Power centers: where beauty is in the eye of the consumer.

Particularly in the last few months, this blog has honed in on retail trends that usually point to the slow demise of the conventional, enclosed, middle-class shopping mall. I just can’t get enough of the topic. And most evidence suggests that, with the possible exception of the high-end ones, the mall is typically failing to perform at the levels that it did in the 1980s. Not only are these commercial stand-bys suffering from a decline in the suburban communities in which they were born, but sometimes the malls are imploding while the neighborhoods that surrounding them are perfectly stable, or even growing. Witness, for example, the rapid exodus of tenants at downtown Indianapolis’ Circle Centre Mall, even while the downtown is surging with the growth of new apartments, most of which target an above average income. Yet in the last two months, this formerly prominent mall has seen the departure of Johnny Rockets, Yankee Candle, Johnston and Murphy, The Gap, Gap Kids, California Pizza Kitchen and Abercrombie and Fitch. Am I missing any? Probably. And while a few are getting replaced, the overall vacancy rate among inline tenants at the mall has surged—all while new apartment proposals crop up on an almost weekly basis.

When it comes to retail, the entire consumer culture is in a tailspin. Much of that mall traffic has moved to slightly modified architectural configurations: through the 90s, outlet malls were a viable competitor, particular in exurban locations or smaller micropolitan areas that couldn’t support a mall. Then, in the early 2000s, lifestyle centers emerged, though my suspicion is that they are mostly just variants of the original open-air shopping mall, with more emphasis on fountains, plazas and landscaping. Then town centers started to emerge, which sought to fuse the lifestyle center retail experience with housing and offices, much like an original downtown, except usually in undeveloped greenfields or suburban sites that had previously lacked any real activity node.

In 2016, many of the lifestyle centers are facing the same struggles as conventional malls, and while most town centers are still succeeding (to the best of my knowledge), that’s no consolation to the boosters of Baton Rouge’s Perkins Rowe, which has changed hands multiple times since its conception ten years ago, including one purchase at a foreclosure sale in 2013, which in turned helped to stymie the project’s final phases. On top of all these newfangled retail efforts, most cities have enjoyed varying levels of success (sometimes considerable) at bringing retail and entertainment back to their historic downtowns or pedestrian-oriented commercial corridors. Why go to a “Disney-fied” facsimile concocted in a corporate boardroom when you can hang out at the real thing?

While all of these initiatives have collectively usurped much of the wind out of the sails of the traditional enclosed shopping mall, the greatest threat may only be emerging: online shopping from personal computers. Even in the most successful shopping districts, property managers are signing fewer leases with purveyors of durable goods—that is, the most conventional retail—and more with services. Restaurants, bars, taverns, salons, spas seem to be doing quite well, as do such white-collar services as finance, insurance, real estate, law firms, medical services, among others. Meanwhile, many retail giants (particularly those that sell youth-oriented apparel) are floundering. Circle Centre Mall owes much of its malaise to the fact that it harbored quite a few clothing stores, many of which are declining nationally.

It doesn’t take an MBA to spot all this turmoil. But it remains profoundly difficult to gauge what is going to happen in the years ahead. So much land in the US remains devoted to selling consumer goods—a higher square footage per person than any other country. And so many developers make their bread and butter on shaping the landscape specifically to catch the customer’s eye. With that said, the last decade has ushered in yet another retail typology—one which I have lightly referenced in the past but certainly warrants an article of its own. This time, we witness the proliferation of the power center.   DSCF2832DSCF2835You’ll see familiar names—Best Buy, Target, Bed Bath and Beyond—so there’s nothing particularly special about the tenant mix. What is it, then, that makes it a power center?

The International Council of Shopping Centers defines most of the major retail typologies here, and it identifies power centers as “category-dominant anchors, including discount department stores, off-price stores, wholesale clubs, with only a few small tenants”. And, as indicated by the photos above, they are predominantly unenclosed, with all the stores surrounding a shared parking lot that emphasizes vehicular circulation, as opposed to the pedestrian orientation of enclosed malls or lifestyle centers. In other words, they function somewhat akin to a more conventional neighborhood shopping center, in which a large anchor helps generate traffic to support a handful of smaller in-line tenants…but much, much bigger.

