Citation
Downtown pedestrian malls and transitways

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Title:
Downtown pedestrian malls and transitways identification of factors influencing success or failure and steps toward an evaluation of malls in urban economic development
Creator:
Chesney, Virginia
Publication Date:
Language:
English
Physical Description:
107, [3] leaves : ; 28 cm

Subjects

Subjects / Keywords:
Shopping malls -- Economic aspects -- Case studies ( lcsh )
Central business districts -- Economic aspects -- Case studies ( lcsh )
Shopping malls -- Economic aspects -- Case studies -- Colorado ( lcsh )
Central business districts -- Economic aspects -- Case studies -- Colorado ( lcsh )
Central business districts -- Economic aspects ( fast )
Shopping malls -- Economic aspects ( fast )
Colorado ( fast )
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Case studies. ( fast )
bibliography ( marcgt )
theses ( marcgt )
non-fiction ( marcgt )
Case studies ( fast )

Notes

Bibliography:
Includes bibliographical references (leaves 108-110).
General Note:
Cover title.
General Note:
Submitted in partial fulfillment of the requirements for the degree, Master of Planning and Community Development.
General Note:
Typescript.
General Note:
Appendix in pocket: Questionnaire.
Statement of Responsibility:
by Virginia Chesney.

Record Information

Source Institution:
University of Colorado Denver
Holding Location:
Auraria Library
Rights Management:
All applicable rights reserved by the source institution and holding location.
Resource Identifier:
10789980 ( OCLC )
ocm10789980
Classification:
LD1190 .C43 ( lcc )

Full Text
DOWNTOWN PEDESTRIAN MALLS AND TRANSITWAYS: IDENTIFICATION OF FACTORS INFLUENCING SUCCESS OR FAILURE AND STEPS TOWARD AN EVALUATION OF MALLS IN URBAN ECONOMIC DEVELOPMENT
Date Due
BY
VIRGINIA CHESNEY
A thesis submitted in partial fulfillment of the requirements
for the degree of
MASTERS OF PLANNING AND COMMUNITY DEVELOPMENT UNIVERSITY OF COLORADO DENVER, COLORADO May, 1984
ARCHIVES
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TABLE OF CONTENTS
INTRODUCTION
METHODOLOGY
RESPONDENT PROFILE-MALLS, CITIES AND TRADE AREAS STUDIED
A. Geographical Distribution of Respondents
B. Trade Areas
C. Cities
D. Malls
SURVEY FINDINGS: FACTORS WHICH MOST INFLUENCE MALL SUCCESS OR FAILURE
A. Correlation Analysis
B. Retailing Conditions
1. Variety and Quality of Goods Offered
2. Evening Activity on the Mall
3. Ability or Failure to Compete
4. Increased Number of Stores Downtown
C. The Market for the Downtown Mall
1. Square Feet of Office Space
2. Government, Medical & Educational Facilities
3. Downtown Residential & Worker Population
4. Percent of Mall Patrons Earning Less Than $15,000
D. Access to Downtown
1. Public Transportation
2. Parking Availability
3. Bypass to Adjacent City
E. Trade Area Trends
1. Trade Area Trends
2. Character of Trade Area Economy
F. Mall Planning
1. Citizen Input
2. Feasibility/Market Study
G. Mall Design
1. Mall Location
2. Design Elements
H. Mall Costs and Benefits
1. Method of Financing
2. Maintenance By Assessment District
3. Increased Property Tax Revenues-new construction
4. No Fiscal Benefits
5. Mall Key to Increased Revenues


I. Other Findings: Influential Factors Not
Identified by Correlation Analysis 52
1. Role of College Students 52
2. Role of Tourists 54
3. Role of Downtown Residents 54
4. Role of City Size 55
5. Role of Resident and Patron Income 56
6. Role of Resident and Patron Ages 57
V. CASE STUDIES: A CLOSER LOOK AT TWO COLORADO MALLS 59
I. BOULDER: SUCCESSFULLY CHANGING ITS RETAIL
FUNCTION 59
A. History and Conditions Leading to Mall
Development 59
1. Strong Retail Image 60
2. Citizen Input 60
3. Mall Legislation, Parking and a City Vote 61
4. Final Mall Plan 62
B. Mall Performance 63
1. Retail Sales 63
2. Crossroads Mall 64
3. Downtown Study 64
4. Increased Property Values 65
5. New Construction 65
6. New Market for Downtown Mall 66
7. Continued Success 66
II. DENVER: OVERCOMING DOWNTOWN WEAKNESSES 67
A. History and Socio-Economic Conditions 68
1. Initial Mall Planning 68
2. Downtown Development Policies 69
3. Downtown Denver Assets 70
4. Downtown Population 71
5. Office Development 72
6. Area-wide Trends 73
7. Downtown Denver's Weaknesses 73
8. Mall Financing 74
B. Mall Design 75
1. Shuttle System 75
2. Mall Management 77
3. Mall Appearance 78
C. Mall Performance 79
1. Retail Sales Gains 79
2. Increased rents 80
3. Retail Space Changes 80
4. Property Tax Revenues - New Construction 81
5. Property Tax Revenues - Renovations 82
6. The Tabor Center 83
7. Pedestrian Traffic and Shuttle Ridership 84
8. Retail Retention 85


VI. CONCLUSIONS: ASTUTE TIMING AND APPROPRIATE MALL
CHARACTER ESSENTIAL IN THE FACE OF DECENTRALIZATION 90
A. Decentralization of Retailing 90
B. Changing Function of the CBD 92
C. Timing and Character Are Keys to Mall Success 95
1. "Too little, too late." 95
2. "Mistaken Identity" 96
D. Checklists for Mall Success . 99
E. Fiscal Impact of Malls 100
1. Retail Sales Tax Revenues 102
2. Property Tax Revenues 103
3. Hotel Tax Revenues 104
4. Parking Lot Revenues 104
5. Increased Occupancy 105
6. Increased Pedestrian Traffic 105
7. Increased Mass Transit Usage 105
8. Private Investment 106
F. Cities Can Not Afford "Failure Malls" 107


LIST OF TABLES
Page
Table A. Respondent Malls 17
Table B. Trade Area Demographics 18a.
Table C. Table Area Economy 18a.
Table D. City Populations 18b.
Table E. Downtown Resident Demographics 18b.
Table F. Mall Data 22a.
Table G. Mall Financing 22a.
Table H. Mall Patron Demographics 22b.
Table I. Comparison of Mall Patron and Resident Demographics 22b.
Table J. Factors and Their Correlations with Success 25a.-
Table K. Have These Factors Helped or Hindered Mall Success? 58a.
Table L. Trade Area Trends 58b.
Table M. Boulder Retail Sales 64a.
Table N. Boulder Assessed Valuations 64b.
Table P. Conditions and their Implications for Mall Timing and Character 98 a.
Table Q. Essential Steps to Planning a Successful Mall 98e.
Table 0. Fiscal Benefits 104a.
APPENDIX A. Questionnaire LIST OF FIGURES 108
Figure : 1 . Geographical Distribution of Respondents 13a.


I.
INTRODUCTION
This study is an evaluation of the use of pedestrian and transit malls in cities as stimulants for downtown economic revitalization. The study focuses on renovation? and modifications of existing retail areas rather than on newly constructed, self-contained downtown malls or "festival centers" built in areas of the city which have not historically been retail districts.^
The initial thesis prompting this study was that pedestrian and transit malls in traditional downtown retail districts generally are not fiscally viable and represent a drain on local and federal revenues. While central cities across the country are jumping on the "downtown pedestrian mall" bandwagon and collecting federal funds to make their projects possible, many of the cities at the front of the parade are tearing out their malls or going back to the federal government for additional funds to restructure their failing malls.
Downtown malls represent a public investment not dissimilar to the investments made in highways, particularly by-passes, in
1. Five broad categories of downtown retailing are identified as: retail restructuring; festival retailing; expansion of conventional retailing; retail combined with other uses; and renovation and upgrading of existing corriders in Black, J. Thomas; Howland, Libby; and Rogel, Stuart L., Downtown Retail Development: Conditions for Success and Project Profiles (Wash-
ington, D.C.: Urban Land Institute, 1983 p. 2


the past thirty years. They are both public investments which shape metro area growth. The federal investment in beltways stimulated suburban residential, retail and business growth, and contributed to the decline of central city downtowns across the nation. Now, in the past twenty_years, in an effort to save our traditional downtowns, the federal government is helping cities build pedestrian and transit malls, as well as other downtown facilities, to stimulate new economic development downtown.
The number of mall failures in the recent past, and the uniformity of the malls constructed, suggests that cities are failing to evaluate their particular downtown conditions sufficiently prior to mall construction. Each failure represents an unnecessary drain on public funds. A major objective of this study, then, is to identify the factors which contribute to a mall's success as well as the factors or conditions which trigger mall failures so that methods for evaluating proposed malls can be formulated, and mall failures can be avoided.
At the outset of this study, I proposed that successful malls depend on strong trade area economies, a high degree of tourism, active and captive college student populations, downtown commuters and downtown cultural and entertainment facilities for their success. I further ventured to hypothesize that a city's chances for success or failure with a mall could be predicted by analyzing trade area and city trends such as population
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growth or decline, absolute population, average trade area household incomes, trade area average buying power, the degree of competition from adjacent cities and other regional shopping centers in the trade area, the character and strength of the trade area economy, and other factors. This study was designed to test these theories, and to identify other influential factors.
For the purposes of this study, mall success was defined as the mall's ability to generate revenues for the local government. Increased property tax revenues, sales tax revenues, hotel tax revenues, and municipal parking lot revenues were considered the prime measures of a mall's success. While this study recognizes that a mall can contribute many other less quantifiable benefits to a city, it is assumed that all benefits eventually become expressed as fiscal benefits. For example, if a mall has successfully strengthened the image of a city's downtown, new investors will become interested in development in the downtown and this will result in increased property tax revenues for the city.
After studying malls across the nation through a questionnaire survey designed for this study, I have come to some conclusions which diverge from my original theses. Many of the factors I felt were critical to a mall's success or failure have, in fact, little influence. The public costs and benefits
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attributable to a mall are difficult to accurately quantify; many of a mall's benefits to a city are indirect and can only be attributed to the mall's presence after extensive research into the dynamics of the specific city.
During analysis of the survey results, two trends became quite clear: 1) the retail function is decentralizing and can not be stopped by downtown pedestrian and transit malls, and, 2) the downtown is evolving into an office, entertainment and cultural center rather than a retail center. The timing of mall construction and the character of development on the mall in relation to the status of these trends in a specific city are the key factors in determining the success or failure of a mall.
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{


II. METHODOLOGY
A questionnaire survey was the main source of information for this study. However, before the questionnaire was designed, a literature review of sources on downtown malls was completed. The literature review facilitated the identification of the major issues concerning downtown malls and revealed the conclusions drawn to date about downtown malls.
The major sources consulted in this phase of research were:
The Rediscovery of the Pedestrian-- 12 European Cities; A Handbook for Pedestrian Action; Banning the Car Downtown Selected American Cities; and American Urban Malls, A Compendium all by Roberto Brambilla and Gianni Longo for the Institute for Environmental Action, Columbia University. Also used were Volumes 1 4 of Downtown Malls: An Annual Review, edited by Laurence A. Alexander; and the Urban Land Institute publication. Downtown Retail Development: Conditions for Success and Project Profiles.
QUESTIONNAIRE DEVELOPMENT
Development of questions for the questionnaire survey was guided by the objectives of this study, as well as by a concern for keeping the questionnaire manageable for those receiving it. The format design was meant to organize the survey so it would make sense to the respondents and so that it would not seem too
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demanding. Many questions originally proposed were deleted because they were too involved or difficult for casual respondents. The questions chosen for inclusion in the survey were chosen because they not only related to the study's objectives but also were likely to get responses. Whenever information could be gleaned from a source other than the questionnaire respondent, the question was dropped from the questionnaire. The questionnaire was largely composed of checklists. Several "fill-in-the-blank" questions requesting the respondent to fill in percentages, numbers of people or numbers of dollars were also used. One intensity scale and a few open-ended questions were also included.
The final result was an eight-page 7" x 8.5" booklet-styled questionnaire containing thirteen questions. The questions were divided into broad categories: Fiscal Impact; Success Factors; Trade Area Info.; Demographics; and Costs. Each of these categories filled one page. The last page was designated for comments regarding the questionnaire or the subject mall. The front page was a letter to the recipient and the back page was designed with the return address so that the questionnaire could be folded into a self-mailer. Each survey was pre-stamped and addressed for easy return. The letter on the front page offered respondents the opportunity to request a summary of the study results and to indicate if
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they would be interested in participating in a more in-depth case study of their mall. These opportunities were offered to the questionnaire recipients as an incentive for them to complete the questionnaire thoroughly. (See Appendix A for a copy of the questionnaire form). Each letter was personally signed to add an element of personal contact to the survey.
DISTRIBUTION AND RESPONSE
Mailing lists of cities with pedestrian or transit malls were obtained from Brambilla's America Urban Malls, A Compendium, from the Downtown Mall Directory included in Volume 3 of Downtown Malls: An Annual Review and from a listing of the members of the International Downtown Executor's Association obtained from the Denver Partnership. One hundred twenty-five questionnaires were sent to 93 different cities; when more than one address was available for a city, two and in a couple of cases, three, questionnaires were sent to different addresses in the same city. The addresses used included city planning departments, Chamber of Commerce offices, private management groups and others who had been known to be involved in the development or management of the mall in their city. Nineteen questionnaires were returned as undeliverable by the postal service. Due to the use of more than one address for some cities, however, the "returned as undeliverable" surveys resulted in only eight cities not receiving questionnaires. Thus it can be assumed that 85 cities
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received the questionnaire.
Three weeks after the first mailing, a follow-up mailing, including a personally signed letter of reminder and a second copy of the questionnaire was mailed to the cities which had not responded. The initial response, after three weeks, was 29%. Responses received after the follow-up mailing brought the response rate up to 48%. The "second mailing" questionnaires were printed on a different color of paper so that it would be possible to evaluate the effectiveness of the followup mailing. Sixty-four percent of the responses received after the follow-up mailing were on the white-colored "second mailing questionnaire form.
Of the 41 responses received, 37 were complete enough to be included in the computerized analysis of the questionnaire responses. Thus, the effective rate of response for the computerized analysis was 44%, while the response rate for the study as a whole was 48%. A response rate of 40 to 50 percent
on a mail questionnaire is considered good by authoritative ? 3
sources. However, Babbie suggests that response rates are less important than a demonstrated lack of response bias.
2. Lininger, Charles A. and Warwick, Donald P., The Sample
Survey: Theory and Practice (New York: McGraw-Hill, Inc., 1975)
p. 129.
3. Babbie, Earl R., The Practice of Social Research, 2nd Ed. (Belmont, California: Wadsworth Publiching Co., Inc., 1979) p. 335.
-8-


