Threshold Resistance (4 page)

Offering two hundred shops and three or more department stores would create the critical mass to establish Sunvalley as the dominant shopping destination for this growing market. I was planning the equivalent mall shop space of two department stores (approximately 400,000 square feet), offering the same categories of goods along with around 50,000 square feet of food and services. The specialty shops would compete head-to-head with the department stores. Customers would respond to the convenience of a one-stop comparison shopping opportunity, and the area would not be splintered by multiple smaller, poorly planned retail properties. At least that was my theory.

Thank goodness Jim was convinced. And in the end, a compelling opportunity overcame entrenched threshold resistance to a new way of thinking. Jim made his positive recommendation to Macy's corporate decision makers, and Sunvalley—with a beautiful 200,000-square-foot Macy's exceeding all sales expectations—debuted in 1967 as “the world's largest air-conditioned shopping center.”

Although he didn't say anything at the time, I think as we cut the ribbon at Sunvalley's grand opening Jim must have been thinking: “This better work, kid. It's
my
ass if it doesn't.” Soon after, Macy's hired Jim and made him the head of its real estate department, where he enjoyed a very successful career as one of the industry's most respected executives.

The greater Bay Area turned out to be very fertile ground for the Taubman Company. In rapid succession, we built three centers there in the 1960s. The third, Eastridge, was built near San Jose, which between 1960 and 1967 saw its population soar by nearly 50 percent, making it the second-fastest-growing large metropolitan area in the country. Built on the former Hillview Golf Course, Eastridge was a 1.5-million-square-foot center with 150 stores, anchored by a large Sears, JCPenney, and May.

We took the lessons we were learning in California and applied them closer to home. In effect, we realized that by building large centers, we were essentially creating new commercial downtowns under a single roof. In 1968, we opened the Woodland Mall in Grand Rapids, Michigan. In its first full year in operation, the seventy-store mall captured 25 percent of total general merchandise sales in the Grand Rapids market.

Reimagining the size of the prospective customer base, the scale of malls, and the footprints they could occupy was an important first step in building successful, lasting retail operations. It took a lot of self-confidence and a willingness to peer deep into the future to envision the viability of our projects. To a large degree, the centers we built in the 1960s and early 1970s were bets on the construction of new highways and subdivisions. Using rental cars and gas station maps, I got very good at explaining the impact of future highways on retail locations. One adventure I remember all too well took place in the suburbs of Chicago when we were planning the development of the Woodfield mall in Schaumburg, Illinois. We were planning to
spend $90 million to build a 2 million-square-foot mall in a community whose population numbered about 18,000, which required a huge leap of faith by all parties involved.

Taking a break from an industry conference in Chicago, I convinced a car full of bankers from the Chase Manhattan Bank (they had already lent us the money to buy the land) to join me for a quick drive out to the site, about twenty miles northwest of the Loop. Construction was just getting under way on the extension of Interstate 90 west of O'Hare Airport, and Woodfield was to be built on farmland right off a future exit.

I headed past the airport along small country roads, and we passed farm after farm. One looked just like the other. Hopelessly lost, I sped past a farm I thought I recognized. Waving my arm out the car window, I confidently exclaimed, “That's it!” I think the bankers knew I had no idea where we were. But they couldn't miss the signs of growth all around us. And lost or not, it was easy to grasp how Interstate 90 would dramatically shrink drive times for the families moving out to Chicago's booming northwest suburbs. An outstanding retail market was forming right before our eyes. When Woodfield opened in 1971, it was the largest enclosed mall in the country.

But situating the center in the big, macroeconomic picture was only the first step. Our centers stood out because of what happened inside their walls and in their immediate surroundings. From the outset, I believed that building shopping centers wasn't a real estate or a development business; it was a retail business. Shopping centers were department stores of stores, and we were the merchandisers. Understanding the psychology and history of retail, and understanding how properly designed stores can break down threshold resistance, gave us a competitive advantage. The real innovation we brought was the
design
of the malls.