In other words, much of America has probably visited a power center without knowing that it had a name. And I’ve only provided a glimpse through photos of what the one above offers.DSCF2833DSCF2838It also features a Cabela’s as its single largest anchor, a 14-screen movie theater, four hotels, a number of national/regional chain restaurants (Five Guys Burgers & Fries, Bob Evans, Cracker Barrel, Applebee’s, etc.), then the aforementioned “category killers” (Best Buy, Michael’s, Bed Bath and Beyond) and a few other more conventional department stores (Kohl’s, T.J. Maxx and the ubiquitous Walmart Supercenter). And the last of these three photos partly features the center’s name: it’s The Highlands, and it sits just a few miles east of downtown Wheeling, West Virginia, along I-70’s tiny path through the narrow northern panhandle of the state. And, like many power centers, it embraces a certain architectural unity that no doubt enhances its function as a central purveyor of goods and services for the region. But, aside from some of the coloring and cladding materials, these power centers lack much of a unifying theme. While most people know the name of the mall closest to their home, the power center’s identity comes more in the aggregation of so many big-box names.

I’ve covered two power centers in the past: one outside Detroit called Fairlane Green and another outside Reading PA called Broadcasting Square, but in neither case was the article fundamentally about the power center as a means of organizing shopping unto itself. Like the Highlands, they had a little bit of everything, but it was more about getting all these popular stores in one convenient setting than it was about organizing it as a discernible place. Even then, I wasn’t sure yet I had formed a precise opinion on them. And that’s their competitive advantage: while they still fall under a single, unifying property management, and the façades generally have a similar look, they offer tenants rarely seen in conventional enclosed malls, and all the tenants—large and small—share the advantage of visibility from the roadway (whatever the roadway entails). No more large, nondescript boxes, where the biggest sign on the premises is the mall’s name itself. It’s all about the brands.

Up to this point, I have remained reticent on the viability of power centers as a means of organizing restaurants and retail. Now, with The Highlands, I’m prepared to come clean: I’m not a fan of the power center. In the 1950s and 60s, malls proliferated because they embodied the convenient alternative to historic central business districts, which lacked a suitable design to serve an increasingly car-dependent population. Now, power centers seem to flourish as an alternative to those who feel that enclosed malls still require too much walking. Truth be told, most power centers are just three or four strip malls shaped as an L, a U, or a fully enclosed square, with a parking lot as a centerpiece. The only walking that takes place is from a car across the parking lot to the one destination. If a person wants to get to another store in a power center, he or she returns to the car and drives there. At least malls require people to walk once ensconced in that vast, climate-controlled space. Power centers discourage walking. But, in this era of imploding retail, they remain quite popular and overwhelmingly successful…for now.DSCF2839

In fact, power centers may be ever so slightly accelerating the decline of malls. While many of the tenants at The Highlands—Best Buy, Michael’s, Bed Bath and Beyond—shun conventional enclosed malls, not all of them do. Take, for example, this one:DSCF2834J.C. Penney has always been a staple of the conventional mall for half of a century, like its biggest competitor Sears. With locations in every state but Hawaii, it remains one of the most recognizable mid-range department stores in the country, though its recent financial woes have been equally high-profile. The presence of a J.C. Penney’s at The Highlands power center demonstrates how a retailer is willing to test its meddle through a different typology than the conventional shopping mall with which it is long associated, pitting it against both category killers like Best Buy and Michael’s, as well as more successful department stores that rarely affix themselves to malls—namely, Kohl’s and T.J. Maxx. While many speculate that the biggest source of Penney’s recent malaise is its restructuring of price points, it certainly cannot help the chain that so many of its locations tether it to underperforming malls. If power centers continue to surge in the years ahead, we may find mall stalwarts like J.C. Penney’s migrating alongside Best Buy and Target. Then what happens to the vacant Penney’s space at the nearby mall?