SURVEY STRENGTHS AND WEAKNESSES
The questionnaire proved to be a very good survey instrument. It elicited a good response rate and those who responded were enthusiastic; 43% of the respondents added comments about their malls on the page designated for comments, and many cities sent additional information about their malls and their cities with their questionnaire response. Responses came from a wide variety of geographical locations, city sizes and degrees of mall success. Respondents were able to follow the instructions for answering questions and this resulted in consistent responses. There were very few cases of mis-interpreted questions. In terms of analysis, the structure of the questionnaire questions lent itself easily to coding and to computer analysis.
Both nominal and interval-level data were generated, allowing for a variety of computer analyses.
One weakness of the questionnaire was that most of the respondents were unable to complete the "Costs" section of the survey. However, many respondents were able to provide an agency name or phone number where the information might be obtained as requested on the questionnaire. Two questions were wrongly formulated: in requesting the percentage of downtown residents
and the percentage of mall patrons, the possibility of being exactly 25 years of age is excluded. The categories offered are "under 25" and then "26 45". To overcome this mistake in
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the analysis of these percentages, it was assumed that the first category, "under 25" included those patrons and residents who are 25 years old. Another oversight was the omission of "increased sales tax revenues" as a possible fiscal benefit realized by cities after mall construction in Question #2.
It was originally thought that this information could be gathered from responses to the "Costs" questions, but a lack of response to this section made it impossible to accurately determine whether or not cities had seen increased sales tax revenues. This omission limits an important aspect of the study because the role of sales tax revenues in contributing to the fiscal success of malls can not be accurately determined.
COMPUTER ANALYSIS
The questionnaire responses were coded and 37 variables containing information gleaned from other sources were added to each case. A total of 140 variables for each city were fed into the computer. The Statistical Package for the Social Sciences (SPSS) program was used to analyze the data generated. Four SPSS sub-programs were utilized: frequencies, crosstabs, scattergrams and new regression.
As the questionnaire distribution was not designed to generate a random sample, but was determined by the availability of addresses, the responses received can not be considered a
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random sample, and thus, are not subject to tests of statistical significance. However, no biases are demonstrated by the responses received, and the "sample" can be considered a valid, though not scientifically selected, representation of downtown malls in the United States.
Levels of statistical significance as reported by the computer analyses were taken into consideration when interpreting the results generated by the crosstab, scattergram and regression sub-programs, but the main statistics used for interpretation of the computer output were the Chi Square, Pearson's R and the R "squared" measures of association. If these measures of association revealed a strong relationship between the variables being tested, the variables were likely to be considered important even if the relationship showed a poor level of statistical significance.
The analysis of the questionnaire responses rests heavily on responses to one question in the survey. That question (Question #4) asks cities to rate the success of its mall in facilitating downtown economic revitalization. All other variables in the questionnaire were tested against the responses to this question to determine what factors most influenced the ranking of the mall. In the crosstab, scattergram and regression analyses, the perceived rate of success of the mall is the dependent variable.
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TELEPHONE INTERVIEWS
Telephone interviews were used to contact some of the respondents who had supplied their names and phone numbers on their questionnaire responses. The interviews were used to clarify and expand on the information received, and to add depth to the study by exposing some of the unique situations at work in individual cities.
CASE STUDIES
Two Colorado cities, Boulder and Denver, were studied in more depth to reveal some of the less obvious factors at work in mall success or failure. These studies also allowed an assessment of local malls. The case studies involved telephone and personal interviews as well as field research. Written materials produced by or for the agencies responsible for mall management, such as market and feasibility studies, were also used. Visits to the assessor's office and the sales tax department in Boulder were necessary to obtain the revenue information included in the Boulder case study.
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III. RESPONDENT PROFILE-MALLS, CITIES AND TRADE AREAS STUDIED
The respondents to this survey represent a wide range of geographical areas, trade area and city sizes, base economies, income levels and mall types. In most aspects, the respondents' median demographics compare closely with national medians.
The typical respondent mall in this survey is located in a gradually growing trade area in the Midwest. The median income in the trade area is close to the national average and the trade area relies on "agriculture, fisheries, forestry and mining" or "manufacturing" for its economic base. The city in which the mall is located is faring less well than the trade area. The city has experienced a slight decrease in its population since 1970, and the incomes of the downtown residents are low. The mall was built in 1970 for the purposes of revitalizing the declining downtown. Most of the cost of the mall was paid by the merchants and the city; the federal government paid 1% of the mall's initial costs. This mall's city has given the mall a "success rating" of "5" on a scale of 1 to 10 for its performance in facilitating downtown revitalization.
The malls studied are discussed in this paper in three different groupings for the sake of allowing comparisons and adding meaning to the data collected. The groupings are: the total sample, the Success Group, and the Failure Group. The Success Group is comprised of the eleven cities which rated their mall's success as greater than 7 on a scale of 1 to 10. The Failure Group includes twelve cities which were rated below 4 on the same scale.
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FIGURE 1
GEOGRAPHICAL DISTRIBUTION OF RESPONDENTS
Failure Group
Success Group
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GEOGRAPHICAL DISTRIBUTION OF RESPONDENTS
Of the total sample of 41 respondents, cities in the Southeast and Midwest are most heavily represented (22% and 28% respectively), followed by North Central cities and Pacific States cities (17% and 13%). The West, Southwest and Northeast all commanded 10% or less of the total sample. (See Figure 1)
Success Group. The Southeast and the Midwest are even more heavily represented in the Success Group than in the total sample. No respondents from the Southwest or the Northeast rated their malls highly enough to be included in the Success Group.
Failure Group. Respondents from the Pacific States are overrepresented in the Failure Group, while respondents from the Midwest and Southeast are underrepresented. No respondents from Western states are in the Failure Group.
TRADE AREAS
The trade area of a respondent was defined as the Standard Metropolitan Statistical Area (SMSA) when the city surveyed was part of an SMSA. If the city was not in a SMSA, the trade area defined by the 1983 Editor and Publisher Market Guide was used. Where possible, the City Zone (corporate limits and contiguous areas built up adjacent to or surrounding the main city) plus the Retail Trading Zone (the area beyond the City Zone whose residents regularly trade with retail merchants in the City
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4
Zone) were used. In a few cases, neither a SMSA or Market Guide trade area exist, so the county of the city was used. Table A. lists the malls surveyed with their cities and trade areas.
The trade areas range in population from 21,763 to 4,695,055 (1980). The malls surveyed are generally located in trade areas which have experienced some population growth since 1970. The median growth rate for the trade areas included in the survey was 2%. Between 1979 and 1980, the mean population for the trade areas surveyed decreased while the median in-careased; this indicates that the smaller trade areas are increasing in size while the larger trade area populations are leveling off, and in twp cases, decreasing.
The survey trade area trends are consistent with national trends. Many metropolitan areas, particularly in the Northeast and North Central regions, declined in population between 1970 and 1980. Losses were most prevalent in the large metropolitan areas. Smaller metropolitan areas grew, however, resulting in
a national median population increase for metropolitan areas of 5
8%.
4. Senk, Gertrude A., Editor, 1983 Editor and Publisher Market Guide (New York: Editor and Publisher Co., Inc., 1982)
5. Black, J. Thomas; Howland, Libby; and Rogel, Stuart L., Downtown Retail Development: Conditions for Success and Project Profiles (Washington, D.C.: Urban Land Institute, (1983) p. 7
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The median trade area household income for the areas surveyed in this study is $26,295- This compares with an esti-
g
mated 1983 national median household income of $26,250. The surveyed trade area median household incomes ranged from $18,342 to $38,076. The Success and Failure Groups did not differ greatly from the total sample in their trade area household incomes; the Success Group median trade area income is $25,608, the Failure Group median trade area income is $26,548.
6. Senk, 1983 Editor and Publisher Market Guide, p. IV-1.
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RESPONDENT MALLS
TABLE A.
Page 1 4/9/84 SUCCESS
MALL NAME CITY TRADE AREA RATING
Nicollet Mall Minneapolis, MN. Minneapolis-St. Paul SMSA 10
Kalamazoo Mall Kalamazoo, MI. Kalamazoo SMSA 10
Redding flail Redding, CA. Shasta County 8
Downtown [fell Toccoa, GA. Stephens County 8
Downtown Plaza Freeport, IL. City + Retail T 8
Last Chance Mall Helena, MT. Retail Trade Zone;Lewis and Clark Co. 8
Exchange Street Mall Raleigh, N.C. Raleigh-Durham 8
Ithaca Camions Ithaca, N.Y. Retail Trade Zone;Tanpkins County 8
Central Tulsa Pedestrian Mall Tulsa, OK. Tulsa SMSA 8
Coffee St. Mall Greenville, S.C. Greenville SMSA 8
Main Street Mall Charlottesville, VA. Charlottesville SMSA 8
Fulton Mall Fresno, CA. Fresno, SMSA 7
Redlands Plaza Redlands, CA. Riverside, SMSA 7
Penn Square Reading, PA. Reading SMSA 7
Downtown Boulder Mall Boulder, CO. Denver SMSA 6
Town Clock Plaza Dubuque, IA. City + Retail Trade Zone 6
Downtown Mall Erie, PA. Erie SMSA 6
Fourth St. Mall Sioux City, IA. Sioux City SMSA 5
Downtown Plaza Salisbury, MD. City + Retail Trade Zone 5
Downtown 'fell Greenvilie, NC. City + Retail T Pitt County 5
Gordon's Alley Atlantic City, N.J. Atlantic City SMSA 5
Progress Place Jackson, MI. Jackson SMSA 5
Captain's Walk New London, CT. New London SMSA * 4
Jefferson St. fell Burlington, IA. Des Moines County 4
Mid-America Mall Memphis, TN. Memphis SMSA 4
Calendar Court Mall LaGrange, IL. Cook County 3
Franklin Square fell Michigan City, IN. Retail Trade Zone 3
Downtown Mall Lake Charles, LA. Calcasieu Parish SMSA 3
Rone fell Rome, NY. Utica-Rome SMSA 3
Main Street Mall Spartanburg, SC. Greenville SMSA 3
City Center Mall Coos Bay, OR. Retail Trade Zone, Coos County 2
Westminster fell Providence, RI. Providence SMSA 2
Stone Place fell Dallas, TX. Dallas SMSA 2
Plaza 8 Sheboygan, WI. Sheboygan SMSA 2
Plaza Park Mall Oxnard, CA. Oxnard SMSA 1
Fort Street Mall Honolulu, HI Honolulu SMSA 1
Parkway Mall Napa, CA Vallejo SMSA N.A.


