Dying shopping malls are wreaking havoc on suburban America

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Rolling Acres Mall in Akron, Ohio.
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Nicholas Eckhart

Rolling Acres Mall in Akron, Ohio, opened in 1975 to great fanfare as the premier shopping destination for the surrounding community.

But customer traffic started to slow more than a decade ago, several department stores abandoned their leases, and the mall began to fail. It lost its last store tenant in 2013.

Over that period, the mall was the scene of several crimes. A homeless man was sentenced to a year in prison for living inside a vacant store, another man was electrocuted trying to steal copper wire from the mall, and the body of a likely murder victim was found behind the shopping center.

The mall was still vacant last year, and it remained a safety concern – the mayor of Akron instructed residents in July to “stay clear of the area.” The city began the process of demolishing the rotting shopping center in late October.

Like Rolling Acres, shopping malls across the country are dying, and, in some cases, leaving jobless communities and rotting buildings that are hotbeds for crime in their wake.

Dozens of malls have closed in the last 10 years, and many more are at risk of shutting down as retailers like Macy’s, JCPenney, and Sears – also known as anchor stores – shutter hundreds of stores to staunch the bleeding from falling sales.

The commercial-real-estate firm CoStar estimates that nearly a quarter of malls in the US, or roughly 310 of the nation’s 1,300 shopping malls, are at high risk of losing an anchor store.

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Many storefronts in the struggling Regency Square Mall in Richmond, Virginia, have gone dark.
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Business Insider/Hayley Peterson

When anchor stores close, it can be hard to find businesses to replace them, because they occupy the multistory buildings at mall entrances that are often at least 100,000 square feet. If no replacement tenant is found, the loss could trigger a decadeslong downward spiral for the shopping mall and surrounding communities.

“The communities wither away, and they never come back,” said Howard Davidowitz, chairman of Davidowitz & Associates, a national retail consulting and investment banking firm headquartered in New York City.

When anchor stores are boarded up, traffic to the retailers in the middle sections of malls tends to decrease. That has been happening at shopping malls nationwide, and now many retailers are going out of business and closing their stores as a result.

Within the last couple of months, several mall-based stores – including American Apparel, Abercrombie & Fitch, The Limited, Bebe, BCBG, and Wet Seal – have announced mass closures.

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Skye Gould

The process of a shopping mall shutting down is slow, often over the course of a decade or more. As stores are boarded up one by one, shopper traffic slows and crime in the area tends to spike, Davidowitz says.

“Malls are big, big contributors to city and state taxes, jobs, and everything,” Davidowitz said. “Once they close, they are a blight on the community for a very long time.”

Kevin Zent, 59, of Memphis, Tennessee, said that crime is a huge problem at malls near his home and that he no longer shops at them as a result.

“Cars are keyed randomly in mall parking lots, and there is not enough security to provide the level of safety a family wants while they are at the mall,” he told Business Insider.

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Rolling Acres Mall in Akron, Ohio, in 2014.
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Nicholas Eckhart

There were 890 reported crime incidents at one Memphis-area mall between January 1, 2012, and July 15, 2015, according to an investigation last summer by the local NBC affiliate WMC Action News.

Zent said he believes that crime is the biggest reason mall traffic has declined in the last decade, though many analysts attribute those declines to shoppers’ changing preferences and the rise of online shopping.

Studies show that Americans are increasingly choosing to spend money on technology and experiences like vacations over apparel. When they shop for clothing, an increasing number of them are going to discount stores like TJ Maxx or ordering from Amazon.

“The shopping that used to be done in the mall is now at Family Dollar, Dollar General, Dollar Tree, TJ Maxx, and Walmart,” Davidowitz said.

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The food court at Regency Square Mall in Richmond, Virginia.
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Business Insider/Hayley Peterson

Along with potential upticks in crime, dying malls can lead to building vacancies in the areas immediately surrounding them.

For example, Regency Mall in Augusta, Georgia, closed in 2002. Fifteen years later, most of the properties along Gordon Highway where it’s located are also vacant, according to WJBF. This has made it difficult to persuade developers to consider renovating the mall.

In best-case scenarios, malls will redevelop anchor spaces and find tenants able to pay even higher rents, like restaurants or apartment complexes. The likelihood of this outcome is much higher in affluent urban areas.

Two developers are trying to make this kind of redevelopment happen at Regency Square Mall in Richmond, Virginia, which has lost more than a dozen tenants and two Macy’s stores over the last several years. The mall’s JCPenney and Sears stores remain open, but multiple stores in the middle of the mall have gone dark.

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A former Macy’s entrance at Regency Square Mall in Richmond, Virginia, now features a boarded-up wall and a vending machine.
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Business Insider/Hayley Peterson

The developers that own the mall have proposed a $35 million plan to raise the roof of the former Macy’s buildings to make room for a possible movie theater and trampoline park.

Mark Slusher, senior vice president of Thalhimer Realty Partners, which owns the mall with The Rebkee Company, explained the idea behind the proposal at a recent meeting with local government officials.

“The buzzword is experiential retail,” Slusher said, according to The Richmond Times-Dispatch. “We are trying to create a new experience and bring people in, to attract them to the Regency experience. What that means is we need theaters and craft breweries and restaurants and trampoline parks and laser tag – things that people can experience in real life to compete with the internet. That’s becoming our big competitor now – the web. We want to give people real life experiences.”

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Business Insider/Hayley Peterson