A tale of two lifestyle centers: What is the future of the shopping mall?

It’s no secret that modern retail is a changing landscape. Today many shopping centers are grappling with declining foot traffic and store closures, which has them looking to solutions that serve the needs of both retailers and consumers. 

That’s the case for one mall in Fort Wayne's backyard. Jefferson Pointe is a 600,000-square-foot, open-air lifestyle center, featuring more than 60 shops and restaurants, including a two-story Von Maur department store and a movie theater.

The Mediterranean-style development has been a destination for shopping, entertainment, and dining since it opened in 2000.

Jefferson Pointe is an outdoor lifestyle center on Fort Wayne's southwest side.

But a lot has changed in the retail in the last 20 years, so developments like Jefferson Pointe have to adapt or risk becoming irrelevant.

Global management consulting firm McKinsey & Company acknowledged this truth about five years ago when it issued an article called "The future of the shopping mall."

"The world of retail is changing dramatically, but the mall still can have a central role in urban and suburban societies," the article says. "Mall operators must expand their horizons of what a mall can be. They must envision themselves no longer as real estate brokers, but instead as customer-facing providers of shoppable entertainment."

So what should the modern shopping mall look like?

In some cities, developers are turning malls into neighborhoods by adding apartments or other mixed-use amenities to make them the center of local life.

Earlier this year, Jefferson Pointe’s developer, Red Development, announced plans for a different type of change: Adding a street with a roundabout through the interior of the shopping center. 

The proposed road would run through the center of Jefferson Pointe in what is now pedestrian space.

While the road will technically take square-footage away from the mall's current pedestrian space, Jeff McMahon, a partner with RED Development, says it is actually expected to be a boon to pedestrian traffic at the shopping center.

That’s because the road will offer consumers the benefits of additional parking and convenience, making them more inclined to stop at the mall.

McMahon says another reason for the road is that Jefferson Pointe's current infrastructure no longer works for the property. Despite having many vacant storefronts, the mall's parking lot is already technically “overparked” by city and universal retail standards. 

Therefore, attracting additional retailers requires updating the mall's parking infrastructure.

“What we want to improve is the convenience of parking by making more stalls convenient to the customers and the retail storefronts,” he explains. “With more connectivity between parking areas and additional stalls, we expect parking to function much more efficiently.”

McMahon is also hopeful that current and prospective tenants will share in the wealth, too.
“A good plan for Jefferson Pointe has to start with the retail that is already there, and introducing a pedestrian-friendly main street will be the spark plug for the interior shops, which have struggled in past years due the challenges faced in today’s retail environment,” he says. “Additional parking immediately adjacent to those shops will provide today’s shopper with the kind of convenient access that they demand, and the road itself will be designed to create an engaging streetscape that remains pedestrian friendly.”

McMahon adds that while RED Development is committed to adding the roadway, that doesn’t mean they are going to stop there. 

“We also like the idea of adding other types of uses to the shopping center, like apartments," he says. "We will continue to analyze the market for any other uses that could be added to Jefferson Pointe and to analyze how they could fit into the center.”

Jefferson Pointe has village-like architecture, which could make it ideal for mixed-use development.

For the time being, he is confident that this move will pay off in the short term. 

“We’ve evaluated a number of different possibilities for improving Jefferson Pointe and determined that this is the most impactful first-step necessary to sparking its revival and making it what we all know it can be.”  

A retail project in the works in the Boston-area might offer some inspiration for what Jefferson Pointe could be in the future, but on a smaller scale. 

Arsenal Yards (formerly known as Arsenal Mall) is a planned mixed-use, smart growth development in Watertown, Mass. The Wilder Companies and Boylston Properties are the developers behind the project. 

Arsenal Yards looks to create a "neighborhood experience" in Watertown, Mass.
Plans for Arsenal Yards call for 1-million square feet of development, including 250,000-square-feet of curated shops and eclectic eateries, 200,000-square-feet of new and existing creative office and life science space, 300 contemporary apartments, and a 150-room Hampton Inn & Suites by Hilton. Leasing for the apartments will begin in spring 2020. 

The housing part of the project may be the secret sauce to reactivating the space, according to the teams at Wilder and Boylston Cos. who responded via their PR department.
"We're committed to providing more housing in Watertown, especially in its East End," a statement from the team says. "Fifteen percent of the apartment homes will be designated affordable housing, 2 percent more than the state requires."

Beyond the accessibility factor, they say the move to add housing to the mix may help to infuse some life into the current anemic retail climate. 

"There is a lot of headwind in the retail world because of Amazon and e-commerce," they explain. "Arsenal Yards is the antidote to that because we are creating the next great neighborhood experience with a variety of functional attributes that contribute to a resident's day-to-day living."

In other words, they are subscribing to the "build-it-and-they-will come" model when it comes to attracting both consumers and tenants.
"We're able to bring in this mix of uses of dining, retail, fitness, personal services, entertainment, and offer the convenience and instant gratification of online shopping, paired with the added excitement from the uniquely eclectic experience."

They say that retailers are enthusiastic about the project "due to the on-site experience being created and by the mix of best-in-class tenants being curated."
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