Retail sales per household were calculated for trade areas to determine if this factor influences the success of a downtown mall. The median retail sales per household in the trade areas surveyed is $13,080. The trade areas' Buying Power Index and Effective Buying Income were also included as factors which might affect the success or failure of a downtown mall.
The Buying Power Index is a weighted index that converts three elements population, effective buying income and retail sales --into a measurement of a market's ability to buy, and expresses it as a percentage of the U.S./Canada potential. Effective Buying Income is a term used by the Editor and Publisher Market Guide to describe disposable household income (household income after taxes). It was found that these factors have no influence over the performance of a downtown mall; however, the median values for these factors can be found on Table B.
The character of the economies in the trade areas surveyed include all of the economic activities described by the Standardized Industrial Code. Many of the trade areas include more than one of the economic activities as part of their economic base.
The most frequently mentioned category of activity is "agriculture, forestry, fisheries and mining" followed by "manufacturing." "V7holesale trade" and "government and military" were also listed with some frequency." "Retail trade," "transportation, utilities and communication," "services," "contract construction,"
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TABLE B. TRADE AREA DEMOGRAPHICS
TOTAL SUCCESS FAILURE
SAMPLE GROUP GROUP
Household Income $ 26,295 $ 25,608 $ 26,548
Retail Sales/Household $ 13,080 $ 12,980 $ 11,500
Buying Power Index .1046 .0492 .1559
Effective Buying Income $ 22,748 $ 23,027 $ 23,622
1970 Population 201,550 77,640 309,930 1980 Population 205,894 113,568 334,402 % Change Population 2% 46% 8%
Source: Survey Results
TABLE C. TRADE AREA ECONOMY
TOTAL SUCCESS FAILURE
SAMPLE GROUP GROUP
Agri., Forestry, Fish., Mining
Construction Manufacturing Trans., Utilities Wholesale Trade Retail Trade Finance, Insurance,
Real Estate Services Govt., Military
46% 60% 36%
3% 0% 0%
37% 20% 64%
17% 0% 18%
34% 40% 36%
23% 30% 36%
3% 0% 9%
14% 20% 9%
29% 40% 27%
Source: Survey Results
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TABLE D. CITY POPULATIONS
TOTAL SAMPLE SUCCESS GROUP FAILURE GROUP
1970 Population Pop. Range 48,484 6971 -844,401 38,880 6971 -434,400 49,316 14,130 -844,401
1980 Population Pop. Range 48,085 9104 -904,078 45,010 9104 -443,350 48,156 '14,424 -904,078
% Change Pop. -1% 16% -2%

#CBD Mall Workers Prior to Construction 5050 8000 2825
#CBD Workers Current 6992 9750 1075
Source: Survey Results
TABLE E. DOWNTOWN RESIDENT DEMOGRAPHICS
TOTAL SUCCESS FAILURE
SAMPLE GROUP GROUP
Current Resid. Pop. 2488 1200 2500
Resid. Pop. Prior 2005 450 2100
AGE
< 26 24% 10% 30%
26-45 29% 30% 24%
46-65 26% 30% 20%
>65 15% 17% 17%
INCOME
<15,000 48% 30% 47%
15,000-45,000 45% 50% 15%
>45,000 4% 5% 0%
"OCCUPATION"
Students 5% 5% 1%
Downtown Employees 25% 42% 2%
Other 50% 50% 80%
Source: Survey Results
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and "finance, insurance and real estate" were all mentioned by less than 25% of the sample.
The Failure Group trade areas are predominantly manufacturing areas. The Success Group areas depend upon "agriculture, fisheries, forestry and mining," wholesale trade and government or military activities for their economic stability.
CITIES
The cities in the sample range in population from 6,971 to 844,401 (1980). The median population in 1980 was 48,085. Many of the cities surveyed experienced a decline in population between 1970 and 1980. The median rate of change for the cities sampled was -1%. U.S. Census figures for 1980 show an overall 6% decrease in the populations of the nation's central cities between 1970 and 1980.
The Success Group cities tend to be smaller but have experienced greater rates of growth than have the total sample and the Failure Group cities.
The cities as a whole have seen an increase in their downtown residential populations since their malls were constructed. The median downtown residential population grew from 2005 to 2488 after malls were constructed; this represents a 24% increase.
The surveyed cities have also experienced a median 38% in crease in the numbers of downtown workers since mall construction.
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The median worker population has grown from 5050 in 1970 to 6992 in 1980. The Success Group has a significantly greater median number of downtown workers than the total sample (see Table E.)
Cities were asked for information about their downtown residents in order to gather information about the city's primary market for their mall. Table E. provides median percentages for each age group, income bracket, and for the "occupations" held by downtown residents. The cities surveyed tend to have populations which are widely distributed among the age groups.
The household incomes tend to be low; a median 48% of downtown residents earn less than $15,000 per household. A median 25% of those living downtown also work downtown. Students comprise a median 5% of the downtown population while "other" occupations claim a median 50% of the population. Many cities explained that their "other" occupation figure largely represented retired people, however it can not be assumed that all residents included in the "other"category are retired.
The Success Group cities tend to have fewer residents under 26 years of age and fewer residents earning less than $15,000 than the total sample. Conversely, the Failure Group cities have greater numbers of residents under 26 years of age than the totalsample as well as more residents earning less than $15,000. None of the Failure Group cities have residents earning more than $45,000.
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MALLS
The malls studied were constructed between 1959 and 1982.
The survey sample includes the first mall constructed in the United States (Kalamazoo, Michigan) as well as one of the most recently constructed malls (Denver, Colorado). Half of the malls included in the computer analysis were built prior to 1970, and half were constructed after 1970.
The malls are a median 79,200 square feet in size. Eighty-three percent of the malls surveyed are pedestrian malls; 8% are transit malls; and the remainder are combinations or other types of malls.
Mall construction cost a median $11.47/square foot. This finding compares closely with an earlier study of fifty-five malls which reported a median square foot cost of $11.55. The costs of mall construction are typically shared among a variety of sources; however, cities paid a median 24% of the costs and the federal government footed a median 1% of the costs. Most cities (63%) used city bonds for at least a part of their financing. Forty-two percent used assessment districts to raise funds. Thirty-three percent used urban renewal funds; thirty-three percent also used some form of private financing. Maintenance costs
7. Alexander, Laurence A., Ed., Downtown Malls: An Annual Review, Vol. 2. (New York: Downtown Research and Development Center, 1976).
-21-


are almost entirely borne by the cities, though 21% of the cities share maintenance responsibility with an assessment district. (See Table G.).
Mall patrons differ from downtown residents in that they tend to be between the ages of 26 and 65 with higher incomes than the median downtown resident. Only a median 10% of the malls' patrons are also downtown residents.
The malls rely on downtown commuters for their market; a median 72% of mall patrons are downtown commuters. Tourists and students each make up a median 10% of the malls' patrons.
The Success Group malls differ from the total sample in that they tend to have been built more recently, are smaller and cost more per square foot to build. The Failure Group malls, on the other hand, were built earlier than the median mall in the total sample, cost quite a bit less to build, and are larger (see Table F.).
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TABLE F. MALL DATA
TOTAL SAMPLE SUCCESS GROUP FAILURE GROUP
Year Built 1970 1973 1969
Year Built Range 1959-1976 1959-1976 1965-1974
Mall Cost $1,065,000 $1,130,000 $701,500
% City Paid 24% 23% 23%
% Fed Paid 1% 30% 7%
Size 79,200 sf 72,600 sf 86,900 sf
Cost/Foot $11.47 $14.68 $6.98
Mall Type Ped 83% Ped 80% Ped 90%
Trans 8% Trans 9% Trans 10%
Source: Survey Results
TABLE : G. MALL FINANCING
TOTAL SUCCESS FAILURE
METHOD OF FINANCING SAMPLE GROUP GROUP
Urban Renewal 33% 44% 22%
Assessment District 42% 44% 56%
Private Financing 33% 33% 22%
City Bonds 63% 78% 56%
Other Federal 8% 0% 11%
Other 8% 11% 0%
City 92% 89% 100%
Assessment District 21% 44% 0%
Other 8% 0% 0%
Source: Survey Results
-22a-


TABLE H. MALL PATRON DEMOGRAPHICS
TOTAL SUCCESS FAILURE
AGE GROUPS SAMPLE GROUP GROUP
<26 12% 13% 15%
26-45 30% 30% 29%
46-65 30% 31% 30%
>65 10% 14% 11%
INCOME
<15,000 26% 21% 40%
15,000-45,000 56% 59% 50%
>45,000 10% 19% 10%
"OCCUPATION"
Downtown Residents 10% 10% 6%
Downtown Commuters 72% 79% 67%
Tourists 10% 9% 3%
Other .6% 1% 7%
% Students 10% 10% 10%
Source: Survey Results
COMPARISON OF TABLE I. MALL PATRON DEMOGRAPHICS
TO DOWNTOWN RESIDENT DEMOGRAPHICS
AGE GROUPS MALL PATRONS TOTAL SAMPLE DOWNTOWN RESIDENTS TOTAL SAMPLE
<26 12% 24%
26-45 30% 29%
46-65 30% 26%
>65 10% 15%
INCOME
<15,000 26% 48%
15,000-45,000 56% 45%
>45,000 10% 4%
"OCCUPATION"
% Students 10% 5%
Source: Survey Results
-22b-


IV. SURVEY FINDINGS: FACTORS WHICH MOST INFLUENCE MALL SUCCESS
OR FAILURE
This study was predicated on the assumption that certain ingredients within a city or trade area specifically influence the success or failure of a downtown mall in that area. To determine which factors most influence the success or failure of a mall, each variable in the survey was correlated with the success rating given the mall. The ingredients originally thought to be influential include: a nearby college and college student population; a healthy tourist trade in the area; a large downtown commuter population; a large and affluent downtown residential population; the presence of governmental, medical, cultural and entertainment facilities downtown, and certain economic and other trends within the city and trade area. The correlation analysis confirmed the importance of some of these factors and disproved others it also revealed several other highly correlated factors which were not previously believed to be critically influential to mall success or failure. This section examines each of the factors which was found to be moderately or highly correlated with the success or failure of the malls surveyed, and discusses the reasons for the correlation. In many cases, the differences between the responses of the Success Group and the Failure Group clearly show why a given factor is considered important to a mall's
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performance. Other information gleaned from analysis of the survey results and from respondents' comments also aided in interpreting the relationship between the variables and mall success or failure.
CORRELATION ANALYSIS
Out of 105 variables selected for analysis from the responses to the questionnaires and other research completed for each mall, 24 variables were found to be moderately to highly correlated with the success rating given a mall by its city.
Table J. shows the correlation coefficients for the 105 variables considered. Those variables with a correlation coefficient value greater than .50 or less than -.40 are considered to be significantly correlated with the success of the mall. The strength of the correlation between a factor and mall success increases as the correlation coefficient values approach 1; thus, those factors with correlation coefficient values closest to 1 are the factors which are most influential to mall success. Factors with negative correlation values are inversely related to mall success; in other words, the factors with relatively high negative correlation coefficient values are strongly associated with mall failures.
In the interests of providing a cohesive explanation of the highly correlated variables, the variables have been broken into categories which make it possible to better explain the
-24-


role they play in influencing mall success or failure. However, they are not necessarily discussed in the order of the strength of their correlation with success. The correlation coefficients are included in parentheses with the description of each variable, and the variables are listed in order of the strength of their correlations in Table J.
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CORRELATIONS WITH SUCCESS RATING
TABLE J.
VARIABLE CORRELATE
Evening activity on mall .68
Mix of stores .62
Regional shopping center competition .62
Mall Key factor in stimulating fiscal growth .61
Trade area trends .60
Area economy .59
Downtown residential and worker population .59
Increasing number of stores downtown since mall .59
Mall maintenance by assessment district .582
Downtown government, medical and educational facilities .58
Parking availability _ .57
Market study prior to construction .57
Financing method .57
Citizen input during planning .57
Public transportation .56
Design elements .56
Mall location .55
Square feet office space prior .548
Square feet office space year 5 .544
New highway connection to adjacent cities since mall .53
Govt, cultural, medical services locating downtown since mall .53
Increased property tax revenues due to new construction .507
Stores moving out of downtown since mall .50
Mall planning agency .49
Entertainment & cultural facilities .48
New highway connection to adjacent cities prior to mall .48
Historic buildings on mall .47
Architectural character of other buildings .47
Adjacent cities had improved downtowns prior to mall .47
Government, medical and educational services downtown prior to mall .47
New regional shopping center in trade area prior to mall .46
Square feet office space current .460
Convention/tourist trade .45
Increased hotel tax revenue .435
Stores moving into downtown prior to mall .43
Increased property tax revenues due to renovation/expansion .413
Per cent residents earning more than $45,000 .372
Adjacent cities improved downtowns after mall .37
New regional shopping center since mall .37
Stores moving out of downtown prior to mall .34
-25a-


Per cent residents earning between $15,000 45,000 .331
Use of other methods of financing .329
Per cent mall patrons earning between $15,000- 45,000 .274
Size of student population .261
Increased municipal parking lot revenue .257
Square feet retail space year 5 .247
Use of city bond financing .238
Per cent change in city population 1970 1980 .204
Use of urban renewal funds .196
Per cent of mall patrons who are tourists .192
Per cent residents between 26 45 .187
College in trade area .180
Economic revit. the motivation for mall .167
Square feet retail space current .162
Per cent of mall patrons who are downtown commuters .161
Number downtown workers prior to mall .151
Per cent mall patrons earning more than $45,000 .148
Government, military economy _ .139
Per cent retail sales attributable to tourists .136
Agriculture, forestry,fishing, mining economy .133
Age of mall .116
Number of downtown workers current .114
Construction economy .113
Mall cost per square foot .111
Per cent residents between 46 65 years old .104
Per cent paid by federal government .078
Per cent residents more than 65 years old .078
Mall maintenance by other agency .068
Square feet retail space prior .059
Number downtown residents currently .054
Per cent of mall patrons over 65 years old .053
Wholesale trade economy .043
Services economy .040
Number downtown residents prior to mall .035
Number residents who are students .029
Use of assessment district financing .020
Distance of college from mall .019
Per cent residents with other "occupations" .015
Per cent mall patrons 25 years old or younger .011
Per cent of mall patrons who are students .010
Per cent change trade area population 1970 1980 .008
Per cent mall patrons between 26 45 years old -.01
Mall size -.013
Use of private financing -.01
Average effective buying income in trade area -.025
Initial cost of mall -.03
-2 5b-


