doors in 1968 as a one-story indoor shopping mall. The mall underwent massive reconstruction in the mid-80s and added a second story. The mall flourished, but competition from neighboring Ontario Mills in 1996 and Victoria Gardens in 2004 effectively diminished Montclair Plaza’s popularity as an Inland Empire shopping destination.
In 2006, Montclair Plaza underwent an extensive renovation that added new tenants, remodeled older stores, and relocated their Macy’s to a prime anchor location alongside Nordstrom, JCPenney, and Sears. The mall languished until 2014 when Los Angeles-based CIM Group, Inc., owners of the popular Hollywood & Highland complex at the time, purchased the mall for $170 million. CIM set plans in motion to turn Montclair Plaza into something more than a mundane shopping mall.
The first step was a subtle rebranding in 2015, changing the name from Montclair Plaza to Montclair Place. In 2017, the mall opened a brand-new food court along with a Buffalo Wild Wings located adjacent to the mall.
In 2018, simple changes like new signage, modern furnishings throughout the mall, and simple decorative finishes like indoor plants changed the overall aesthetic and feel of the mall.
In 2019, the 100-foot-tall gaudy and dated Montclair Plaza sign was finally replaced with a modern 95-foot-tall monolith with a double-sided 48-foot-tall LED screen that boasted the mall’s many amenities and events to commuters along the bordering I-10 freeway.
Additionally, the old food court was converted into The Canyon, an indoor concert venue capable of accommodating 1,300 people. It opened its doors with Vince Neil of Mötley Crüe playing the inaugural show.
Stores closed temporarily to remodel, while vacant storefronts announced new tenants arriving soon, and a new Lazy Dog Restaurant & Bar opened just in time for Christmas.
There was an air of optimism amongst tenants who felt 2020 would usher in a new era at Montclair Place. People were finally coming back to the mall to check out all the new additions and renovations. The beginning of 2020 saw the new AMC Dine-in multiplex nearing completion just in time for the lucrative summer movie season. Everything was going according to plan, or so it seemed.
February saw the closure of one of the mall’s longtime anchors when Sears closed their Montclair store and 50 other locations nationwide. Worrying rumors of imminent but temporary store closures to combat the troubling spread of COVID-19 started to gain traction shortly after the closure of Sears.
In March 2020, Montclair Place – like all other “non-essential” businesses in California – suspended all retail activity and closed to lessen the spread of what had now become a once-in-a-century pandemic. It could not have come at a worse time for Montclair Place; 2020 was supposed to be the year of their rebirth. Instead, 2020 nearly killed them.
With millions sheltered at home and nowhere to go, online shopping increased while shuttered shopping malls racked up unpayable debts. Montclair Place took another blow as another one of their iconic anchors, Nordstrom, closed permanently in May due to company-wide restructuring as a result of the pandemic. Within a span of three months, two main anchors were permanently closed at Montclair Place, with dire predictions for JCPenney as a possible third fatality on the horizon.
What would a post-pandemic world look like for retail stores? That would be a nagging question many businesses, especially indoor shopping malls, didn’t have the answer to. One thing was certain: COVID-19 had accelerated the rise of e-commerce as well as the demise of the shopping mall as we knew it. Bold action needed to be taken by shopping mall owners and the communities they supported. Montclair Place stepped up to the challenge.
In September 2020, the Montclair City Council unanimously approved the Montclair Place District Specific Plan, a 20-year plan which hopes to transform the more than 104 acres of land Montclair Place currently sits on into a regional destination location. Bold in scale and having an operating budget of around $30 million a year, the plan will essentially create a downtown area from scratch – something the City of Montclair lacked – and give Montclair the community epicenter it always desired.
The concept was first introduced several years ago and went through several phases until it was revamped to deal with the rise of e-commerce and a post-COVID-19 world. Associate for development with CIM, John Prystasz, stated, “It has become apparent now more than ever to address the changing nature of retail and to reinvent the mall long term.”
The ambitious plan will allow for partial demolition of the mall and the construction of a maximum of 6,321 residential units consisting of 5 to 20 story tall apartment buildings and high-rise condominiums, along with houses. A total of 512,000 square feet of free-standing commercial space will be added along with plans for a 100 to 200-room hotel, several office buildings, and parks.
The main thoroughfare, inspired by La Rambla in Barcelona, Spain, would be lined by buildings with ground floors devoted to retail and upper floors to residences. A tree-lined median would extend north of the property, with several streets and a grand median connecting the property to the current Montclair Transit Center.
The plan gives developers a blueprint on how to proceed with the two-decade-long endeavor, with development starting on property owned by CIM Group and then extending to adjacent property owned by other landowners.
Even before these plans, the City of Montclair was growing. The surrounding streets were ripe with the construction of new townhomes, condominiums, apartments, and tract homes. The Montclair Place District Specific Plan will only add to the already growing population of 41,601, making Montclair into an Inland Empire boomtown and destination location.
What is happening to Montclair Place is not unique to them. Many shopping malls across the country are being ambitiously redeveloped to fit the needs of their communities in a post-COVID-19 world. Time will tell how successful we are at wrangling the pandemic and whether Montclair Place’s lofty ambitions will reach its full potential.
But if 2020 has taught us anything, it is that times of great upheaval inspire the greatest ingenuity. Individual stories like those of Judcody Limon, VCooks, and Lucky Nick’s Pizza taking control of their destinies are just small examples of everyday people rising to the occasion to defeat the personal challenges brought on by COVID-19. Department stores and shopping malls are no different, as some have subverted certain death to become more than places of retail, but places of dynamic urban development.
The rise of e-commerce might have killed brick-and-mortar retail, and the internet might have very well aided in compartmentalizing life’s social interactions. But in a world that now knows what it feels like to not enjoy the pleasures of life beyond the solitary confines of one’s own home, thanks in large to the lockdowns that defined the pandemic, people will no doubt be clamoring to venture back into the world to reclaim a semblance of pre-pandemic life they took for granted. The evolution of the shopping mall will play an integral part in revitalizing communities for decades to come in a post-pandemic world.
All eyes are on Montclair Place to see how they fare in the next 20 years at realizing their lofty goals. But if the pandemic has taught brick-and-mortar retailers anything, it’s that they can no longer maintain the status quo of the shopping mall and must recognize its eventual obsolescence. In doing so, they not only acknowledge a sad reality but help to usher in a hopeful future for the communities they serve.