I
t's common for people to view the types of malls I started building in the 1960s—gigantic, air-conditioned, enclosed environments—as twentieth-century American inventions. But malls are neither contemporary nor American. And while it may have seemed that I was embarking on a risky gamble, I was in fact walking in the footsteps of generations of retail pioneers.

Now, that might sound strange coming from me. Along with Victor Gruen, the Viennese architect who designed much-studied retail projects in Detroit and Minneapolis in the 1950s, I am often listed among the early creators of this “new” retail archetype. As Malcolm Gladwell, author of
The Tipping Point,
wrote in the
New Yorker,
“If Victor Gruen invented the mall, Alfred Taubman perfected it.”

High praise from one of the most successful business writers of our time. But I'm going to have to decline it. Unlike Gruen, a colorful man who embraced this questionable honor with gusto, I have never been comfortable with the accolades and blame that come with being known as one of the guys who “malled” America.

Truth is, major enclosed marketplaces with the depth of merchandise selection to pull customers from considerable distances—otherwise known as malls—have been around for centuries.

I keep in my office a beautiful book of architectural drawings,
Monuments modernes de la Perse,
published by Pascal Coste, a French architect who studied the cities of Persia in the 1800s. It contains an illustration of a fabric bazaar in Isfahan. The shops, in this case selling spaces leased to fabric merchants, are arranged around a dramatic domed grand court with a fountain at its center. Merchandised corridors branch out from the grand court. Daylight streams in through the skylights above. Sketch in a Starbucks and you'd think you were looking at Woodfield mall.

Or consider this account written by a European traveler in 1784 describing the bazaars of Istanbul:

This building type was refined in Europe, beginning almost immediately after the French Revolution, as democratic upheaval helped spawn a middle class in France eager to take on the material trappings of the upper crust. Fine apparel, home furnishings, great food, and festive entertainment were available in the arcades, of which the Galeries de Bois of the Palais Royal was perhaps the finest early example:

That sounds a lot like one of the Taubman Company's early leasing brochures. (By the way, experience has taught me that the quality of a real estate development is usually in inverse relation to the cost and hyperbole of its brochure!) And if your travels ever take you to Milan, make a point of visiting Galleria Vittorio Emanuele II, the quintessential mall. Opened in the 1800s, this Italian masterpiece incorporates most of the essential elements of great shopping center design on a grand scale. The mall corridors, which intersect at a domed grand court, serve as busy pedestrian passageways connecting two busy public activity centers—piazzas. The center is adjacent to the city's most active commercial and residential districts, and is anchored by a cathedral. Back when Italians attended mass far more regularly than they do today, the church acted as a “people pump” as potent as any major department store or rail station.

Explore the streets of London today, and you'll discover such thriving destinations as the Burlington Arcade, still delighting customers after more than two centuries in business. It was in fact an Englishman who brought the arcade to America. John Haviland, a British architect, designed the Philadelphia Arcade, which debuted in 1826. Additional multilevel, enclosed Haviland projects soon followed in Providence, New York, and Cleveland. Haviland died long before the introduction of Cinnabon or Victoria's Secret, but he—far more than me or Victor Gruen—really deserves the credit and the sneers for malling our great nation.

In fact, the earliest department stores were born as arcades. As individual retail tenants ran into financial difficulty, the landlord would take over the space to make sure all merchandise categories were represented sufficiently in his arcade. Over time, enough of the shops, or departments, came under the control of a single owner to
merit a single name or brand for the property. Historic department stores in Europe evolved in this way, offering customers the resulting advantages of consistent return policies, predictable hours of operation, and storewide promotions.

Between the Civil War and the turn of the century, pioneering retailers in the United States like John Wanamaker in Philadelphia and Marshall Field in Chicago took advantage of the availability of machine-made goods and the dramatic growth of our cities to introduce their popular shopping emporiums. Isaac Merrit Singer's sewing machine had made it possible to mass-produce garments and shoes with a consistency (and accuracy) of size and quality never before possible. In turn, the American department store offered customers some revolutionary innovations. Because there were no longer wide variations of color, quality, and fit inherent in unique hand-made goods, items could be offered to everyone at the same price. John Wanamaker called it his “one price for all” policy. Gone were the days of bartering and haggling between buyer and seller. Money-back guarantees were honored for the first time.