Per cent of mall patrons who are downtown residents -.06
Retail sales per trade area household -.06
Per cent residents earning less than $15,000 -.08
Retail trade economy -.10
Mall maintenance by city -.12
Per cent paid by local government -.171
Buying power index for trade area -.17
Per cent mall patrons between 46 65 years old -.21
Transportation, utilities, communication economy -.21
Finance, insurance, real estate economy -.23
Per cent residents 25 years old or younger -.243
Trade area household income -.24
Per cent of mall patrons with other "occupations" -.30
Manufacturing economy -.32
Per cent maintenance paid by the city -.36
Per cent of mall patrons earning less than $15,000 -.42
No fiscal benefits realized -.61
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RETAILING CONDITIONS
As a group, the following variables (mix of stores, evening activity, ability to compete with regional centers and stores moving downtown) explain a lot about the retailing conditions which help and hinder downtown malls. This survey has found that downtown malls need not compete with regional shopping centers if the downtown mall can offer a unique environment and goodsand services which can not be found in the more predictable suburban regional centers.
The mix of stores and quality of goods offered on the downtown mall are extremely important to the mail's success; however, that mix of stores and goods does not have to adhere to the classic "anchor department stores linked by smaller chain shops" pattern found in the suburban centers. Where anchor stores can be attracted, they certainly add to a mall's success, but many of the most successful malls have found success without including large department stores. Other types of anchors can be used to attract a market to the mall. The important element for a downtown mall is the creation of a strong retail identity which is unique to the downtown center. In addition, vacancy rates should be kept low. This frequently means replacing a large department store space with several smaller shops. The findings show that keeping store spaces active is a better strategy for mall success than is holding a large space open for an extended
-26-


period of time until another department store can be attracted to the space.
Variety and Quality of Goods Offered: Mixture of Stores (Cor-relation= 62): The high correlation of this factor with mall success is more attributable to responses indicati.ng that a poor mixture of stores had been detrimental to their mall's success than to an overwhelming number of responses attributing their mall's success to a good mixture of stores. Seventy percent of the Failure Group reported that their mix of stores had hindered the success of their mall. It is also clear that the more successful malls have a better mixture of stores; only 26% of the total sample indicated that the mixture of stores had been helpful to mall success while 46% of the Success Group reported that the mix of stores on their malls had been key to their mall success.
Judging by the mix of stores on the most successful malls, it appears that mall success depends more on a strong retail identity, be it a theme or a diverse group of specialty shops, than on the presence of large, anchor department stores. Where anchor stores can be attracted they contribute significantly to success; however, the absence of anchor stores does not pre-determine the failure of a mall as many cities assume. Helena, Montana's Last Chance Mall is an example of a highly successful mall which depends upon shops which focus on art and gifts. Its rustic
-27-


pioneer setting, two theaters, a playhouse, over twenty restaurants and a new hotel make it a tourist attraction in the summer and an enjoyable shopping experience for residents year
g
round. In Atlantic City, the privately-developed Gordon's Alley overcame formidable downtown decline with a mall#composed of one non-department store anchor and about thirty-five specialty shops and restaurants. The developer attributes the mall's success to: a good major tenant which sets the mood for the area; the
creation of a distinct environment; different stores for different people; security; good restaurants; and the creation of an identity for the area.
It may be that the large percentage of Failure Group malls which cited a poor mixture of stores as a key obstacle to their success are assuming that a good mixture of stores is one that mimics the suburban pattern of anchor stores linked by small specialty shops.
Evening Activity on the Mall (Correlation= .68): This factor
was found to be the most influential variable on the success of a mall. It is interesting to note that only one respondent, the Nicollet Mall in Minneapolis, Minnesota, credited the availability of evening as well as daytime activity as a key contributing
8. Gordon's Alley was rated a "5" for downtown revitalization but a "10" for neighborhood revitalization in the questionnaire response from Murray Raphe1, the mall developer.
-28-


factor to the mall's success. The high correlation of this factor with mall success comes from the fact that 77% of the respondents indicated that a lack of evening activity had significantly hindered the success of their malls as well as from the fact that Minneapolis, the one city which claims to have some evening activity on or near its mall, rated its mall's success a "10".
While evening activity is the most highly correlated factor with mall success, it can not be assumed that the presence or absence of evening activity will make or break a mall. What this finding does show is that cities consistently feel evening activity to be a missing factor which, if integrated into their malls, would appreciably improve their success.
Ability or Failure to Compete with Area Regional Shopping Centers (Correlation: .62): Very few malls claimed to be able to compete with area regional shopping centers and 63% of the total sample cited their inability to compete as an obstacle to the success of their mall. In significant contract, however, fifty-five percent of the Success Group indicated that the ability to compete with regional shopping centers was not key to their success or failure. This seems to indicate that the more successful malls aim to serve a different market than the regional shopping center, perhaps through
-29-


specialty shops, restaurants and opportunities for urban entertainment.
When the responses to this question are viewed with the responses to the question about "mix of stores" (above), some speculations about mall dynamics can be made. The Success Group malls tend to create a market for themselves while the Failure Group malls seem to struggle to emulate the suburban shopping mall and to compete with these regional centers. The Success Group malls and the Failure Group malls have experienced comparable losses of downtown stores since mall construction (See Table L. ), but the Success Group has managed to replace their losses with new, smaller shops, while the Failure Group has not (See discussion under "Increased Number of Stores Downtown Since Mall Construction, pg. 31). If, in fact, the Failure Group malls are pursuing the suburban model for their downtowns, the successes of other malls in this survey which have abandoned the suburban model and have successfully created unique downtown environments through their malls should be considered as a new model to imitate.
Survey results also indicate that the timing of mall construction can play a role in its ability to compete with regional shopping centers. Two of the Failure Group cities (Coos Bay, Oregon and Salisbury, Maryland) volunteered comments stating that their mall's construction was in direct response to recent
-30-


construction of a suburban mall. In contrast, two of the Success Group cities (Kalamazoo, Michigan and Freeport, Illinois) commented that their malls had been constructed prior to the decline of downtown retailing.
Increased Number of Stores Downtown Since Mall Construction ( Correlation= .59): Cities which reported an increase in the number of stores downtown were much more likely to rate their mall's success as high than were cities which have not experienced an increase in the number of downtown stores. 90% of the Success Group respondents reported an increased number of stores since mall construction. This contrasts dramatically with the fact that 87% of the total sample reported that it has not seen an increased number of stores since mall construction.
It is important to note, however, that increases in retail square footage downtown are not strongly, and in fact are weakly, correlated with mall success. The Success Group respondents tend to show slight decreases in downtown retail square footage since mall construction but also display a steadier square footage over a period of time than respondents in the total sample.
This suggests that successful downtowns are rapidly replacing losses with new stores; the fact that this process results in a greater number of stores, but a decrease in total retail square footage, indicates that stores with larger square
-31-


footages are being replaced with smaller stores. The prevalence of this trend among the most successful malls further supports the theory that downtown malls do not have to include the large square footage department stores in order to be successful.
THE MARKET FOR THE D0WNT0V7N MALL The downtown worker population is clearly the most important market for successful downtown malls. It is evident that as downtown residential populations have declined and downtown office development has boomed, the workers have replaced the residents as the major market for the downtown retail district. The survey also found a relationship between the affluence of the mall patrons and the success of a mall. The survey findings further suggest that downtown facilities such as government and civic buildings, medical and educational facilities are most important to mall success for their role in providing additional downtown workers. The following variables are market-related variables which were found to have a high correlation with a mall's success rating:
Square Feet of Office Space Prior to Mall Construction and At Year Five of Mall Operation (Correlation= .54) : The questions
producing these variables asked for the amount of leasable office space on the mall for the year prior to mall construction, the fifth year of mall operation, and the current year. The third variable in this set, "square feet of office space currently,"
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was not found to be as highly correlated with success as the other two, but its correlation is moderate and there is no indication that the square footage of current office space differs significantly from the other variables in the set in its affect on success.
Another question asked for the amount of leasable retail space on the mall for the same time periods. The three variables produced by this question are all poorly correlated with mall success. This situation makes the moderately high correlation of the office space variables even more significant. It appears that the amount of office space available on the mall is of much more importance to a mall's success than is the amount of retail space. The Success Group malls have an average of almost three times as much office space in the mall area as do malls in the total sample, and eight times more office space than Failure Group malls
All of the respondents experienced an increase in office
space over the past approximately ten years. The Success Group,
interestingly, did not experience a greater rate of growth than
the total sample or the Failure Group. The Failure Group realized
the greatest increase (65%); the total sample experienced a 48%
9
growth rate and the Success Group saw a 38% rate of growth.
9. A 1980 Urban Land Institute survey of fifty cities found a 50% increase in downtown office space between 1970 and 1980. Black, Downtown Retail Development (Urban Land Institute, 1983) p.7
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The high correlation of office space with mall success seems to point to the need for the captive market created by downtown offices; the presence of this market is more influential to mall success than is the presence of large amounts of retail space.
Downtown Government, Medical and Educational Facilities (Corre-lation= 58) : The survey queried cities about two types of facilities which might influence the success of a downtown pedestrian mall: government, medical and educational facilities were considered in one category, and cultural and entertainment facilities were the second category. Cities were asked in two different questions if 1) government, medical and educational facilities downtown had helped or hindered their mall's success and 2) if these services had been located downtown prior to and/ or since mall construction. Respondents were also asked to indicate whether or not cultural and entertainment facilities had helped or hindered their mall's success. All of the facilities mentioned are considered to be services or employers which would bring people downtown; once downtown these people become a market for the downtown mall.
The responses to the questions concerning governmental, med-cal and educational facilities were found to be moderately to highly correlated with mall success. The presence of entertainment and cultural facilities on or near the mall was less strongly
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correlated with mall success. Fifty-four percent of the total sample reported that the presence of governmental, medical and educational facilities downtown had been key contributors to the success of their malls, while only 20% of the total sample reported that entertainment and cultural facilities on or near the mall had significantly added to their success.
The lack of a more positive response to the question regarding the role of cultural and entertainment facilities in the success of a mall can be partially explained by the fact that this choice was immediately preceded by the choice, "availability of evening as well as daytime activities.". Because the respondent was limited to choosing ten influential items (five positive and five negative factors) from a list of nineteen, it may be that respondents chose the "evening activity" choice rather than the "cultural facilities" choice to explain their mall's situation. It is clear that cities feel evening activity is important to mall success (evening activity is the factor most strongly correlated with success). Cultural and entertainment facilities on or near the mall are an obvious asset to encouraging evening mall activity.
These responses indicate that cities find those facilities (government, medical and educational) which produce downtown workers to be more beneficial to mall success than facilities which generate visitors. The presence of governmental, medical
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and educational facilities is certainly a characteristic of successful mall cities: 80% of the Success Group report that these services have been locating in their downtowns since mall construction, and 69% of this group report their presence downtown prior to mall constructions.
There is no distinct difference in the responses of the Success Group and the Failure Group regarding this variable. The strong correlation between the presence of government, medical and educational facilities and success is explained by the fact that a majority of the total sample (54%) reported that these facilities had helped their success. This situation suggests that cities perceive the presence of these facilities as important, but that perhaps they are not, by themselves, instrumental to mall success.
In addition, both sub-groups overwhelmingly indicated that government, medical and cultural facilities have been locating downtown since mall construction.10 The consistency of this response amoung the sub-groups indicates that there is an all-pervasive trend of government, medical and cultural facilities locating downtown.
There is no indication that the success of a mall stimulates this trend or that these facilities alone can significantly influence the success of a mall.
Character and Size of Downtown Residential and Worker Population (Correlation- .59): The computer analysis of this factor clearly shows that the downtown populations in cities with successful malls had contributed to the mall's success (55%) while the character or
10. Eighty percent of the Success Group and 86% of the Failure Group reported facilities had located downtown since mall construction.
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size of the downtown populations in cities with poor mall success had hindered mall success (40%).
The number of downtown workers has a greater effect on success than does the size of the downtown residential population.
As shown in Table E. (pg.l8b )r the Success Group cities have a median downtown worker population nine times the size of the median worker population for Failure Group cities, and a 30% larger worker population than the total sample. The Failure Group cities have larger median downtown residential populations but show a slower rate of population increase than the Success Group cities.
Percent of Mall Patrons Earning Less Than $15,000 (Correlation= -.42):
The correlation analysis revealed that malls with high percentages of mall patrons earning less than $15,000 have low success ratings.
In general, the survey findings confirmed the natural assumption that malls with higher-income patrons are more likely to be successful
The Success Group cities had lower percentages of mall patrons earning less than $15,000 and higher percentages of patrons earning between $15,000 and $'45,000 or earning more than $45,000 than the total sample or the Failure Group malls.
ACCESS TO DOWNTOWN
Almost all central cities suffer from accessibility problems. Public transit is often inconvenient. Downtown land values make close-in parking extremely expensive if not prohibitive, and the congestion of downtown streets further discourages drivers.
-37-


