Mall in downtown Detroit?

[Honky Tonk]

^^^
...which has everything to do with race.

You need the get out of the house more, seriously.

[canuck]

You need the get out of the house more, seriously.

Yes but as Nina Simone and Ray Charles famously sang; "Baby, it's cold outside". You wouldn't want to catch pneumonia and die...

[3WC]

Some excellent comments and insights on this thread.

The person who could comment with authority on this thread is Al Taubman.

In the '80s he envisioned a downtown mall and acquired options on the real estate to build it, including the Kern block. He was the go-to developer for the big national anchor tenants necessary to finance one.

He fully understood that major retailers base their siting decisions on information provided by their demographers; they require X number of people within an X mile radius of the proposed store, with X median incomes, together with other considerations of course. Even though Taubman [[and Max) agreed to and did build Riverfront Apartments [[which they knew would be a money loser for all time) to help bring in necessary people, the necessary anchor tenants passed on the idea.

Keep in mind that Taubman considered himself a master retailer more than a real estate developer. He controlled Macy's and owned the Philly based Woodward & Lothrop department store [[and other chains.) His autobiography, "Threshold Resistance" is a fascinating book for anyone interested in retailing.

There are many successful downtown malls as has been pointed out, including those in Canada, San Diego, Chicago and other cities. Of course there are and have been failures as there always are in retailing. [[Even Amazon investors are currently disenchanted and Bezos has seen the value of his stock decline significantly.)

Until Detroit's demographics satisfy major retailers there won't be a downtown mall in Detroit. And that means not in our lifetimes. And race has nothing to do with it other than incidentally.

[SyGolden48236]

There was a large mall that opened downtown in 1977 in the Renaissance Center. Things did not work out so well with that experiment.

[3WC]

The Taubman Company leased and managed all the Ren Cen retailing initially, and the theaters. It was not really a mall in the traditional sense as there were relatively few stores and they were designed to serve the tenants primarily.

[Honky Tonk]

The Taubman Company leased and managed all the Ren Cen retailing initially, and the theaters. It was not really a mall in the traditional sense as there were relatively few stores and they were designed to serve the tenants primarily.

Au Contraire, When the RenCen first opened there were national chains in there on the mezzanine, and there was a hope to attract shoppers from all around Metro-Detroit. They were open Saturdays, late evenings, validated parking, etc. They even had an evening Holiday Shopping Night thing. It just never seemed to get off the ground no matter what they tried.

[313WX]

At least part of the problem with the Ren Cen, and even Woodward in its later years, was the lack of advertising/marketing [[though I suspect the logic behind it at the time was that it could attract riff raff).

Most people had no idea these destinations even existed.

[SyGolden48236]

I think that just about everybody within a 30 mile radius of downtown Detroit in the late 1970s knew the Renaissance Center existed and that there were very nice shops there. That project got huge amounts of publicity for many years before and after it opened.

[3WC]

I moved my offices to the Ren Cen when it opened - a half+ floor of Tower 400. I loved the place.

The only national retailer I recall was Brooks Bothers but there were a few other boutique clothing stores and a bookstore as I recall.

The Ren Cen was financially one of the great real estate disasters of all time. Al Taubman was driving around the site with Henry Ford [[they were friends and Ford had a small piece of Taubman's Irvine Ranch deal) and Taubman told Ford that instead of completing the basement he should fill in the site and abandon the project for the good of downtown. That was told to me at the time by one of Taubman's closest associates and recounted in Taubman's autobiography.

Taubman was correct as that project did more to destroy the office market than any depression and ultimatley relegated most downtown buildings to Class B and C space. Tenants had flocked to the Ren Cen because of the uneconomical low rents; my rent on a per sq foot basis didn't even cover he debt service, much less operating expenses.

All of the equity was lost and most of the debt as well when the owners delivered the deed in lieu. It was sold by the lenders for a fraction of its development costs.

[Midnight Rambler]

You need the get out of the house more, seriously.

Another rebuttal that fails to rebut. Perhaps it is you who should log off.