Let's not forget threshold resistance. Imagine how much more confidence a shopper would have in a store that posted the same prices for all customers and was willing to take a purchase back if everything was not just right. How comforting to know that a single known and respected proprietor stood behind every sale, and that if some kid sold you the wrong size pair of shoes, the store would give you another at no charge. Finally, consider today's department stores, with their in-house boutiques and carefully delineated sectors. What are they if not vertical arcades?

So in building new centers, I was standing on the shoulders of giants. Developers and merchants for centuries had been breaking down the barriers of threshold resistance. My experiences at Sims and in Ann Arbor were helpful, but I was convinced John Wanamaker had a few things to teach me as well. We wanted to build upon
the history of the arcade and tap into our nation's economic and social momentum to create the most successful retail destinations ever developed.

To find the answers, I looked to America's downtowns. What were they doing right? What were they doing wrong? And how could we create the optimal retailing environment?

I
n the early 1960s, just as the first Taubman regional centers were coming on line in California, I spent some time with James Rouse at an industry conference. A mortgage broker turned urban planner, Rouse studied man's built environment and worked throughout his distinguished career to improve the quality and sensitivity of land-use decisions across the nation. While he was generally complimentary, Jim was uncertain about some of my merchandising theories. He was concerned that people would find my environments more controlling and manipulative than traditional downtown shopping districts. “You know, Al,” he said, “you really can't force people to do things they don't want to do.”

I certainly wasn't going to dismiss the opinion of James Rouse, who had developed thriving communities from a blank sheet of paper. But I didn't think that we were that far apart in our thinking. “Jim,” I said, “many inner cities are failing, especially as retail destinations. I want to duplicate the best aspects of the downtown shopping experience and eliminate the disadvantages that are holding our cities back. Ultimately, the shopper will have more freedom to do whatever she wants in my space. That's the beauty of being able to start from scratch. By reducing the amount of threshold resistance
inherent in the physical layout of traditional retail districts and focusing more on the merchandising of the space, I think both the shopper and the retailer can win. And I'm sure the landlord will be better off.”

I'm not so sure I made a sale that day with James Rouse. But just consider your own experiences, and I think you'll understand my point of view.

Let's start with a typical street grid in a typical downtown. Let's say Main Street is the primary east-west commercial artery. Intersecting Main are north-south cross streets we'll name First, Second, Third, and Fourth. The distance between each cross-street along Main is about 330 feet, a typical city block. The town's most popular department store stands on the northwest corner of Main and Second. Two blocks east, at the southeast corner of Main and Fourth, is a multilevel parking deck, the primary parking spot for downtown shoppers.

Because so many shoppers park their cars at Main and Fourth, walk to the department store at Main and Second, and return to their cars, the street-front shops along Main between these two destinations are situated in what we call “100 percent” locations. They can count on the highest level of pedestrian traffic passing by their front doors day after day, and benefit the most from impulse buying. Consequently, the landlords of these buildings can command the highest retail rents. By the way, studies as far back as those conducted by Leonardo da Vinci tell us that a person feels comfortable walking only about three blocks, or 1,000 feet, from his or her home for discretionary trips. Beyond that, one senses a need to return home. That's why walkable, high-volume districts within cities are typically three blocks long.

Because of the considerable rent premium paid for direct access to pedestrian traffic, a healthy downtown typically will not feature restaurants, banks, travel agencies, and other services along Main.
These uses are less dependent upon walk-in traffic and impulse purchases, so they will be located on the cross-streets, midblock off Main. (Walk up Madison Avenue in midtown New York, one of the world's great retailing strips, and count the restaurants. You won't find many.) In struggling downtowns, as opposed to healthy ones, you tend to see those secondary uses, especially banks, occupying prime locations better suited for retail.