Bypasses, originally built to relieve some of the downtown congestion, take people away from the downtown and create convenient new locations for outlying regional shopping centers. Overcoming these constraints is not an easy task for even the most successful malls.
While the majority of the total sample indicated that access issues are of critical importance to their mall's performance, the survey also found that the Success Group tends to feel "public transportation to and from downtown" and "parking availability" are not key to their success or failure. This lack of concern may be attributable to the fact that the Success Group cities tend to be smaller cities, making public transportation less necessary for adequate access to the downtown. In addition, the Success Group cities tend to rely on downtown workers for their success; these downtown workers have generally overcome the obstacles of getting downtown in order to get to their jobs. Once downtown, they are a captive mall market.
While poor accessibility eventually affects the numbers of downtown workers (firms won't locate downtown if accessibility is poor), it has a more immediate effect on the numbers of "out of city" shoppers who will bother to come downtown to shop. Malls which rely on outside shoppers and visitors are more dramatically affected by poor accessibility than are malls which largely serve the downtown workers.
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Three survey variables relating to mall accessibility
were found to be highly correlated with mall success:
Public Transportation To and From Downtown (Correlation= .56): Fifty-one percent of the total sample reported that their public transportation system had helped mall success. However, the greatest number of these positive respondents are from the Failure Group; 50% of the Failure Group felt public transportation had helped their malls succeed to the extent that they have, but only 27% of the Success Group felt public transportation had contributed to their success, and significantly, 46% of the Success Group indicated public transportation was not a key factor either way.
The high correlation of this factor with success is attributable to the fact that a majority of the total sample feels it is important to mall success; however, it must be noted that the most successful malls show a different attitude toward public trans portation than the remainder of the respondents. It seems that in the most successful cities, public transportation is not a critical factor in mall success. In the Success Group an equal number of respondents cited their public transportation systems as a hindrance as cited it a help, yet these malls all manage to succeed.
Parking Availability (Correlation= .57) Sixty-six percent of the total sample cited parking availability as a key ingredient in the success of their malls. Ninety percent of the Failure Group
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felt parking availability had helped their malls have what success they had had. It is interesting to note, however, that only 36% of the Success Group felt parking availability had been key to their success and 27% of this group felt that parking availability was not important in determining either success or failure for a mall. This divergent response from the Success Group may be indicative of the fact that the most successful malls have attractions which are strong enough that their success is not made or broken by the presence of convenient parking.
An Urban Land Institute study found that in cities with effective transit systems, parking availability is not critical for success. The study states that parking is important for malls which are dependent on tourists and suburban residents and is critical for cities which do not have effective transit systems.
New Bypass or Highway Connection to Adjacent Cities Since Mall Construction (Correlation= .53); Almost all of the respondents reported there has been a bypass or highway connection built to an adjacent city either prior to or since mall construction. Because a majority of the successful malls have experienced this situation, the computer analysis found this factor to be moderately correlated with success. But, a fuller understanding of the role of this factor is possible if one studies the situation of the Failure Group. Failure Group cities tended to have a lower percentage of bypasses prior to mall construction (44% as opposed to
-40-


56% for the Success Group), but a higher percentage of bypasses since mall construction (63% vs. 50%). This, then, partially explains the failure of the Failure Group malls. Most of the Success Group malls were built after a bypass had been constructed and could plan their mall in accordance with this situation; the Failure Group malls, however, were generally constructed without the hindrance of a bypass and thus, were built in accordance with different access and market conditions than currently exist for the downtown.
In addition, the construction of a bypass after investment in a downtown mall indicates an inconsistent local attitude about the importance of the downtown. It is likely that this attitude has resulted in other local actions which have also contributed to the failure of the mall.
TRADE AREA TRENDS
Previous studies have found that trade area trends undoubtedly influence the success or failure of a new downtown mall. A downtown mall, which, for instance, depends upon commuters for its patrons will suffer if the trade area buying power decreases. However, the results of this study's survey show little correlation between specific trade area factors, such as buying power or population, and mall success. Two questions which asked in general terms if trade area trends had influenced mall success were found to be highly correlated with mall success.
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As mentioned, other trade area data gathered from the survey failed to show any meaningful correlation with the success rating of the malls. The following factors all showed weak inverse relationships with mall success: the trade area Buying Power Index (-.17); the average trade area household income (-.24) average trade area retail sales per household (-.06); and the average trade area effective buying income per household (-.025). The percent change in trade area population between 1970 and 1980 had a very weak positive correlation with mall success (.008).
All of these are factors which would be given considerable weight in a market study evaluating the potential for a new shopping mall. The consistency with which these factors failed to explain the performance of the malls in this study suggests that the use of SMSA statistics in evaluating the market for a mall is incorrect. The implications of this study's results are that a downtown mall must be evaluated on the basis of a smaller trade area. Downtown mall market or feasibility studies may be more accurate if a trade area defined by the area within perhaps a five, ten of fifteen-mile radius of the mall location (or preferably a trade area defined by the specific access and population characteristics of the city) were used rather than the entire SMSA
With this modification, it is believed that the trade area factors mentioned above would correlate strongly with the success ratings of malls and would aid in the determination of the appropriate character for a mall. Where the trade area statistics
-42-


