Melancholy Mall

Shopping center slowdown

Suburban shopping malls long ago replaced Main Street as America's marketplace and Saturday hangout. Their covered walkways and shiny stores have provided both merchants and shoppers with what seemed an ideal environment. For more than 30 years they popped up along highways and in cornfields almost as fast as developers could build them.

No longer. This year, only about nine major regional centers are expected to open, compared with more than 20 in 1978. Says Albert Sussman, executive vice president of the International Council of Shopping Centers: "There has been a real slowdown. We have been running out of markets for development of new centers."

Mall builders recite a litany of woes. Choice locations are now hard to find, construction costs are rising rapidly, and fluctuating interest rates make financing both expensive and difficult to obtain. Because of local opposition, zoning regulations and environmental restrictions, the development of a new suburban mall now can take up to ten years, twice as long as in the 1960s. Says Mathias DeVito, president of the Rouse Co., one of the country's largest developers: "I doubt we will ever again see the kind of shopping center development that we saw after World War II."

The decline has been sharpest in the Northeast and Midwest. Says Thomas Klutznick, son of Commerce Secretary Philip Klutznick and head of a development subsidiary of the Aetna Life & Casualty insurance company: "In the Chicago area, growth is static. The demand for shopping centers has tapered off." Many regions have simply become saturated with shopping malls. And because of higher gasoline prices, people now plan buying expeditions more carefully. Thus they make fewer shopping trips, especially to outlying malls.

The decline in suburban developments, however, has been paralleled by a growth in downtown shopping centers, which often include restaurants and theaters as well as department stores. Boston's Faneuil Hall Marketplace has be come a premier tourist attraction, and Baltimore's Harborplace had an estimated 10 million visitors during the first five weeks it was open. In Asheville, N.C., 100 old buildings in the downtown area will be demolished to make room for a new enclosed shopping mall.

Unlike some of their suburban counterparts, urban malls are often welcomed by public officials. In some cities, the centers can be built on cheap, underused land and will revitalize moribund downtown areas. Such services as sewer and water are already in place, and federal money is available for development. Boston last week won a $19 million urban-development package to help build the $373 million Copley Place. This new city mall will include two hotels, apartments, office space, specialty shops and ethnic restaurants in addition to the predictable shoe stores and record outlets.

For Americans who think they will never see anything as lovely as a suburban shopping center, there is still California. Gigantic malls continue to go up there as fast as retailers can say, "Stop and shop." Many of the centers are miniature cities, complete with libraries, museums and day care centers. For now, West Coast entrepreneurs hope that they can keep developing in the suburbs, while mall builders in many other parts of the country must focus more on downtown.

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