[Midnight Rambler]

Until Detroit's demographics satisfy major retailers there won't be a downtown mall in Detroit. And that means not in our lifetimes. And race has nothing to do with it other than incidentally.

It has everything to do with it, especially in Detroit. Start with the crooked City Council and go from there.

[iheartthed]

Until Detroit's demographics satisfy major retailers there won't be a downtown mall in Detroit. And that means not in our lifetimes.

Thank God.

[ABetterDetroit]

Not a mall in the traditional sense but I envision a floor of shopping on the Hudson's site in a arcade style with one or two points of entry. Window shopping and advertising towards the street, but with the ability to shop more than one store without taking on the winter climate.

[chicagoforlife]

What would you think about something like Water Tower Place in Chicago? [[7ish floors of retail in one building?)

I don't think that downtown Detroit has the population density to support it. The Near North Side of Chicago has right around 80,000 people in an area of about three square miles which is about the same as Midtown and Downtown Detroit combined which has a population of about 20,000. Water Tower Place is also easily reachable via the CTA Red Line and numerous bus routes.

[mwilbert]

Until Detroit's demographics satisfy major retailers there won't be a downtown mall in Detroit. And that means not in our lifetimes.

I agree with pretty much everything else you said, but I think it is possible, if not likely, that the demographics downtown could be adequate in my lifetime, but it seems to me that malls are becoming less and less viable all the time. By the time the downtown area could support a mall, I don't know that anyone will be building them. Which is OK with me, because I don't like malls anyway.

[erikd]

Retailing in America is in the nascent stage of a significant transformation, which is likely to be as dramatic as the widespread transition away from traditional downtown/main street retail, in favor of regional shopping malls, that started in the mid 1950s. The explosion of online retail, coupled with the increasing preference and demand for traditional style downtown/main street storefront retail, is killing the enclosed shopping mall. The suggestion that one of these outdated dinosaurs should be built in Downtown Detroit [[or almost anywhere else for that matter), is ridiculous.

"Between 1956 and 2005, about 1,500 malls were built, including the Mall of America, one of the world's biggest -- 4.2 million square feet of stores, an amusement park, even a wedding chapel. And it attracts millions of visitors each year, from all over the world.
It was a Golden Age of shopping, which lasted until a new Golden Age came along, courtesy of the Internet.
"All of a sudden, the consumer now has every single retail store throughout the world a key tap away," said Lewis.
Today, malls across the U.S. are dying. No new enclosed mall has been built since 2006, and Lewis predicts fully half of all our malls will close in the next 10 years."

http://www.cbsnews.com/news/a-dying-...shopping-mall/

[Bham1982]

Retailing in America is in the nascent stage of a significant transformation, which is likely to be as dramatic as the widespread transition away from traditional downtown/main street retail, in favor of regional shopping malls, that started in the mid 1950s. The explosion of online retail, coupled with the increasing preference and demand for traditional style downtown/main street storefront retail, is killing the enclosed shopping mall. The suggestion that one of these outdated dinosaurs should be built in Downtown Detroit [[or almost anywhere else for that matter), is ridiculous.

This is the common stereotype, but is basically all untrue.

High end malls have never been healthier. Specialty retail malls have never been healthier. Downtown retail has never been deader. Yes, there are exceptions, but these general trends are clear. You cannot get a retail space at Somerset; you will have to wait [[probably years) until something opens up [[meaning a store chain goes out of business).

Mid and lower-tier malls are dying, but it basically has nothing to do with e-commerce or preference for downtown retail. It's because A. The anchor tenants are dead or dying [[Sears, Pennys, KMart, etc.), B. Lower and mid-tier median incomes, in real terms have been shrinking and C. The U.S. is horribly overretailed with far more retail per person than any other rich nation [[retail space per person basically doubled over the last 25 years).

The health of malls is directly related to the health of the anchor chains. If you have unhealthy anchors, your mall is guaranteed to fail.

E-commerce plays very little role in the downfall of the Northland Malls of the world. E-commerce affects big box retail, not mall retail, and some degree of high end retail. Northland Mall doesn't have big box and and the type of consumer using Northland or Oakland isn't shopping the high end sites.

