The Economics and Nostalgia of Dead Malls | Hacker News Reader

The Economics and Nostalgia of Dead Malls

nytimes.com

57 pointssytelus47 comments

I love how Rackspace took over an abandoned mall for office space. I think it'd be great to see that happen more often.

Food court, lots of parking, usually good locations, many different size parcels from huge (think a Sears) to small (RadioShack) that would be suitable for businesses of many sized.

Imagine working in an open office space the size of a Sears floor. That's what I see every time one of my Racker friends posts up a picture of their workspace. Ugh.

Take it from someone that used to work there -- it's horrific. The noise level is unbelievable. All the technical folks live in their noise-canceling headphones all day.

I'm surprised they didn't do anything for the noise. I have seen some really interesting noise cancelling ceiling treatments if the ceilings are high. One looks a bit like a kelp forest hanging from the ceiling only denser. The "leaves" on the vertical vines form a noise capturing space so absolutely nothing bounces off the ceiling.

They tried various things like big fabric panels designed to absorb sound hanging from the ceiling, special wall treatments, and moving desks around and such around.

It's just a big space with thousands of people, many of them on the phone all day.

Interesting, did they keep data on what they tried do you know?

I don't know. I hope they do since they're always trying to improve the noise situation.

Exactly, the false ceiling is designed to absorb sound. If you remove that the space is nothing but a concrete echo chamber.

10 years at INLD / PEER1. The shopping mall was the final nail in the coffin of the idea that I might ever move to SAT and jump ship to Rackspace.

You need ceiling tiles and/or carpets that absorb sound instead of reflecting it. I was involved in a couple of office moves with Meraki when they still hadn't found an office large enough for more than a year of growth. The moves were so rushed that the noise-dampening add-ons hadn't been installed, and the noise was horrendous; and then when they finally were installed, you could notice the difference very well.

How is living in San Antonio? I had a recruiter from Rackspace contact me and that seemed like a big negative.

I was actually in the Austin office most of the time but spent a lot of time at "The Castle" (as they call the SA headquarters).

Texas is a bit different and SA is that plus more. It's hot. ;)

Austin is great, though, and I still live here (albeit about 30 miles NW out in the country).

I'm actually from around Austin. It is a great city.

You can take a look around inside on Google Maps.

https://goo.gl/maps/VTkMW8dmL1t

It looks like someone just put tables in there. They didn't hire an interior designer?

There are people who would have you believe this is a good thing. I share your revulsion.

I spent a couple of days working in the Rackspace "castle". It felt much the same as the average Silicon Valley office building (which are typically constructed with big open floors populated by cubes). Except it has a slide and a food court..

Nothing says walls can't be built inside the stores

I would also have a problem with the lack of natural light.

A friend's employer did this, along with some other companies, with a dead mall in whatever city he was in at the time. They got the food court reopened, and, yeah, parking was a breeze.

Perhaps not the most efficiently designed space for the purpose, but effective. The high ceilings, often skylights/atrium in the main corridors, could be nice walking space when you need a break, and not constrained by bad weather.

So cool!

Here's an indoor view, thanks to Google Maps:

https://www.google.com.br/maps/place/Rackspace+Hosting/@29.5...

And lots of space for roller skating

Our mall is cockroach ridden and dying. If I had my way, I'd close all the existing stores in it (JC Penny's and a shoe store). They would relocate to downtown Palatka. The mall itself would be full handed over to Government offices.

Presently there are a few government or government related presences in the mall.

Palatka FL? I lived in Pamona Park for a few months, that mall was sad indeed.

There was a mall in Dallas, TX called Prestonwood. After the mall went under, it was taken over and turned into a telecom office complex called Genisus [sic]. Ultimately, it failed, and the whole thing ended up getting bulldozed and turned into an outdoor strip mall anchored by a Walmart.

Oh sure. Middle of nowhere. No public transport. Sounds like a dream.

I won't miss them.

I just spent a few days in Seattle's downtown, pieces of which have a very outdoor mall feeling to it. Ridiculous amounts of shopping clustered very close together. Felt like way more fun than any enclosed mall.

Maybe part of it is perceived efficiency on my part (the window shopper) - I felt like I can find more variety and competition in several square blocks than in a typical mall.

Outdoor malls are nice in Seattle, where it constantly rains and nobody cares because it constantly rains but you never get ice storms or mosquito-filled summers with 110% humidity and 110°F. Transpose your idea to Missoula or Dallas or Phoenix and it loses some luster.

On the same token, when I visited Orange County several years ago I remember both enclosed, air-conditioned malls, and open-air malls.

Seattle has a couple of enclosed enclosed urban malls downtown right next to each other (west lake and pacific).