show strength, the mall can expect to benefit from providing shopping opportunities for "out of the city" shoppers, i.e. suburbanites who travel to the city for shopping excursions.
Where trade area characteristics are weak, mall planners need to focus on other markets.
It can also be assumed that the character of the trade area economy influences the success of a mall and should be considered in planning the character of mall development.
Common sense dictates that trade areas where the white-collar industries such as finance, insurance and real estate dominate the economy would better support a downtown mall than would areas where agriculture and mining are the dominant industries. However, the results of this study's survey do not support this logic. This result may again be due to the wide definition of trade area used; perhaps the dominant industries in an area closer to the city should be examined rather than the larger regional economy.
The two following variables were the only trade area variables found to be highly correlated with success:
Trade Area Trends. (Correlation= .60): While the majority of the total sample as well as majorities of the Success Group and the Failure Group indicated that economic and other trends within their trade area were not key determinants of their mall success or failure, the high correlation of this factor with success is triggered by the fact that none of the repondents
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in the Failure Group reported that trade area trends had helped their success, but 40% reported that trade area trends had been detrimental to the performance of their malls. This compares with only 9% of the Success Group reporting trade area trends to be detrimental.
Character of Trade Area or Regional Economy. (Correlation^ .59)
As with trade area trends, a great majority of the total sample and both sub-groups indicated that the character of the trade area economy had not been influential in determining the success or failure of their mall. However, the Failure Group again reveals a hidden correlation between a factor and mall success;
40% of the Failure Group reported that the character of the area economy had hurt their mall's success while only 9% of the Success Group respondents reported the economy to be a detrimental factor.
The survey results (see Table C, pg. 18a.) show that mall failure is most closely associated with manufacturing areas while mall success seems to occur more frequently in trade areas where agriculture, forestry, fisheries and/or mining are the dominant industries. Service industries and government and military economies are also somewhat more associated with success than with failure.
MALL PLANNING
Though the survey respondents were apparently hesitant to
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recognize these factors, the inclusion of citizen input and a feasibility/market study in mall planning are instrumental to the success of a mall. According to the results of this survey, cities which include the citizenry in their planning are more likely to meet with mall success than are cities which do not solicit citizen input. The success of malls where input was a part of planning may be attributable to citizen loyalty developed through involvement in the project's conception and development. If residents have been involved in planning the mall, they are more likely to frequent it.
A good feasibility/market study prior to mall construction is also important to a mall's success. A good percentage (40%) of the Failure Group cities attributed their lack of success in part to the lack of a good study prior to mall construction.
Citizen Input During Mall Planning and Construction (Correlation = .51): The majority of respondents did not feel citizen input was a key factor to the success or failure of their malls. However, of those who cited it as either a factor contributing to success or one contributing to failure, the greatest number chose it as a factor contributing to success. This factor's moderately high correlation with successful malls is attributable to the fact that none of the Failure Group malls cited it as an element in their "success" while 20% of that group felt that a lack of, or the poor quality of, citizen input had hindered their success.
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By comparison, in the Success Group only 9% felt citizen input or a lack of it had hindered their success; 36% felt it had helped their success.
Feasibility/Market Study Completed Prior to Mall Construction (Correlation= .57): The great majority of respondents in the total sample as well as the sub-groups indicated that a feasibility or market study prior to mall construction was not a key influential factor to either success or failure. The high correlation of this factor with mall success comes from the fact that none of the Success Group respondents cited the market study as a detriment to success while 40% of the Failure Group reported that a lack of or the poor quality of their market studies had been detrimental to their success.
MALL DESIGN
The design of the mall is also important to a mall's success. The survey findings show that the "small" design features such as street furniture, lighting, paving, landscaping and signage are more important to a mall's success than the presence of historic buildings or the architectural character of other buildings on the mall. The importance placed on the "small" design features may indicate the importance of pedestrian amenities (e.g. benches, sidewalk cafes) in attracting people to the mall.
Mall location was also found to be associated with success, and, if an inappropriate location is developed, can be a deciding
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factor in the failure of a mall. Cities must beware that the
traditional location may not serve the current market. The "old downtown" district should not be chosen as the location for a downtown mall if it is no longer accessible to the market it aims to capture.
Mall Location (Correlation= .55): The moderate to high correlation of this factor with success is attributable to a consistent positive response from all groups and to the fact that none of the Success Group respondents cited mall location as a hindrance to their success. Further, 20% of the Failure Group felt that their mall location had hindered their success.
Design Elements (Correlation^ .56): This factor includes design elements of the mall such as paving materials, street furniture, landscaping and lighting but does not include the architectural character of mall buildings. Architectural character and the presence of historic buildings on the mall are design elements which were addressed by other survey choices and which did not correlate as highly with success as did the "smaller" design elements. The correlation of this factor with success is fairly clear 51% of the total sample felt "design elements" had contributed to the success of their mall; 50% of the Failure Group cited this factor as beneficial, and 64% of the Success Group felt design elements had helped their malls' success. In addition, none of the Success Group repondents reported that design elements had been
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detrimental to their success.
"Architectural character of mall buildings (other than historic)" and "historic buildings" on the mall both show some correlation with mall success but are clearly not considered as key as the smaller design elements discussed above. The great majority of respondents considered the architectural character of mall buildings to be insignificant to their mall's success or failure (71% of the total sample). Eighty-two percent of the Success Group indicated that architectural character is unimportant.
The response to "historic buildings on the mall" was slightly more positive: 51% of the total sample deemed it an unimportant factor while 46% of the Success Group respondents felt it was unimportant. These responses are difficult to explain particularly in light of responses to other factors which indicate downtown mall success depends on the creation of a distinctive urban environment. Perhaps respondents felt that the "design elements" choice encompassed all of these factors.
MALL COSTS AND BENEFITS
As is suggested by the definition of success for this study (Success = positive fiscal impact on the local government), the lower the costs of a mall to a city, the greater the positive fiscal impact is likely to be. If a city spends little of its financial resources on the mall but realizes increased tax revenues from the operation of the mall, the fiscal impact on the city is
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immediately positive. On the other hand, if a mall's construction is financed through tax-increment financing or other methods which defer the fiscal benefits of the mall to the city, the mall can not be considered successful until the debts for its construction are paid. Thus it is obvious that the cities judged most succes-ful in this survey are those which have utilized federal and assessment district funds for a large part of their mall's construction and maintenance costs.
Successful mall cities have consistently seen new construction downtown as a result of mall construction. The mall is perceived as the key factor in stimulating this development, as well as the other fiscal benefits realized by these cities since mall construction. This finding indicates that downtown malls are commonly the lead character in urban revitalization strategies. While the mall can not be successful without office, residential or visitor markets to support it, survey results show that the mall is instrumental in stimulating the development of the facilities which ultimately provide the mall's patrons. The following cost or benefit variables were found to be highly correlated with success:
Method of Financing for Construction and/or Maintenance (Correlation = .57): None of the respondents in the Failure Group reported that the method of financing their mall had helped the success of their mall; in contract, 45% of the Success Group cited "method of financing" as a contributing factor in their success. The Success Group malls used city bond financing 15% more frequently than the
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total sample and urban renewal funds 11% more frequently. The Success Group cities tended to use more combinations of financing, e.g. spreading the costs of construction between the federal government, the city and an assessment district or private funding sources.
Financing for maintenance of the Success Group malls comes largely from the city, as it does for the total sample, however, the Success Group cities pay less of the total cost of maintenance than do the other cities in the sample. Failure Group cities unanimously pay 100% of their maintenance costs.
Mall Maintenance by Assessment District (Correlation= .58): The two major methods reported for mall maintenance are 1) maintenance by the city and 2) maintenance by an assessment district. Many cities use a combination of these methods, however, the computer analysis shows that the lower the city percentage of maintenance costs and responsibility, the higher the success rating of the mall. This is consistent with the study's definition of success as positive fiscal impacts for the local government: the lower the city costs, the greater the net city revenues from the mall.
Increased Property Tax Revenues Due to New Construction (Correlation = .51): This variable comes from a list of choices concerning the types of fiscal benefits a city has experienced since mall construction. "Increased property tax revenues due to new construction" is more highly correlated with mall success than are "increased
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property tax revenues due to expansion or renovation of previously existing structures," "increased hotel tax revenues,", increased municipal parking lot revenues," and "other" revenues. With all of the fiscal benefit choices there is a clear line between the Failure Group and the Success Group: the results for each choice show that the Failure Group mall cities have consistently failed to realize fiscal benefits since mall construction.
The Success Group malls have, almost without exception, realized property tax revenues from new construction as well as from renovations. Seventy-three percent of the Success Group cities have experienced increased property tax revenues from new construction since the mall was built. This contrasts dramatically with the Failure Group cities, of which only 17% have seen increased revenues due to new construction.
No Fiscal Benefits Realized by the City Since Mall Construction (Correlation= -.61): The correlation analysis confirms the fact that cities which do not see any fiscal benefits as a result of mall construction have low rates of success. This result is, of course, largely determined by the study's definition of Mall Success (see above definition).
Mall Has Been The Key Stimulant of Recent Increased Revenues for the Local Government (Correlation= .61): In cities where revenue increases have been realized since the construction of their downtown mall, a full 90% of the Success Group indicated that their mall
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had been the key factor in stimulating the fiscal growth. This compares with 43% of the total sample. It is only natural that in a study where success is defined as the "positive fiscal impact on local government" the most successful malls would be those which have produced a positive impact; what is significant in this finding is that the most successful malls seem to be considered the key stimulants to fiscal growth as opposed to simply being a component of a larger downtown revitalization strategy.
OTHER FINDINGS: INFLUENTIAL FACTORS NOT IDENTIFIED 3Y CORRELATION ANALYSIS:
The correlation analysis confirmed the importance of a large downtown commuter population; the presence of government, medical, educational and cultural facilities downtown; and trade area trends as originally postulated by this study. It disproved the assumed importance of nearby colleges and college students; tourists; and a large and affluent downtown residential population in determining the success of a downtown mall. The survey findings can not tell the whole story, however, and further examination of the role of each of these factors, as well as others identified by the computer analysis or through the comments of respondents, is necessary to draw reasonable conclusions about the factors influencing the success and failure of malls in the United States today.
Role of Colleges and College Students: Colleges and their student populations are a potential captive market for downtown malls,
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and can add the kind of color and activity which makes a downtown mall come alive.
In the questionnaire survey, cities were asked if there is a college within their trade area; 78% responded that there is at least one college within their trade area. The average distance of these colleges from the mall is 2.8 miles; 54% have colleges 2 miles or closer to their mall, and 29% have colleges within 1 mile of the mall. Despite an average student population of 11,047 at these colleges, the malls attract only an average 10% of these students as patrons. The survey results show a slight tendency for cities with colleges within one mile of the mall to rank their malls with a higher success rating than cities where the colleges are farther away.
While students generally do not have high levels of disposable income, the provision of goods and services of specific interest to students (books, gifts, records, unusual but inexpensive clothing, snack shops, bars, theaters) will certainly draw this population. With an average potential market of 11,047, most cities, particularly the 29% with colleges within one mile of their mall, should consider making an appeal to this market. While the student population does not guarantee increases in retail sales, there are certain businesses students can support. The student population can complement the downtown residential market in supporting a mall, and is likely to add support to evening activity on the mall.
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Role of Tourists: Tourists are a potential source of outside
dollars for a downtown mall. It has been documented (ULI) that visitors, such as conventioneers and sightseers spend more per visit, and buy higher priced items, than do regular customers. However, the survey results clearly show that a mall can not depend on tourist trade alone and will sink if the local market is not attracted to the mall.
The highest percentage of trade area sales attributed to tourists by the survey sample was 25%. The average percentage is 9%. The respondents reported a median 10% of patrons are tourists. There were no indications that tourist trade has been significant in mall success, and it was reported as a contributing factor to success in only a few cases.
Other studies have shown (ULI) that the largest cities, such as Boston, Baltimore and San Francisco can attract enough tourists to support a "festival center" mall such as Boston's Fanueil Hall, Baltimore's Harborplace and San Francisco's Ghiardelli Square. These centers rely on the tourist dollar for their livli-hood. Few other cities, however, can make this formula succeed.
Role of Downtown Residents; Theoretically, downtown residents should be a downtown mall's greatest source of patrons; however, the survey respondents consistently indicated that the character of their downtown residential populations is not conducive to mall success. Additionally, most of the downtown residential populations
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are not large enough to support their downtown malls. The lack of this important primary market is a major stumbling block for many downtown malls. While there is some evidence that downtown markets may be developing, downtown malls must focus on the secondary markets currently available to them. These secondary markets include commuting downtown workers, tourists and students.
Role of City Size; The survey reveals little correlation between city size and mall success, however, analysis of the Frequency Tables shows that the Success Group had a much smaller median city population than the total sample or the Failure Group. The Success Group cities also had a significantly greater rate of population growth between 1970 and 1980 than the total sample or the Failure Group.
It is believed that city size plays an important role in determining both the correct character and timing of a mall, and consequently its success. In a small city a downtown mall must be carefully timed and structured so as not to compete with or duplicate the services or atmosphere provided by any new outlying shopping centers; in general, the market in these areas is only large enough to support one or two centers. In larger cities, the downtown can compete more with suburban centers as long as a downtown market has been identified and addressed through mall design. In the largest cities, as discussed in the section on
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the Role of Tourists, downtown malls can sometimes afford to cater to sub-markets, such as tourists, if the sub-market is large enough to support the development.
Though the findings of this study's survey alone can not prove it, it is believed that success is highly correlated with city size. Cities of different sizes demand different types of malls. Analysis of the suitable mall types for different city sizes is beyond the scope of this study; however, it is apparent that a mall's success is partially dependent upon its ability to correctly respond to the size of the city in which it is located.
Role of Downtown Resident and Mall Patron Income: The survey results confirm the assumption that cities with higher-incOme residents and mall patrons are more likely to have successful downtown malls.
As discussed earlier, the percentage of mall patrons with incomes of less than $15,000 was the income grouping which was most highly correlated (inversely) with a mall's performance. The higher the percentage of mall patrons with incomes under $15,000, the less likely the mall is to succeed. The Success Group cities had lower percentages of mall patrons earning less than $15,000 and higher percentages of patrons earning between $15,000 and $45,000 or earning more than $45,000 than the total sample or the Failure Group malls. The same pattern holds true for the Success Group downtown residents. It is interesting to note that the Failure
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Group cities had no downtown residents who earned over $45,000.
The impact of resident and patron incomes on mall character and timing are obvious. Where downtown resident incomes are low, mall planners may wish to concentrate on a different market, such as downtown workers, or if other strong markets are not available, may wisely decide to delay mall construction until downtown housing opportunities expand to provide a more affluent close-in market.
Role of Downtown Resident and Mall Patron Ages: The survey findings suggest that cities with lower percentages of "youth" (less than 26 years old) in their populations have a higher degree of mall success. The successful cities also show slightly greater median percentages of residents in the 26-45; 45-65 and greater than 65 years of age categories. The distributions of patron ages for the total sample, the Success Group and the Failure Group show little variation between groups. With the exception that the Success Group malls seem to attract a slightly higher percentage of patrons 65+, the percentages in the other age categories are almost equal for the three sample groups.
The inverse relationship between the percentage of residents less than 26 years of age and mall success, coupled with the lack of respondent comments regarding the contributions of nearby college populations, may indicate that student populations are not beneficial to mall success. Other facts, as discussed under Role
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of College Student Populations show that student populations may add to a mall's success. It is the conclusion of this study that these populations can be beneficial to downtown malls but the mixed messages received from the survey results suggest that more study of the role of youth and student population^ in mall success is warranted.
The greater incidence of patrons 65+ among Success Group malls is also curious. The survey results show that these patrons do not have higher incomes than the 65+ patrons at the less successful malls. It appears that the Success Group malls are drawing these patrons from their downtown residential population and are achieving a higher degree of success than other malls because they have managed to incorporate their residential market into their larger mall market.
Mall planners must consider the ages of the downtown residents and other close-in potential markets in designing their malls. If the residential market is to be captured by the mall, the mall must appeal to the age groups present in the population.
The survey results suggest that where residential populations are predominantly young, the mall planners may be wise to pursue markets other than the residential market; however, the inverse relationship between youth populations and mall success may also be a result of cities failing to respond to the youth population.
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TABLE K.
HAVE THESE FACTORS HELPED OR HINDERED MALL SUCCESS?
TOTAL SAMPLE SUCCESS GROUP FAILURE GROUP
FACTOR HELPED HINDERED NOT KEY HELPED HINDERED NOT KEY HELPED HINDERED NOT KEY
Parking Availability 66% 23% 11% 36% 36% 27% 90% 10% 0
Public Transporation 51% 11% 37% 27% 27% 46% 50% 10% 40%
Mix of Stores 26% 46% 29% 46% 9% 46% 0 70% 30%
Downtown Tourist Trade 14% 20% 66% 27% 18% 55% 10% 20% 70%
Downtown Govt., Medical, Edu 54% 9% 37% 45% 45% 9% 50% 10% 40%
Market Study Prior to Mall 11% 17% 71% 18% 0 82% 0 40% 60%
Mall location 46% 11% 43% 46% 0 55% 60% 20% 20%
Trade Area Trends 11% 37% 51% 9% 9% 82% 0 40% 60%
Financing Method 20% 20% 60% 45% 9% 45% 0 30% 70%
Quality of Planning Agency 37% 11% 51% 64% 9% 27% 10% 20% 70%
Trade Area Economy 11% 23% 66% 9% 9% 82% 10% 40% 50%
Ability/Failure to Compete 11% 63% 26% 27% 18% 55% 0 80% 20%
Availability of Evening Ac 3% 77% 20% 9% 82% 9% 0 100% 0
Quantity/Quality of Nearby 20% 31% 49% 27% 18% 55% 20% 50% 30%
Citizen Input in Planning 20% 17% 63% 36% 9% 55% 0 20% 80%
Historic Bldgs. 34% 14% 51% 27% 27% 46% 40% 0 60%
Architectural Character of 14% 14% 71% 9% 9% 82% 10% 20% 70% *
Character/Size of Downtown 40% 26% 34% 55% 9% 36% 20% 50% 30%
Design Elements 51% 14% 34% 64% 0 36% 50% 20% 30%
Source: Survey Results
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TABLE L. TRADE AREA TRENDS
TOTAL SUCCESS FAILURE TOTAL SUCCESS FAILURE
SAMPLE GROUP GROUP SAMPLE GROUP GROUP
PRIOR PRIOR PRIOR SINCE SINCE SINCE
TRENDS CHART YES NO YES NO YES NO YES NO YES NO YES no
Adjacent cities have improved downtowns/malls Highway connection/bypass to 20% 80% 0 100% 20% 80% 72% 28% 78% 22% 75% 25%
adjacent cities Medical, Education, Govt, facilities 41% 59% 56% 44% 44% 56% 55% 45% 50% 50% 63% 38%
locating downtown 59% 41% 63% 37% 67% 33% 71% 29% 80% 20% 86% 14%
Stores moving out of downtown 67% 33% 78% 22% 60% 40% 76% 24% 70% 30% 67% 33%
Increased number of stores downtown New regional shopping center in 11% 89% 12% 87% 11% 89% 50% 50% 90% 10% 22% 78%
trade area 59% 41% 62% 37% 67% 33% 90% 10% 89% 11% 90% 10%
Source: Survey Results