Downtown retail basically doesn't exist. The idea that malls are closing because people are flocking to shop downtowns is laughable at face value. There isn't one remaining major downtown retail center anywhere in Michigan.

[iheartthed]

Downtown retail basically doesn't exist. The idea that malls are closing because people are flocking to shop downtowns is laughable at face value. There isn't one remaining major downtown retail center anywhere in Michigan.

For states with large urban areas, Michigan is the exception here. Urban retail probably hasn't been this strong since either you or I have been alive. And since Michigan really isn't large enough to drive national trends it suggests that eventually the trend will take hold in Michigan as well.

[Bham1982]

For states with large urban areas, Michigan is the exception here. Urban retail probably hasn't been this strong since either you or I have been alive. And since Michigan really isn't large enough to drive national trends it suggests that eventually the trend will take hold in Michigan as well.

Yes, there are, of course, exceptions. NYC is obviously the big outlier. SF and Chicago and Boston are lesser outliers. There is some downtown retailing in Seattle, Philly, and a bit in DC.

Besides that, though, downtown retailing, at least mass-retailing [[big department stores, major chain stores and the like) are pretty uncommon in the U.S.

[nain rouge]

Mid and lower-tier malls are dying, but it basically has nothing to do with e-commerce or preference for downtown retail. It's because A. The anchor tenants are dead or dying [[Sears, Pennys, KMart, etc.), B. Lower and mid-tier median incomes, in real terms have been shrinking and C. The U.S. is horribly overretailed with far more retail per person than any other rich nation [[retail space per person basically doubled over the last 25 years).

Which I think goes well with what the anti-mall crowd has been saying [[Detroit doesn't need a mall). The golden era of the mall is over. Every decent-sized region will have a few big malls, but the rest are going the way of the dodo. Somerset and Great Lakes will survive, along with perhaps a few others. But that's really it. So why should Detroit build a downtown mall?

I think what's really being missed in this discussion - so I'll reemphasize it - is the resurgence of the strip mall and the ascendancy of big box clusters. That's where physical retail is going. People don't want to hang out an indoor mall anymore [[or they prefer browsing online to find the products they want and then driving out to purchase/pick up those items, rather than blindly searching), and retailers are tired of paying mall rents. When you add that trend to e-commerce, it's easy to see why most malls are screwed. The dismantling of Universal Mall is a template you'll see used more and more in the future.

[nain rouge]

Companies like Sears and Penney's are screwed because the business model is wed to Americans preferring mall/downtown-style retail. Wal-Mart and Target have filled the big box cluster department store niche and modern urban retail tends to be smaller and more specialized. There is nowhere for a company like Sears to go.

[erikd]

This is the common stereotype, but is basically all untrue.

High end malls have never been healthier. Specialty retail malls have never been healthier. Downtown retail has never been deader. Yes, there are exceptions, but these general trends are clear. You cannot get a retail space at Somerset; you will have to wait [[probably years) until something opens up [[meaning a store chain goes out of business).

Mid and lower-tier malls are dying, but it basically has nothing to do with e-commerce or preference for downtown retail. It's because A. The anchor tenants are dead or dying [[Sears, Pennys, KMart, etc.), B. Lower and mid-tier median incomes, in real terms have been shrinking and C. The U.S. is horribly overretailed with far more retail per person than any other rich nation [[retail space per person basically doubled over the last 25 years).

The health of malls is directly related to the health of the anchor chains. If you have unhealthy anchors, your mall is guaranteed to fail.

E-commerce plays very little role in the downfall of the Northland Malls of the world. E-commerce affects big box retail, not mall retail, and some degree of high end retail. Northland Mall doesn't have big box and and the type of consumer using Northland or Oakland isn't shopping the high end sites.

Downtown retail basically doesn't exist. The idea that malls are closing because people are flocking to shop downtowns is laughable at face value. There isn't one remaining major downtown retail center anywhere in Michigan.