And Penney’s wouldn’t be the only one making the shift.DSCF2837I failed to take a good photo of it, but behind the trees is another former staple of conventional malls: Bath and Body Works. While still easy to spot in a wide variety of malls (including some struggling ones), outparcel and open-air locations of this successful brand have proliferated in the last decade. How long before they abandon malls altogether? Old Navy, featured in an earlier photo, also occupies as space at The Highlands; they’re relatively uncommon at malls these days. And then there’s the tenant in the photo below:DSCF2836Lane Bryant has, to the best of my knowledge, all but completely abandoned malls. I haven’t seen one in a mall in years. The Columbus-based company (an affiliate of the larger Ascena Retail, which also runs the Dress Barn two doors down) loves power centers. Here’s its location in at the aforementioned Fairlane Green in Allen Park, Michigan (outside Detroit), next two an Old Navy and a Payless Shoe Source (which also has drifted away from enclosed malls):DSCF2443And here’s one in Greensburg, PA, outside Pittsburgh, at a much smaller power center:IMG_3228Mall-based Lane Bryants are hard to come by. In some instances, the company has departed a mall after its lease expires, only to move to a power center less than a mile away. The company has demonstrated an aversion to malls that other brands are likely to mimic if it proves successful. And most evidence suggests that Lane Bryant is weathering the retail paradigm shifts quite nicely.

I don’t want to begrudge these companies for abandoning malls, if they feel this is the right decision for them to stay viable. Whatever it takes in these times of dearth. The power center offers far more immediate visibility than a typical mall. After all, how many malls feature signs like these?DSCF2427With few exceptions, the only names in malls that get to emblazon their brand on the exterior are the department stores or a few restaurants/specialty stores that offer direct entrance from the parking lot. Lane Bryants never got such a chance at enclosed malls. In a power center, everything is essentially an outparcel—even if the big-box names are the key players, the positioning of everything around a central parking lot or service drive helps democratize the display. Every tenant can be a diva.

Furthermore, since power centers build an immediate dialogue with motorists passing by, they allow for greater flexibility if they choose to grow. From what I can tell through the website, The Highlands in Wheeling started with the Cabela’s and a few other outparcels. But, since it’s on a huge greenfield—accessible largely through an exit ramp off I-70 onto Cabela Drive—it offered almost unlimited capacity to expand simply by latching on more outparcels and the requisite parking/service road expansion. Compare that to the average mall: though the over-sized parking lots often harbor room to expand with outparcels, parking decks, or even a new lifestyle center conversion, this procedure often requires more planning because of the centralized nature of this huge retail arena, usually constrained on all four sides by major arterial roads. Power centers generally lack a center—the consumer energy gets diffused across so many big-box anchor tenants. Expanding the water/sewer to a new strip-mall cluster is far more akin to ramming in a few more tinkertoy pieces. No need to demolish; just keeping adding more.

Clearly I recognize the competitive edge of a power center, but I’m still not sanguine about their future. I suspect their prominence will eventually fade, just as historic downtowns did half a century ago (and enclosed malls are continuing to fade), but that they will offer a far greater blight on the landscape, a drain on their municipal budgets from lost property tax revenue, and a more profound challenge for redevelopment or adaptive re-use. They seem like a step backwards from lifestyle centers, town centers, festival market places, and even from the conventional mall, at least in terms of fostering an forging an aggregate concept that achieves any real destination status.   That’s just not what they’re about. As indicated before, they aren’t walkable. And they owe almost all their aesthetics to the fact that, for the time being, they usually boast high occupancy rates. Granted, most commercial corridors look bad when they’re largely vacant, but a power center, I suspect, will take blight to new extremes, since, from the vantage point of that central parking lot, the patron of a dying power center will see nothing but underutilized space in all four directions. How sad. (Apparently it’s already happened: the Northern Lights Shopping Center northwest of Pittsburgh was the first unofficial power center, dating from the early 1960s, and it’s basically a dead mall. Wikipedia offers some grisly photos.)

But until we get to that tipping point, maybe the power center is at least staving off the demise of shopping as an extroverted experience. On the opposite side of the Wheeling metro, in St. Clairsville OH, the Ohio Valley Mall seems to be holding its own, but how long before The Highlands pinches off a few more tenants? (It already lost Old Navy and J.C. Penney several years ago.) Will it really matter whether power centers unseat conventional malls? In two decades, shopping may involve little more than swiping a finger across a little glowing, handheld rectangle…perhaps at a streetside café in a flourishing old downtown? We should all be so lucky.

12 thoughts on “Power centers: where beauty is in the eye of the consumer.

  1. Chris Barnett

    1. WRT Cabela’s-Wheeling, they sheared off the top of that mountain maybe 15 or 20 years ago to build Cabela’s and the “power center” there is much more recent.

    2. The car dealers have migrated to the top of the mountain, too, across I-70 at that exit. That’s also a recent development, in the past 3-5 years or so.