V. CASE STUDIES: A CLOSER LOOK AT TWO COLORADO MALLS
BOULDER: SUCCESSFULLY CHANGING ITS RETAIL FUNCTION
The Boulder Downtown Mall is often touted as one of the successful downtown pedestrian malls in the United States. This well-publicized success is not totally explained by the traditional measures of sales tax and property tax revenue increases for the city and county; the mall's success rests largely on indirect and less quantifiable benefits.
History and Conditions Leading to the Development of the Mall.
The idea of creating a downtown pedestrian mall in Boulder began as it begins in most cities: in the early 60's the development of a large shopping center on the outskirts of Boulder (Crossroads) lured some of the bigger department stores from the traditional downtown retail district. Recognizing that this situation could lead to the deterioration of downtown, to urban sprawl and suburban retailing and the loss of property tax and sales tax revenues associated with these trends Boulder began talking about revitalizing its historic downtown.
Boulder had: some:.advantageous circumstances which distinguish it from many of the mall cities studied. Prior to the opening of Crossroads, Pearl St. had been the only retail center in Boulder.
In fact, its function as the retail center for Boulder dates back more than 100 years. The consistency of activity on this street
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over a period of time had established an easily identified, concentrated downtown core. In addition, the buildings along Pearl St. were predominantly built in the late 1800's and early 1900's; their architectural character provided a natural unifying theme for a pedestrian mall. There was little question about where the mall would be located and what its architectural character would be. Strong Retail Image. Perhaps most important was that Boulder's downtown retail district still had a strong image as the city's downtown when the concept of a mall was proposed. While many of the larger, especially regional or national chain stores abandoned Pearl St. for the Crossroads Mall, many of the smaller merchants remained on Pearl St. Several of these downtown merchants displayed a commitment to downtown retailing by building new buildings and renovating old ones along Pearl St. According to Art Everett of Everett/Zeigel Associates, it was this commitment which caused the downtown to show a "rebound"after Crossroad's construction and before a decision to build a mall had been made."^
Citizen Input. When Boulder did begin to plan for a pedestrian mall its approach was characteristic of Boulder's governmental philosophy Mall planning relied heavily on citizen input and on the advice of nationally recognized planning consultants. The city's willingness 11
11. Kuykendall, Carol. "Mall Project Logical Step for Downtown," Boulder Daily Camera, August 4, 1977. p. 44
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to take the time and spend the money necessary to involve the public and to get the best consultants prior to project implementation added greatly to the mall's chances for success. In response to the questionnaire sent to Boulder as a part of this study, the planning department respondent cited "citizen input during mall planning and construction" as one of three factors contributing most to the success of the mall.
It took at least a decade for the mall to grow from concept to reality. By the mid-sixties a citizen's group, known as the Committee for the Exploration of the Core Area Potential (CECAP) and later known simply as Boulder Tomorrow, formed to consider alternatives for the downtown area. In 1967, this group encouraged the city to hire consultant Victor Gruen to propose a plan for downtown Boulder. Gruen proposed a superblock plan composed of a series of malls, a conference-cultural center, ramps and bridges crossing Boulder Creek, and an artificial lake downtown. The next year, the city asked Gruen to scale down the plan. The final result was a plan for a nine-block superblock with one or two department stores and a possible civic center complex.
Mall Legislation, Parking and a City Vote. While Gruen's plan was
discussed in public hearings and city study sessions, other aspects of mall development moved forward. Boulder city officials played an active role in pushing for state legislation authorizing cities to close downtown streets and create pedestrian malls. The passage
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of this legislation (the Public Mall Act) in 1970 provided the city with the legal rationale to cut off private property owners' street access by creating a mall. Even with the legislation, the city faced a couple of lawsuits, but both cases were ruled in favor of the city. Also in 1970, a parking district with taxing authority was formed to improve parking in the downtown area. All property owners within the district were assessed to finance city lots for public and employee parking. A third event which shaped the outcome of the mall was a city-wide vote in 1970 which rejected a $7 million bond issue to finance a civic center. This vote, of course, eliminated the idea for including a civic center complex in the initial mall project.
Final Mall Plan. Gruen's plan never fully captured the community's support, and in 1974, the Downtown Businessmen's Association (which had formed to pick up where Boulder Tomorrow had left off) proposed their own mall plan. Their plan was orchestrated by Carl Worthington, a local architect and planner. The Boulder City Council approved the pedestrian mall plan and established a 180-day study period as required by the Colorado Mall Act. In January,
1975, the study period concluded and City Council passed an ordinance to close Pearl St. A mall assessment district was established and a zonal system for assessment was laid out so that those property owners benefiting most from the mall would pay a higher share of its costs. The assessment district would generate two-thirds
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($1.2 million) of the anticipated mall construction costs.
The remaining one-third ($650,000) would come from federal Community Development Block Grant funds.
During the study period, a Mall Design Team composed of local and outside planners and architects had been working on design alternatives for the mall. After passing the mall ordinance, the city council appointed a Mall Review Committee comprised of 16 people who represented the business community, merchants, the city administration and planning board, and citizens. The intention was for the Review Committee to work with the Design Team to create a mall plan which would meet everybody's objectives.
When construction began in June, 1976, there was a good consensus about the project's desirability. An example of the type of cooperation fostered by the coordination between the city, the Design Team and the Review Committee is the fact that construction was completely stopped during the Christmas shopping season so that businesses could guarantee their shoppers unhindered access to their stores.
MALL PERFORMANCE
Retail Sales. The Mall opened in August 1977 with a flurry of activity. Retail sales soared during this "honeymoon period" and the Mall was instantly declared a success. While pedestrian activity on the mall has remained high since 1977, retail sales tax statistics show a decline in the rate of retail sales increases
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since 1977 and a leveling off of retail activity on the mall in recent years (see Table M ). This pattern of a "boom" followed by relative decline and then stabilization is typical of downtown pedestrian malls nationwide.
Crossroads Mall. The recent expansion and renovation of the Crossroads Mall is expected to further affect retail activity on the Boulder Mall. The enclosed mall opened just before Christmas 1983 with 720,000 square feet of renovated shopping area. The Crossroads Mall now offers more atmosphere, entertainment and stimulation than it did previously, and it also has several large department stores as tenants. Some stores left the Boulder Downtown Mall for the new Crossroads, but the Downtown Mall still managed to show a modest increase in retail sales for January 1984 (as compared with January 1983).
Downtown Study. The city is not speculating about the extent of Crossroad's impact on the Downtown Mall but is focusing instead on an extensive downtown study to guide the future development of the downtown area. The objectives for this study seem to emphasize a slightly new role for the Downtown Mall than had originally been promoted. Pearl St. (the Downtown Mall) is now considered to be a secondary shopping area rather than the city's main retail district. A market survey of Boulder city and Boulder County residents showed clearly that residents do not shop the mall for major
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TABLE M. BOULDER RETAIL SALES
YEAR
MALL
PERCENT CHANGE__________
(PEARL ST.
ONLY) TOTAL CITY
1974- 75
1975- 76
1976- 77 Mall Opened
August 1977
1977- 78
1978- 79
1979- 80
1980- 81
1981- 82
1982- 83 (Oct, Nov, Dec Only)
1983- 84 (Jan '83 vs. '84).
+21% 7%
+19% . 13%
+40% 23%
+12% 14%
+ 5% 16%
N. A. N. A.
N. A. N. A.
0 + 5% (CAGID)
+14% + 8% (CAGID)
+ 5% -20% (CAGID)
*C. A. G. I. D. area is the Central Area General Improvement District; this district roughly corresponds with the downtown area.
Source: City of Boulder Sales Tax Department
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TABLE N. BOULDER ASSESSED VALUATIONS
YEAR
MALL IMPACT AREA
1
CAGID
2
TOTAL CITY
1978* 2 3 (Pre-Mall)
1982
1983
% Change 78-83
$3,32.9,450
$6,500,740
$6,979,060
102%
$ 8,422,380 N.A.
$20,785,110
147%
$284,771,280
$331,509,030
$411,777,440
40%
1
The Mall Impact Area includes the 900-1600 blocks of Pearl St., Walnut St., and Spruce St.
2
C.A.G.I.D. is the Central Area General Improvement District and corresponds roughly with what is considered "downtown" Boulder.
3
The 1978 assessed valuation figures reflect pre-mall values; 1982 values reflect a re-appraisal in 1979, using 1973 as a base year; and 1983 values use a 1977 base year.
Source: Compiled from Boulder County Assessor records, March, 1984.
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Boulder city planners now
12
purchases or daily necessities, believe that the Downtown Mall has a "different niche than Crossroads" and that the Downtown Mall does not, and should not strive
13
to compete with Crossroads.
Increased Property Values. The lack of significant retail growth on the mall does not indicate that the mall has failed Boulder.
The mall has stabilized downtown retailing and has contributed other benefits such as increased property values and new office building construction. Statistics compiled from the County Assessor's records show that the assessed valuation for downtown properties (Boulder Central General Improvement District) has increased 147% since mall construction. Properties most directly affected by the mall (Pearl St., Walnut St., and Spruce St., from the 900 block to the 1600 block) increased 102% in assessed valu-tion. These increases compare with a 40% increase for the city as a whole. (See Table N) .
New Construction. The city has approved approximately 300,000 square feet of additional office development for the downtown area. For the first time in the city's history, office space downtown has 12 13
12. Martin, John A., "Shopping Survey". City of Boulder Department of Community Planning and Development. 1984.
13. Susan Stolz, interview held at the Boulder Department of Community Planning and Development, Boulder, Colorado. March, 1984.
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become more dominant than retail space. While it is difficult to attribute new office development in the downtown directly to the presence of the Downtown Mall, it is clear that the Downtown Mall has mitigated the once imminent decline of downtovrn and has been instrumental in making downtown Boulder an attractive place for businesses to locate.
The New Market for the Downtown Mall. With the new domination of office buildings downtown, the Downtown Mall has gradually changed its focus from general retailing to serving the downtown office workers with restaurants and specialty shops. The market survey showed that the most frequently purchased items on the mall are records, books and gifts. Though Boulder has not conducted a "user survey" of the mall, it seems apparent to the casual observer that the Downtown Mall also attracts students from the University of Colorado which is within walking distance of the mall. The planning staff also speculates that tourists and visitors provide a healthy sub-market for the mall. The mall's retail function has shifted from general retailing to "entertaining shopping". Specialty stores offering unusual items are the name of the game on the mall today.
Continued Success. Boulder's continued success depends upon its
ability to maintain a unique image and a reputation for "entertaining shopping". While Crossroads Mall will undoubtedly continue to capture the great majority of Boulder's sales, the Downtown Mall
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has an important role to play in the future development of downtown. As a focal point and activity center for downtown, the Downtown Mall contributes greatly to the appeal of downtown.
In spite of its loss of significance as Boulder's primary retail district, the mall can continue to serve Boulder by attracting businesses and community facilities to the downtown area; these facilities, then, will generate additional customers to keep the mall's retailers alive.
DENVER: OVERCOMING DOWNTOWN WEAKNESSES.
The jury is still out on whether or not Denver's Sixteenth Street Mall is a success. Open for only one and one-half years, the mile-long mall is one of the most recently built malls in the United States. The Denver Partnership, the mall managers, report increased property tax revenues due to new construction as well as from the expansion and renovation of previously existing structures, increased hotel tax revenues and increased retail sales tax revenues. However, hard numbers on revenues from the mall impact area are not yet available for the mall's first full year of operation.
Even if exact sales and property tax data were available, it is probably too early to accurately evaluate the mall by those measures. "The Mall is not finished," according to Eileen Byrne at the Denver Partnership. While the public improvements are in place, the mall is still lacking completion of many privately owned spaces and is in need of more street activity on the mall,
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Byrne said. "The granite is in place, but people don't come downtown just to see granite," she said. Byrne expects completion of the private components within the next few years.-*-4 The initial impact of the mall will not be fully evaluated until 1987, after the mall has been open for five years.
HISTORY AND SOCIO-ECONOMIC CONDITIONS PRIOR TO MALL CONSTRUCTION Initial Mall Planning. The first Denver mall discussions began in 1971 between Downtown Denver, Inc. (DDI), the Regional Transportation District (RTD), and the City. RTD architect and former DDI president, Bill Chaffee, proposed the original mall plan.
There was a general consensus among all involved that Downtown Denver "needed something;"^ as with most central cities, the downtown was continuing a trend of retail decline which had begun in the 1960's and had not let up by the early 70's. While regional retail sales were expanding, the downtown continued to slip in its share of the market.
From the beginning of these discussions,it was agreed that the objectives for the downtown mall would be: to stabilize retailing, to create a better pedestrian environment and to improve 14 15 16
14. Eileen Byrne, The Denver Partnership, in a telephone interview, April, 1984.
15. Andrea Brett, Regional Transportation District, in a telephone interview, April, 1984
16. Gladstone Associates, Economic Impact and Implications of the Transitway/Mall, 1978.
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Denver's internal transportation system. Improved internal transit was as important a motivation for mall construction as was economic revitalization. It was easily determined that a combination transitway/pedestrian mall would be the appropriate tool to solve downtown Denver's problems.
By 1977, downtown sales gains were being reported by the downtown retail establishments. Downtown sales were averaging a healthy $100/square foot in the proposed Transitway/Mall area. The Central Business District had managed to retain five department stores: The Denver, May D&F, Neusteters, Joslin's and Penney's. It was determined that this was the time to build the mall. Gladstone Associates, economic consultants, were hired to prepare an economic impact study of the proposed mall.
Downtown Development Policies. At about the same time the econo-
mic impact study was being prepared, the Denver Planning Office and DDI prepared "The Downtown Denver Development Plan" to guide development in the downtown area. This Plan was followed with "Policies for Development of Downtown Denver and Adjacent Area" which was the work of the Planning Office, DDI and a Central Area Development Committee. Policies set forth by this document called for future development to build on the existing downtown activity areas; to contribute to the compactness, high density and walkability of the core area; and to add to a unified pattern of street activity through building design which creates pedestrian
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interest, e.g. usable open space and a variety of ground level shops. The document also pointed out that transit services must keep pace with the higher number of people attracted to the core area and suggested that downtown access be provided by an express bus service with transfer points at each end of the core area.
Other policies for downtown which would affect the mall included a statement that residential neighborhoods adjacent to the CBD should be expanded to meet a wider range of housing needs, and that the relationship between the Auraria campus and the CBD should be strengthened through improvement of pedestrian circulation. Downtown Denver's Assets. The Gladstone study analyzed the mall's potential from both a "bottom up" and a "top down" approach. The "bottom up" approach evaluates the market potential for a downtown mall; the "top down" approach involves evaluation by comparison with other downtown pedestrian and transitway mall cities. In its analysis of Denver's downtown strengths and weaknesses, the Gladstone study identified the following conditions as assets: a stabilization of downtown's share of the regional retail sales; a central location and strong multi-modal access including an internal circulation system (The Free-Ride), giving Denver a drawing power greater than any regional center in the metro area; occupied retail space (1.8 million) exceeding even the largest shopping center in the region; five in-place department stores; an extensive array of goods and services? Larimer Square; a sizable existing