I think that we are perhaps addressing a few different aspects of the situation. You brought up a few specific points that I do not disagree with, but I am talking about the general shifting trends in the American retail landscape.

The national trend and preference for the standard enclosed shopping mall [[of the type that has dominated the retail landscape over the last 50-60 years) is clearly on the decline. This is an undeniable fact.

I do agree with your point that high-end specialty malls are still thriving, but that isn't what I'm talking about. I'm not saying that the relatively small number of specialty high end enclosed malls [[such as Somerset) are dying, but that the STANDARD enclosed shopping malls are dying. I'm talking about Northland, Eastland, Macomb Mall, Lakeside, Southland, Summit Place, Winchester Mall, Universal Mall, etc. The fact that one or two of the enclosed shopping malls in Metro Detroit aren't declining, or already dead, doesn't refute the fact that the vast majority of them are dying.

Your assertion that the decline of the standard shopping mall has little or nothing to with the rise of online retail is factually incorrect, and not supported by anything. I challenge you to cite one legitimate source that backs up this assertion.

Your assertion that "downtown retail has never been deader" is also factually incorrect. There is an undeniable increase in downtown retail, both in the major cities and in smaller suburban downtowns. To be sure, this recent resurgence of downtown/main street retail has not yet reached a critical mass or become a dominant force on the overall retail landscape, but it is starting to shift where retailers are investing and locating their new stores.

Read my previous post again... I did not say that downtown retail and online retail has supplanted the standard shopping mall. I said that we are in the NASCENT STAGE of a retail transformation that is shifting demand away from the standard enclosed shopping mall, in favor of online retail and traditional downtown/main street retail. The fact that retail trends in America have recently shifted is undeniable, but the fact that the growing retail trends have not yet supplanted the declining trends does not mean that the transformation isn't happening.

Denying these trends is like a person in 2005 refusing to recognize that the growth of Netflix was killing Blockbuster and other traditional video rental stores, or refusing to recognize the fact that Amazon was killing Borders and other traditional bookstores. Of course, there are still video rental stores and bookstores, but the online book and video retailers now dominate the market.

For example, in 2014, Northland Mall clearly had more stores and retail sales than the storefronts along Lower Woodward in Downtown Detroit, which is how it has been for decades. However, Northland Mall and Lower Woodward are clearly on drastically different paths, and it is extremely likely that at some point over the next few years Northland Mall will go vacant, and Lower Woodward will fill with new storefront retail. Just because downtown hasn't surpassed Northland yet doesn't mean that it won't happen.

[iheartthed]

Companies like Sears and Penney's are screwed because the business model is wed to Americans preferring mall/downtown-style retail. Wal-Mart and Target have filled the big box cluster department store niche and modern urban retail tends to be smaller and more specialized. There is nowhere for a company like Sears to go.

The ultimate irony is that Sears began as a mail order catalogue. They perfected the 19th century analogue of online shopping.

I could see Sears surviving by retreating to an online+showroom hybrid. But probably depends on what type of lease arrangements they have going with the malls. Kenmore is still a powerful brand that would probably survive even if Sears does not.

[nain rouge]

The only reason I ever go to Sears or Penney is to get relatively cheap, fashionable clothing that is of better quality than what Target offers. But I could just as easily go to Kohl's, which has already adapted to the big box cluster/power center model. There's a reason while Kohl's is trading at about $60, while Sears' stock is almost half that and Penney is under $10.

[mwilbert]

It is fairly obvious that the heyday of the enclosed mall is over, as per erikd. That doesn't mean that some malls aren't still very healthy, and probably will be for the foreseeable future. But that isn't where the retail action or retail growth are--those are online. People sometimes say that only about 10% of retail sales are online, but that includes things that aren't generally sold in malls such as groceries and cars. If you exclude those and also motor fuels, which seems reasonable, you are getting toward 50% of sales online.

In conjunction with changing preferences in physical retail, it is hardly surprising that a lot of malls are finding the new environment rather challenging. Certainly I'd like to see more retail downtown, but that isn't going to be easy, and it probably isn't going to be a mall.