    3. There has been a power center across I-70 from the Ohio Valley Mall at St. Clairsville for quite some time now. It features Walmart, Sam’s Club, Lowe’s, and Value City Furniture along with a bevy of QSRs and six nearby hotels. The Mall itself has devolved into a hybrid mall/power center, with Rural King, HHGregg, David’s Bridal and Toys R Us on outparcels.

    At least with a mall, there is some hope that part of it could be repurposed for medical or residential uses. Like you, I am not sanguine about the future of all the underutilized retail space that has begun to fall into ruin.

    Reply
    1. AmericanDirt Post author

      Thanks Chris. I figured the Cabela’s was first. Most of the power center architecture falls into that neo prairie school style that has exploded in the last 5 to 7 years, so I figured it was newer.

      The Ohio Valley Mall, as you noted, has devolved and includes the non-lucrative Kmart as one of its “anchor tenants”. That said, it still seems to be over 80% occupied, which, by today’s standards, is pretty good.

      What will be the saddest about power centers is if they continue to grow by latching on new uses in the adjacent greenfield or outparcel space, only to find some tenants vacate the older portions of the same complex to move to the new. If that were to happen, a power center would essentially “sprawl” away from itself. I guess it remains to be seen, but I wouldn’t hold my breath.

      Reply
  2. Astara

    Lane Bryant is actually owned by Ascena Retail these days. It’s been years since The Limited owned it. Charming Shoppes began removing them from malls several years ago, and it was a smart move. Strip centers allow for lower rent, and at this point, Lane Bryant has enough of a customer base to render mall traffic unnecessary. Strip centers are perfect choices for stores with established brand identity that have become destinations. You’ll note that all brands mentioned in your post have that in common.

    Reply
    1. AmericanDirt Post author

      You’re right about Ascena retail; I didn’t read my source material correctly. Will make the change. Thanks! And who can blame LB for making a move that works for the company. How many others will join them in the future, leaving even more vacancy in the malls as a result? It’s especially telling, Astara, if you consider some of the companies who have doggedly stayed with the malls, even the really struggling malls: companies like Aeropostale and The Gap, which are now struggling themselves.

      Reply
  3. Jeffrey Jakucyk

    I find it interesting how some malls or strip centers have molted into power centers over time. Cincinnati actually has a rare multi-story semi-enclosed power center in the Kenwood area called Sycamore Plaza. Originally built in 1966 as Kenwood Mall it was the area’s first enclosed shopping center, though a very small one. In the late 1980s Kenwood Plaza across the street, a strip center with two anchor department stores, was remodeled into the fully enclosed high-end Kenwood Town Centre mall. This forced the old mall to retrench and it was mostly demolished and rebuilt in the early 1990s as Sycamore Plaza, a power center. (The similar and changing names over the years makes researching their history quite a chore.) There’s actually two atriums, two stories tall in front and three in back. Macy’s Furniture Gallery occupies the whole bottom floor, TJ Maxx (formerly Barnes and Noble) is on the top floor, and the middle floor has a Dick’s Sporting Goods, a long-empty Linens n’ Things space, and a couple smaller tenants at the front entrance. A Toys R Us is on one side with its own entrance and not accessible to the interior, as are a handful of restaurants and other small tenants around the front. An Old Navy and Staples on the other side have been demolished to build what looks like a huge new 2-story Dick’s, likely leaving both of the middle floor interior spaces vacant. They’re both rather long and narrow and twisty in ways that are not conducive to standard layouts.

    This also kind of reminds me of my old friend Deerbrook Mall north of Chicago. When I was a kid in the late 80s and early 90s it was still mostly an enclosed mall, with the Service Merchandise on the far south end and the Jewel-Osco on the north after a short outdoor strip mall section. With nearby Northbrook Court quickly becoming “the” mall of the area, Deerbrook began to slide. I remember the interior part of the mall gradually being whittled away to create bigger spaces and outdoor entrances to Office Square (now Office Max) Bed Bath and Beyond, then Sportmart (now Sports Authority, which has moved around to different spaces over the years), and Best Buy, leaving what was left of the central core of the mall completely empty except as an access to TJ Maxx, which I understand is also moving. So with just a couple of small storefronts that have always been outside, it’s now a power center too.

