Shopping Center Renovation Might Increase Sales

shopping center with an adequate number of shoppers

Shopping center renovation could be your first thought when you recognize that your local mall or strip center is starting to falter.

Many of you will ignore our advice to redevelop the center as a mixed-use property so that it is less subject to the boom-or-bust cycle common in retail.

You'll say your municipality relies on sales tax receipts, or that property values will fall if you lose the upscale stores you might now enjoy.

But increasingly, department stores, as well as the large-format stores such as Sears and J.C. Penney, are irrelevant in America. These stores that have anchored malls for the last few decades may actually go out of business quite soon.  So our best advice would be to take a rational look at whether it is even viable to consider a renovation project, or whether you should be exploring new land uses and new paradigms for municipal revenue.

To be fair, a few of you will be correct in opting for the upgrade and fresh look. You're in that category if your area genuinely still has a market supportive of the square footage of retail space you have and the caliber of stores that your local population demands. This page is for you folks.

The first task is to figure out how to approach owners and managers that aren't proposing any shopping center renovation plans, even though the retail atmosphere has become a little tacky.

Most shopping malls in the U.S., and a fair number of the larger strip centers and lifestyle centers, are owned by large out-of-town corporations. There may be a mall manager, and you can and should sit down to discuss the community's wish to see a shopping center renovation.

If you are a concerned citizen, by all means take the mayor with you. Also bring other influential community members who may help you accurately assess the situation.

In many cases you will not be hearing any "straight talk" from the local mall manager. They may not know the true intentions of the owner of the center or be allowed to share that information.

Keep calling further and further up the organizational ladder until someone finally refuses to give you information or starts answering your questions.

Here are the key pieces of information the community would like to know:

  • Whether there are any plans to sell the shopping center and/or the underlying piece of real estate.
  • Whether there are plans to make physical improvements to the property in an effort to gain new tenants.
  • Management's explanation as to why the center is having difficulty.
  • Management's experience with and openness to unconventional approaches to generating revenue from dead malls or tired centers that have too many vacancies.
  • Ownership's willingness and ability to spend some serious money to make a better impression on potential customers.
  • Management's willingness to address safety concerns by physically closing a portion of the mall or center, at least for retail traffic purposes, to concentrate the small amount of traffic into occupied areas.
  • Whether the owners would consider redevelopment into land uses that are more needed in the community, considering the rise of online shopping and superstores for the price-conscious shopper.

Advice to the Community Facing a High-Vacancy Shopping Area

Beginning here I'm going to talk to "you," but of course I'm talking to you the community, you the elected official, and you the group of concerned citizens. I don't mean to give the impression that I'm only speaking to the shopping center owner.

First and foremost, you should appeal to the mall owner's best self by asking for a major reinvestment in shopping center renovation.

If your state law allows economic development incentives such as tax increment financing, you may have to consider granting some concessions, especially if you're in a competitive situation with other suburbs. But do try not to give away very much.

Since newer seems to sell over older in the mall business, you are going to have to escalate the war and make your mall the new favorite destination for a little while.

Far from an ideal solution, at least it will postpone the service cuts while you pursue another strategy for your municipality, such as regional pooling of sales tax revenues.

Giving the Shopping Center a Facelift

If you stick with retail, the shopping center renovation should entail a major cosmetic facelift. Every surface should look or be brand-spanking new.

Reconfigure the actual arrangement of stores. Create attractive and versatile outdoor spaces between clusters of shops, unless you are in the most severe of climates.

Even then, some outdoor space is popular and necessary today. If you can renovate the parking area and entrances so they look different, do that also. Change the appearance the most you possibly can within a reasonable budget.

Then impose a community improvement, business improvement, or special business district, or whatever is legal in your state as a means of collecting extra sales tax to help pay for refurbishing. If the city has to give an economic development incentive package, make it the least that will possibly do the job.

Next, change the name. Names evoke a mood, so position your mall carefully for its future. Disassociate yourself with the failed center as much as possible.

If security is a problem or a perceived problem, post friendly security guard-hosts everywhere. Give them a unique greeting phrase, coupons to distribute, or an interesting and entertaining persona.

For example, maybe the security folks are clowns or elves or info-babes. Have them offer to escort shoppers to their parking spaces.

More Unusual Ideas for Filling Your Retail Spaces

If you need creative option suggestions, chances are you are ignoring our advice on the shopping center redevelopment page that you should seek mixed-use development instead of placing all of your faith in retail.

However, if impartial market analyses show that the market is still there, but maybe it is marginal or needs a unique spin to differentiate itself from the competition, keep reading and thinking.

Currently there is much interest in "going green," so consider using your outdoor space creatively. If you have wetlands or mountains or forest to show off, do so. Place food and beverages for sale nearby.

Perhaps you also can attract a semi-permanent demonstration of the latest wind turbine, solar panels, electric car, and so forth.

Shopping center renovation really could be all about food. If there are local favorites, give them favorable terms that they cannot refuse.

If you have to pull a few local gourmet cooks out of their kitchens to become entrepreneurs, do it. Of course offer generous entrepreneurship support if you try such a thing. Woo great operators from the next city and give them prominent locations after the shopping center renovation.

Develop unique shops based on successful local stores found elsewhere in the metropolitan area. Try the "I will if you will" approach to business attraction. Aim for at least 20% of the stores to be leased all at once to local merchants.

Also try selling the world. Instead of the same tired collection of stores that other malls offer, find entrepreneurs who want to establish an Irish, German, or Russian store. These could be kiosks, or you could convert the entire center to a single ethnic group with a  large population in the area if you think doing so won't drive away shoppers from other backgrounds.

You could give artists free studio space in return for opening their studio during the afternoons. A variation of this was tried as an interim solution in suburban Crestwood in the St. Louis area, with mixed results.   Certainly this strategy was not the permanent solution and only lasted a short time.

Bring in piano teachers and tutors, so that parents will be captive shoppers. Instead of silly-looking massage chairs, bring in a real masseuse. Just be willing to insist that the owners of your local mall or strip center question the typical shopping center success formula before you invest public dollars or the public trust in a shopping center renovation.


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