I feel like China is making all the mistakes of the states in their mall development. We have more than a few near our apartment and they are mostly uninspired.

The malls were never a solution for city downtowns. They were a solution for suburbia, where you could zone a commercial area outside a residential area. On the sell side, they were a solution to brands with low urgency (greeting cards, pretzels) to benefit from foot traffic to headliner stores.

"With income inequality continuing to widen, high-end malls are thriving, even as stolid retail chains like Sears, Kmart and J. C. Penney falter, taking the middle- and working-class malls they anchored with them."

This has become a standard refuge of the press whenever businesses that target middle-income customers decline. Must be income inequality. Never occurs to them that maybe the failing retailers aren't delivering the value that their customers expect. Malls are a pain. Drive to it, park far away, walk all over the place, try to find sales help, stores are overpriced, have limited selection, and the hours are limited.

Think of many of the products that used to be sold in malls: appliances. Electronics. Fast food. Apparel. Many of these have other retail options available that are less of a pain than the mall. Heck, Walmart is less of a pain than the mall--and it has better hours. The mall closes at 6 or 7 on Sunday and doesn't open until 10.

So no, "income inequality" has little to do with the decline of an expensive, inconvenient retail format.

>Never occurs to them that maybe the failing retailers aren't delivering the value that their customers expect.

Could they not be expecting more value because their wages have stagnated? Wouldn't income inequality be the reason that the customers require the "value" to start with? Seeing as the affluent are willing to pay shopping mall mark-up and the middle class isn't, doesn't that point to income inequality?

I'm just not sure why you view these explanations as mutually exclusive. The middle class brands are dying because the middle class can't afford them anymore. The wealthy would never have set foot in there to start.

In an America where the middle class have supercomputers in their pockets, unlimited long-distance calling, cars with ten airbags, over a hundred channels of television, 3D movies, abundant food, air conditioning in their homes, and multi-gigabit broadband, I have grown increasingly skeptical that the "stagnant incomes" narrative is accurate.

>I have grown increasingly skeptical that the "stagnant incomes" narrative is accurate.

This is a puzzling politicization of a topic that is basically uncontroversial among economists. In fact, the only thing the experts can't agree on is what's causing it[0].

Your analysis of the situation -- "Americans have too many toys to be considered poor" -- is staggeringly short-sighted. Rising cost of housing and medical care in the face of stagnating wages is a legitimate concern on many levels and informs the way our government crafts financial policy. It has huge implications across multiple sectors, including and especially the vaunted "tech sector."

What happens when no one can afford to save for college and they incur massive debts? What effect does that have on the housing market, typically considered the bellweather of economic health?

What happens when a generation (or more) never gets around to saving for retirement?

What happens when a generation can't afford healthcare, even when its subsidized by the government?

Income inequality is an important conversation to have; I urge you to not be blinded by superficial indicators of wealth. Mainly for your own sake - your retirement account is probably dependent on some crucial policy decisions being made based on this discussion.

[0]http://www.pewresearch.org/fact-tank/2014/10/09/for-most-wor...

All that economists agree on is that the number of pieces of paper in an average American wallet has stayed the same. The problem is that pieces of paper in a wallet are not intrinsically useful. They're only useful because they buy things. Since economists aren't asking what these pieces of paper buy, they're not asking the right questions. It is, of course, much easier to focus on dollars in the wallet, because that's easy to measure. Well-being is much harder to measure, and economists aren't doing much to answer that.

"save for college" - few Americans have ever been so privileged to save for college, yet this has not stopped the ever-increasing average educational attainment for Americans.

"save for retirement" - also a privilege few ever had, which is why we have Social Security. And I'm not going to cry much over the fate of retirees as they enjoy their Medicare Part D benefits, allowing them to take drugs that did not exist years ago.

As for income inequality, I have never regarded this as an important conversation to have. Able has $100. Baker has $10. If inequality is the problem, then a good solution is to make Able have $50 and Baker have $9. I disagree that such an outcome would solve anything. It's a problem if Baker can't get ahead. It's a problem if the system is rigged in Able's favor. The mere fact that Able has $100 and Baker has $10 is not a problem. As someone who is far from the 1% I can say that I will be no better off if the rich have less and I have no more. Yet such an outcome would reduce inequality.

>few Americans have ever been so privileged to save for college, yet this has not stopped the ever-increasing average educational attainment for Americans.

Americans didn't have to. They could pay for it with a part time job. But the cost of college has risen far faster than wages, helped by cheap student loans from the government.

>Which is why we have Social Security

Social Security will need to be vastly expanded to keep up with an aging population. With a new generation having no pensions, retirement savings or property (student loans in lieu or mortgage), the next "middle class" doesn't look like much different than the working poor of today. The cost of living is not going down.