    Reply
    1. AmericanDirt Post author

      As is usually the case, Jeffrey, you’re onto something that I’m now kicking myself for it not having occurred to me. You got there first. Yes, indeed, virtually all the malls that have died and then been redeveloped commercially have turned into some variant of a power center. Sometimes it has happened dramatically and overtly, wiping the slate clean and starting a new. Other times–the more interesting ones, IMO–it has happened incrementally, which is what happened to the Deerbrook Mall, so it seems. Your description of Deerbrook also sounds almost identically to what I expect happened to the Whitehall Mall in Allentown, PA, which was a primary mall until the much larger and splashier Lehigh Valley Mall opened across the street to the south many years ago. The Lehigh Valley Mall, still a successful middle-brow mall (a rarity these days) has always outshone Whitehall, which has gradually turned into a power center of sorts, hosting Kohls, Sears, Bed Bath and Beyond, Michael’s, Gold’s Gym, and several in-line stores in the tiny portion left surviing of the original mall. This original Whitehall “indoor” portion has not been updated since the 1970s, I suspect, and is complete with broken tiles, leaky ceilings and missing letters on the old signs. And, incidentally, it’s managed by Simon Property Group, just like Lehigh Valley Mall across the street. There’s no need for Simon to upgrade because the mall is mostly occupied and I’m sure the mortgage was paid off decades ago.

      My suspicion is power centers will eventually supplant indoor malls. I suggest you check out the link provided by Gabe who also responded to this blog: the Fremaux Town Center in Slidell, LA has places like Buckle, Forever 21, Journeys….all regulars of conventional enclosed malls, except this time they’re in a power center format. If they succeed in power centers, who’s to stop them from abandoning malls, much the way Lane Bryant already has? And, at some point, what major brand names are going to find the enclosed mall as a competitive advantage. And then, of course, the new generation of power centers will have design hooks and amenities that will render the ones construction way back in 2002 as obsolete. And the cycle continues…unless, of course, even successful retailers like Kohl’s end up engaging in massive closures, which very well may happen, since Kohl’s is shuttering its underperforming stores over the next month or so.

      Reply
      1. Chris Barnett

        Glendale Towne Centre in Indianapolis (or however it is styled now) has a similar arc: it started out in the early 60s as a partially enclosed mall with two department stores and Woolworth’s and an outboard grocery; it became fully enclosed sometime in the 80s after the grocery closed and just before Woolworth’s closed; did some “addition by subtraction” around 2000 with a multiplex theater and freestanding Lowe’s added (while Staples, Old Navy, and the library filled a vacant department store space); then in 2007 the former mall court and inline shops were torn down and now it’s full-on Power Center with Macy’s, Target, Staples and Lowe’s and a bunch of restaurant pads on the outparcels.

        As Eric is aware, it’s in a pretty sweet demographic spot even though two of Indy’s major malls are within 5 miles.

        Reply
        1. AmericanDirt Post author

          Thanks for the update, Chris. I never visited Glendale when it was a bona fide mall, though I know it underwent an almost complete overhaul a decade ago. Guess it did become essentially another power center.

          Reply
  4. Alex Pline

    Interesting that the commenter above mentions this was in the spot of a mountain top removal. I was going to say that power centers to me are the equivalent to strip mining. They are terrible by just about any measure except they are great for people who use cars as prosthetic devices. The buildings are throw away, they are horrible places to walk or bike with large “block size” and many curb cuts so even if there is a side walk it’s neither pleasant nor safe, and there is lots of infrastructure to maintain. When they are done sucking whatever is valuable from the area they exist in/on, they close up and are a blight of crumbling asphalt at best or a environmental mess (in the case of a mismanaged gas station) at worst.

    Reply
    1. AmericanDirt Post author

      It doesn’t sound like you’re a big fan, Alex. Me neither–obviously. But, considering how many redeveloped dead malls become some variant of a power center, I suspect they’re going to keep growing in number before they start retreating. And even when they recede (which the inevitably will), it’ll be cold comfort, since it will leave an even more unsightly by-product than your averaging hulking dead mall.

      It’s as though commercial developers have given up trying to make something aesthetic or creative or endowed with that dreaded cliché “sense of place”. All we get with power centers is convenience. As if malls were somehow inconvenient.

      Reply

Leave a Reply

Your email address will not be published. You are not required to sign in. Anonymous posting is just fine.