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downtown worker population and growing numbers of new workers; planned construction of new hotels and residential apartments; and adjacent in-town residential areas.
Denver's downtown economy was evaluated as being relatively strong for a central city. The original conditions which made downtown attractive to businesses when it first developed (economies of scale and specialization; proximity and face to face contact; and access) still work in favor of the downtown and continue to support all types of activity with the exceptions of residences and certain wholesaling and distribution activities, according to the Gladstone study. The downtown also benefits from the presence of tourist attractions such as the U.S. Mint, the Denver Art Museum, the Colorado Heritage Center and Larimer Square. These attractions are credited with drawing hundreds of
thousands of visitors annually. In addition, Currigan Convention
17
Center draws about 100,000 conventioneers annually. Downtown
Denver also has the distinction of being the largest retail center
(concentration of retail space) between St. Louis and the West 18
Coast.
Downtown Population. The Gladstone study found a total 1978 downtown daytime population of 165,000 people including office workers 17 18
17. Gladstone Associates, Economic Impacts, 1978.
18. Eileen Byrne, The Denver Partnership, 1984.
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retail workers, hotel workers, hotel guests, residents, shoppers from the SMSA, and "out of town" visitors. The downtown residential population in 1977 was estimated at 2,310. The study concluded that the downtown residents did not have the purchasing power to sustain a large downtown shopping district, but that the 83,000 downtown office employees would provide the major market for the mall. A survey done as part of the Gladstone study found that Denver's downtown office workers provided a more sizable portion of sales than workers in the downtowns of many comparable cities.
The character of the downtown worker population was also viewed as beneficial due to the fact that 20% of the downtown employment is in finance, insurance and real estate. The study concludes that these types of employees spend more of their salaries on retail goods than persons employed in blue-collar jobs. Shoppers from outside the CBD were the second most important market for CBD merchants prior to construction of the mall. A survey of downtown merchants found that the merchants perceived that 70% of
their business has been from office workers while 30% has come from
. 19
shoppers from outside the CBD.
Office Development. Significant to the potential success of the mall was the downtown office development boom of the seventies, 19
19. Gladstone Associates, Economic Impact, 1978. p. B-14
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spurred largely by the demand created by the short-lived boom in the Rocky Mountain energy industry. The Gladstone study pointed out that over 3.2 million net square feet of office space had been added to downtown between 1970 and 1978 and that demand for the space had kept pace with construction. This growth was far greater than office growth during the seventies in comparable cities. Most of the new office development was occurring along the 17th Street corridor, adjacent to the proposed Transitway/Mall. The study also noted that CBD vacancy rates in 1976 were lower than vacancy rates for the entire metropolitan area (9.6% as opposed to 19%) In addition, proposed office building construction was projected to add 10,000 to 22,000 more employees downtown by 1981. Area-wide Trends. Area-wide trends were also identified as an advantage for the mall's success. Gains in purchasing power in the Denver region, and a slow-down in new regional shopping center construction at outlying locations were specifically identified as factors indicating that a downtown mall would be successful. The study also noted the Denver metro area's role as a supply and transportation center for the Rocky Mountain Region and its emerging function as a major center for federal government employment as well as the growth of the energy economy (1978) in the region as boons to Denver's downtown.
Downtown Denver's Weaknesses. Weaknesses identified by the study
were: retail "dead spots" along 16th Street; a dispersed retail
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district (long walking distances between activity centers); some vacancies creating a lack of cohesion; the unappealing physical appearance of the main retail street (public spaces, storefronts, signage); the aging physical conditions of most retail space and deferred maintenance of some structures; traffic congestion at certain hours; a shortage of cheap, convenient parking; the presence of vagrants and peddlers; and a lack of overall management to promote the area so that it can compete with outlying shopping centers.
The study determined that the strengths of downtown Denver outweighed the weaknesses and recommended that the mall project be pursued. The study projected retail sales increases of about 7.5 to 10 percent above the normal trends during the initial operations of the mall (1982 1987) Downtown employment growth to
105,000 by 1982 was predicted and was expected to create an increased captive market for mall businesses.
Mall Financing. As plans, policies and impacts were studied, financing for the mall was also being put in place. RTD managed to acquire the lion's share of the funding for the mall through the Urban Mass Transit Administration. In total, $64.9 million were
spent on the initial mall construction; 83% came from federal fund-
20
ing obtained by RTD, and 17% came from local tax revenues. The 20
20. Doug Goedert, Denver Planning Office in a telephone interview, March, 1984.
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mall was initiated with Federal Transportation Act Section 9 formula funds (RTD is entitled to $17,000,000 in these funds annually). An additional $21,000,000 came from the Federal Highway Administration which had originally allocated the funds for the construction of 1-470 but delivered them to RTD when 1-470 became C-470 and a state project. The remainder of the federal share came through Federal Transportation Act Section 3 discretionary funds. $200,000,000 was granted to RTD over a period of ten years (1976 1986). This grant was "sort of a consolation
prize" to RTD which had applied to the Department of Transportation
2l
for funds for a light rail study and had been turned down. With
the funding in place, 16th Street was closed in late 1979 for mall construction. The mall's grand opening was in the fall of 1982.
MALL DESIGN
The design of the mall was specifically orchestrated to overcome the weaknesses of the downtown retail district.
Shuttle System. The use of an internal transit system has been considered absolutely essential to improving internal traffic circulation and to eliminating the obstacles created by Denver's dispersed linear retail district. The shuttle system acts as a major transportation link connecting the new transfer stations 21
21. Andrea Brett, RTD, April, 1984.
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(built as part of the mall project) at the north and south ends
of the Central Business District. The shuttle, combined with a
restructuring of routes throughout the region to increase bus
service to the CBD, was designed to increase the capacity of the
downtown transit system and to attract an additional ridership of
22
311,000 annually by 1982. By providing free shuttle service to the peripheries of the CBD, the shuttle also decreases the downtown workers' demand for close-in parking spaces and frees these important parking areas for shoppers.
The shuttle eliminates the obstacles created by the dispersed retail district, particularly the long walking distances between activity centers, because it makes travel between two desired points on the mall very convenient. Gladstone Associates calculated travel time differences to different activity centers with and without the shuttle service and found that the shuttle service would shorten travel time up to 62%. By shortening travel times, the shuttle increases the market area for all of the downtown activity centers. While office workers previously patronized only
the businesses within two blocks of their offices, the shuttle makes
23
the whole CBD available to them for the same time expenditure. 22 23
22. Gladstone Associates, Economic Impact, 1978, p. 4-43.
23. Eileen Byrne, Denver Partnership, April, 1984.
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In addition the shuttle provides increased exposure for retail establishments on and adjacent to the mall by bringing commuters past the stores twice daily as they travel to and from their cars or the transfer stations; this is, in effect, free advertising for these businesses.
The shuttle addresses five of the originally identified weaknesses of the downtown: retail "dead spots" are easily bypassed by the shuttle; the dispersed retail district and the resulting long walking distances between activity centers are made inconsequential by the shuttle; the lack of cohesion created by some ground floor vacancies is mitigated by quick travel by these spaces; traffic congestion is lessened by taking commuters to the peripheries of the CBD at peak hours; and by the same token, the availability of long-term parking at the peripheries and the free shuttle service into the CBD for daily workers frees up close-in convenient parking for shoppers. All interviewed about the mall commented that the shuttle is a "big factor in the success of the mall."
Mall Management. Part and parcel of the design for the mall was the establishment of a management agency to promote and coordinate mall activities and maintenance. The Denver Partnership, a merging of Downtown Denver, Inc. and Denver Civic Ventures, was formed to act as the mall managers. The establishment of this agency addresses the previously existing weakness created by a lack of
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overall management to promote the area. Even with a management agency such as the Denver Partnership, the single-handed control over tenants which is possible in suburban malls due to ownership and management by the same entity can not be equaled on a downtown mall where private ownership of buildings makes coordination between building owners difficult. The mall management agency can, however, provide mall activities and promotions which help to unify as well as advertise the mall. The provision of activity on the mall, and the consequent attraction of shoppers and office workers ("eyes on the street"), helps to discourage the presence of vagrants which was also identified as a weakness of the downtown retail district. In addition, the Denver Partnership actively markets the mall to potential retailers, particularly those retailers who can add anchor and prestigious stores to the current mix.
Mall Appearance. Finally, the unappealing physical appearance of the main retail street is dramatically addressed by the physical design of the mall which provides for a new and uniform street and sidewalk surface, street furniture and landscaping which add continuity and a consistent appeal to all portions of the retail district. The aging physical condition of much of the retail space and the deferred maintenance on some structures has been addressed through guidelines for private renovation; however, as
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these structures are largely privately owned, it is beyond the bounds of the public plan to directly influence these changes.
It is safe to assume, however, that the beneficial retailing situation created by the public mall improvements will motivate private owners to renovate and maintain their mall, properties at some point during the initial phase of mall operations.
Mall planning carefully covered the weaknesses which had been identified prior to the final decision to create a mall. Theoretically then, construction and operation of the mall according to plan would result only in success. After one and one-half years of operation, the available indicators suggest that mall implementation has followed the original plan, and that the mall is well on its way to being declared a success.
MALL PERFORMANCE
As mentioned earlier, hard statistics on the mall's performance in terms of increased sales and property tax revenues have not been broken out yet for the mall impact area. There are other indicators, however, which demonstrate that the mall will contribute increased revenues in both these areas and others.
Retail Sales Gains. In informal surveys of mall merchants, retail sales gains of up to 30% since the mall opening have been reported.^ The Gladstone study suggests that other cities have experienced
24. Eileen Byrne, Denver Partnership
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have experienced first year gross sales increases of 5 to 10
percent above normal trends, and predicted "more than moderate"
gains (about 7.5% above normal trends) for Denver. In addition,
a Gladstone Associates 1982 survey of downtown business leaders,
conducted about six months after the mall opening,, shows that
77% of the 22 businesses interviewed felt the mall had had or
would have a positive impact on downtown business; only 9% felt
it had had or would have a negative impact, and 14% were "Not
25
Sure" what the impact had been or would be. The Denver Partnership is predicting that the mall will produce an initially dramatic increase in retail sales which will then stabilize.
This is in correspondence with the experiences of other mall cities. Increased Rents. A further indication that business is booming on the mall is the fact that rents for mall frontage stores have increased from a range of $4-$10/square foot to $20-$30/square foot (Byrne). One store recently changed tenants, and without any improvements to the structure, the owner raised the rent from $7/
2 7
square foot to $27/square foot.
Retail Space Changes. The Gladstone Associates study showed that the net leasable square feet of retail space in Denver decreased by 25 26 27
25. Gladstone Associates, Effects of the Transitway/Mall on the Downtown Economy: A Review, prepared for The Denver Partnership, May, 1982.
26. Eileen Byrne.
27. Eileen Byrne.
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84,250 square feet between 1977 and 1982. The Denver Planning Office, however, explains that these losses are largely due to demolition. Much of this space has not been replaced, but it is expected that new retail space offered in new locations along the mall will make up the difference. The retail space along the mall is simply being redistributed. The Denver, for instance, removed 100,000 square feet of retail space, but the Tabor Center is adding 280,000 square feet of new retail space.
Property Tax Revenues Due to New Construction. The prevalence of construction in the mall area indicates that property tax revenues for the city will certainly be increasing as these buildings become completed. These increased revenues can not, however, be directly attributed to the presence of the mall because most of the projects were proposed and approved prior to the mall's construction. Recent reports claim a current office vacancy rate of 28.5 percent, the highest of seventy-five major metropolitan cities. This office space glut is attributed to the fact that the projects recently being completed were proposed, approved, and even started during the energy boom late in the seventies.
The demand for office space dropped dramatically as the energy boom lost its momentum. (Denver Post article) Additional new construction in Denver will not occur until the current projects are full. Thus, any impact of the mall on stimulating new construction will not be felt for many years.
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It is clear, though, that the presence of the mall has changed the character of several of these developments. For instance, the Republic Plaza project at the south end of the mall was originally approved as an office tower, but since construction of the mall, has changed its plan to include about
100,000 square feet of ground level retail space. A new Peck & Peck store has already moved into the space. The Hudson-Bay Center at 16th and Stout opened shortly after the mall and also added ground floor retail to its plan at the last minute. And the Reliance Center, originally planned as an office building project for the block between Welton and Glenarm, is currently designing a new project which will include retail space. These changes, prompted by the construction of the mall, will result in higher total revenues for the city from these constructions and will contribute to the objectives of the mall.
Property Tax Revenues Due to Renovations. Additionally, several previously existing buildings, such as the Security Life Building and the University Building have renovated their retail space. The University Building is also expanding its retail space. Prior to mall construction, Woolworth's was considering reducing their retail space, but due to increased business since the mall opened, Woolworth's has abandoned those plans.^ Other renovation projects
28. Eileen Byrne.
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along the mall include private investments in historic properties. All of these improvements on the mall will eventually contribute to the city's coffers.
The Tabor Center. The Tabor Center, currently under construction between Arapahoe and Larimer Streets, will add an additional 280,000 square feet of retail space as well as a Westin Hotel, offices and residences to the mall area. It is expected to add a whole new dimension to the mall as it will be a first-class development with obvious influences from the "festival center" movement in its design. As is the pattern in festival centers, Tabor Center will offer a larger percentage of restaurants and start-up businesses than a traditional mall would. No anchor stores are anticipated at the Tabor Center but some chain stores and prestigious outlets, such as Brooks Brothers, are expected to locate there, creating a new draw for the downtown. The 16th Street Mall has been instrumental in making the Tabor Center the quality development it is expected to be, according to the Denver Partnership. The Rouse Company is developing the retail portion of the Tabor Center project, and, the Partnership reports, Rouse's decision to develop retail space in downtown Denver was "strongly influenced by the mall." Rouse had looked at retail development opportunities in the Denver area before but always turned them down prior to the construction of the mall, Byrne said.
29. Eileen Byrne
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