We've seen what happens when malls cling to the past. Now, Eastern Hills Mall wants to build the shopping center of the future: a town center.
The mall's owner has spent the last several years laying groundwork for a dramatic metamorphosis, looking to a retail concept that would transform the second-tier mall.
The Clarence mall has gone all in on the concept, putting the property up for sale in a bid for investors and working with the town to create special "lifestyle center" zoning in anticipation of the project. It is currently in talks with Uniland Development Corp., one of the region's biggest commercial real estate firms, about taking an investment stake as part of a potential redevelopment.
"Retail alone just cannot support these large parcels any longer," said Russ Fulton, the mall's general manager. "You have to have that mix of housing, services, restaurants and entertainment."
It's not a matter of plugging new tenants into the same old mall. While nothing is yet official and Eastern Hills has not yet released plans, company representatives have previously said the existing structures will likely be bulldozed and rebuilt from the ground up.
Similar concepts such as Easton Town Center in Ohio, the Avalon in Georgia and North Hills in North Carolina have found financial success, pulling in residential, retail and office lease rates far higher than those of their competitors and running at almost full occupancy with little turnover.
But the transition to a town center doesn't guarantee success. Lesser malls have tried and failed to pull off similar overhauls.
Rather than an enclosed mall with a food court, arcade and sprawling parking lot, a town center is an open-air community where housing, hotels, services and offices join upscale shops, unique restaurants, health clubs, grocery stores and pubs. The mix of tenants and living space organically builds density and increases foot traffic.
Town centers usually share similar characteristics. An outer ring of offices, parking garages, hotel and living space creates a natural buffer against the outside world.
Inside, the communities are often laid out like the downtown center of a small town – something like Stars Hollow from the show "Gilmore Girls." Quaint storefronts and outdoor cafes line roads and plazas. Leafy green expanses host outdoor events like yoga and live music. Fountains, benches, row house facades and other elements of architectural interest encourage strolling. Though town centers put pedestrians first, cars have access to calm, slow-speed streets, and there is some on-street parking or small, strip-plaza-type parking.
While some former malls have reinvented themselves as town centers, others have tried to rescue themselves with similar types of reinvention without addressing root problems, only to languish.
In 2005, there were five town center projects planned for one Georgia market alone. Some never made it out of the planning stages after facing opposition from a skeptical local government. Some failed to secure funding. Others made ill-advised, hasty jumps into the new concept and failed to launch.
But when the concept works, it's a home run.
"Since the recession, there’s been a national trend away from building new malls and towards revamping the old," said Steve Jellinek, vice president of commercial mortgage-backed securities research at Morningstar Credit Ratings. "The logic of redevelopment makes sense if the property is in a good location with strong demographics."
Town centers make up less than 2 percent of the country's shopping centers but they're among the most profitable, according the International Council of Shopping Centers. They cost less to operate and maintain than enclosed malls and tend to generate higher revenue margins. They also attract more affluent consumers who are willing to spend more than the average shopper.
The location of the Eastern Hills Mall could be a draw for developers.
It's located within the highest household income and surrounded by some of the safest suburbs in the Buffalo Niagara market. Its 86 acres is large enough to accommodate a variety of concepts with room to grow and plenty of space to breathe. And the Town of Clarence has been a proactive partner – something that hasn't always been the case with other town center redevelopments.
Beyond 'experiential' retail
As brick-and-mortar retail reels under the advancing attack of online shopping, the prevailing strategy to get shoppers back into stores has been to offer them "experiential" retail – something they simply can't get with the click of a button. Sometimes, that's offering customers champagne while they shop on Hertel Avenue or launching an interactive app that only works inside Toys R Us stores.
Attempts by traditional malls have included bringing restaurants and entertainment into their retail mix, such as Walden Galleria with its "Eat. Shop. Play." motto, which encompasses its "Restaurant Row" and the addition of its 5 Wits escape room and BillyBeez children's play complex.
Town centers take that concept to the extreme, making the mall the nucleus of a consumer's life – a place they can live, work, eat, shop and relax without ever leaving.
They play on another trend as well – the return to urban-style living. As illustrated by the number of loft apartments that have sprung up in downtown Buffalo, as well as the gentrification sweeping through the city, urban living is back in vogue. Starting in the year 2000, more young college graduates chose downtown living over suburbs in 39 of the country's 50 largest metropolitan areas, reversing a decades-long trend, according to the National Bureau of Economic Research.
To avoid being left behind, suburbs like Clarence are trying to create their own so-called "surban" enclaves: hip, eclectic places that have the exuberance, convenience and walkability of a city, but the crime rates, high-quality schools and breathing room of the suburbs.
That's exactly what Clarence Supervisor Patrick Casilio is after when he refers to the town center concept as a "city within a town," something Clarence is encouraging with the new zoning designation. The town is working closely with the mall to guide the project into action as swiftly as possible.
"The market can really only support one project of this magnitude," said Fulton, the Eastern Hills' general manager.
With those stakes, it's a race to be the first landlord to bring the town center concept to the Buffalo Niagara market.
"We want to be ready," said James B. Callahan, the town's director of community development.