The concern with income inequality is not that the rich are getting richer, it's that the middle class is getting poorer. And this has a ripple effect both inside the economy and into other areas: the justice system, politics, public safety.

Lots of people can afford to ignore it now. It doesn't look like that is going to last, however.

> They could pay for it with a part time job.

Still can. I graduated within the last 5 years. My sister and I both waited tables throughout college and got out of undergrad (and for her, also a two year grad program) without debt.

I lived solo, bought a car, and went to state school in that time. I came out with enough of a savings buffer for a ~1 year job search.

State school, ~20-30 hours a week waiting tables (worked summers at a summer camp for less money than waiting).

What you can't do is pay sticker price at a private university, but that's a red herring because almost no one pays sticker.

The average debt of a student coming out of undergrad in the US is <$30K[0], and the median income is $45K[1].

Please, have your way with my anecdata, but I'd be much more interested in the argument that a $30K debt load for someone earning $45K is crippling.

[0] http://www.usnews.com/education/best-colleges/the-short-list... (average is in the sub-headline)

[1] http://time.com/money/3829776/heres-what-the-average-grad-ma...

"It wasn't a problem for me, so it's not a problem for anyone." Your scope is too narrow. You're leaving out what else that $30k could have gone to - a down payment on a house, for one.

You're also refusing to consider the effect this kind of arrangement has on the future economy. With an upper class that seems averse to taxation, whose going to pay the social security for the generation with no assets?

The equation is so much more complex than "just go to state school." You ignore that complexity and choose smug criticism.

Student loan debt surpassed credit card debt and defaults got so bad (almost 14%) the Obama administration had to step in and change the program. The genie is out of the bottle and what students "should have done" (feasible or not) is irrelevant.

> Please, have your way with my anecdata, but I'd be much more interested in the argument that a $30K debt load for someone earning $45K is crippling.

I was not offering a solution or even saying there are no problems.

I was addressing a bold claim that Americans could once afford college by working part time, with the strong implication that this cannot be done anymore.

I am not refusing to consider anything, and my scope was clearly defined by the claim that I quoted and to which I offered a refutation.

Moving the conversation broader, you raise several issues. These are not relevant to the claim made and addressed.

You have inferred that my post is smug criticism of real issues that exist (some of which you have touched on). That was not my intention, and I promise I did not feel smug in responding.

The only point you've raised that addresses my post around student debt is that the average $27K of debt that students graduate with could have gone to a down payment on a house. Ignoring the fact that real estate for residence is historically a terrible investment, how would $27K of debt somehow convert to a down payment? A down payment comes out of savings. The fact that a graduating student has debt implies they didn't have the cash to put toward a down payment. With the return to college still being large and positive, I would argue that this debt is typically well worth it.

I used to believe that overall standard of living had increased, the realization of technological advance. We have better toys and probably better food now than in my childhood.

Adding to my confusion was my experience in Silicon Valley, or that of my extended family in the South; while my increased earning power was overwhelmed by an increase in housing costs, my extended family could live in brand-new homes, an ever-expanding suburbia.

It's very strange there.

I agree with the over-retailed aspect. Actual retail could mix very effectively as a lining along pedestrian paths, with domiciles above for a few tens of stories.

This would pretty much also kill the concept of malls as it would be a return to the shopping arcade; in fact I'd prefer it if combustion motors were banned along the arcade and it were actually properly enclosed.

If the arcade is enclosed and cars are banned, that's a shopping mall. That's what that is called.

You might have housing in there, but it would be living in a shopping mall. Something which somehow hasn't taken off.

There are cases where housing is attached to malls. There some at Copley in Boston and Santana Row in Santa Clara, while not an enclosed mall, is a mix of retail, restaurants, hotels, and condos.

> About 80 percent of the country’s 1,200 malls are considered healthy, reporting vacancy rates of 10 percent or less. But that compares with 94 percent in 2006, according to CoStar Group, a leading provider of data for the real estate industry.

And how many of the malls that were open in 2006 are still open? Seems like percentages are the completely wrong number to use. Also I found that graph made very little sense.

In my home town of Lynchburg VA the indoor mall just outside of town was on the decline so the nearby Liberty University nearby bought most (if not all) of it and turned it towards classrooms, and other university purposes. There is still a large movie theater and besides not agreeing with many of their principals it's nice to see something not go to waste.

I'd say this is a good thing for the future small to medium sized businesses, assuming the mall management and owners drop rental and kickback prices that were gouging bigger retailers. Online shopping is the future and the malls will need to adapt or die.

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