Now, here's where opportunities for improvement come in. In our pretend city I purposely placed the department store and parking deck on opposite sides of Main Street. In this very typical situation, a pedestrian will have to cross Main at some point between Fourth and Second on her way to the department store and back to her car. (I should point out that women are the majority of mall shoppers, and the biggest buyers of men's clothing. So when I use the word
her
or the pronoun
she,
I'm just reflecting the reality of our customer mix.)

Because of the need to cross streets, the shops on the north and south sides of Main may not get an equal shot at our customer. The busy vehicular traffic along Main stands in the way of “cross-shopping” both sides of the street. Threshold resistance in the form of a moatlike barrier of flowing cars, buses, and trucks stands in the way of the merchants' sales opportunities. Over time, this serious impediment will diminish sales significantly, leading to lower rents and lower tax revenues. It's expensive and complicated for a city to improve this situation. You could construct another parking deck a few blocks away to create more 100 percent locations. You could attract a second department store to town—if the existing department store management is not powerful enough to block it. You could close off a few blocks of Main Street to vehicular traffic. But these remedies are far from perfect; each requires millions of taxpayer dollars.

Now imagine you had a blank sheet of paper and open space relatively unencumbered by existing street grids, buildings, and political resistance. That's what we had in the 1960s with our big mall sites. We
had the ability to make improvements and design a more effective shopping district. When I was interviewed by
Business Week
in 1971, I told the reporter that “with Woodfield we are not competing against other centers or suburban business districts. We are competing against downtown Chicago. So we must come as close as we can to the strength and depth of selection you find in Chicago's core area.”

Like the typical downtown retail district, our plans included anchor department stores—ideally, at least two; three, four, or five is even better. We call them “anchors” because they anchor the property from both a physical and business point of view. The anchor brands defined the center in the eyes of the customer and provided the promotional impact to draw traffic. Pick up any major-market daily newspaper and you will find heavy advertising for the area's department stores. These powerful, well-defined merchants actively attract shoppers to their stores—and thus, to the mall—day in and day out. For decades, they were also the only retailers to offer credit to customers. So department stores act as “people pumps,” and mall developers compete aggressively to secure their participation.

Years ago, a senior Taubman Company marketing executive asked me what I thought would be the most effective print advertisement for one of our shopping centers. Never passing up a chance to doodle, I sketched an ad with a bold headline that read, “Sale Today at Bloomingdale's.”

A bit confused (and probably disappointed) the executive asked, “But, Mr. Taubman, aren't you going to mention the name of the center?” “Look closer,” I said. “The center is listed as one of the Bloomingdale's locations in the New York metropolitan region. Shoppers in our trade area will see the ad and come to our Bloomingdale's. If we've done our job right, they'll be drawn into the mall, and every tenant will have the opportunity to benefit from the Bloomingdale's ad I just sketched.”

The smaller tenants thrive on the traffic in the mall between the
anchors, as shoppers comparison shop the center (the same way people shop the stores between the department store and parking location downtown).

In thinking about the interior design of malls, I was heavily influenced by a small but powerful book called
Townscape,
by the British architect and editor Gordon Cullen. First published in 1961, it should be required reading for every developer, architect, urban planner, and zoning official. Cullen introduced me to the importance of serial vision in planning productive, stimulating space. It's not that I didn't think about these things before reading Cullen's book. In fact, I'm cursed or blessed with what some have called “third-dimensional” or “parallax” vision. With essentially every object or vista I see, I think about how it could be better. Not just different. Better. But Cullen captured these hard-to-describe concepts in understandable, almost poetic language. Here is his paragraph on optics from the introduction to
Townscape:

Cullen explains that “a long straight road has little impact because the initial view is soon digested and becomes monotonous.” He
underscores the importance of what he calls “the existing view and the emerging view.” And then he suggests that the experience we enjoy whenever visiting an attractive town is more than “an accidental chain of events,” and argues that planners can use this understanding to create better, more stimulating environments:

We wanted our customer to have much the same experience Cullen describes so beautifully in
Townscape
(which is still available in a paperback version published by Architectural Press under the title
The Concise Townscape
). Again, the objective was to give every retailer a good chance of attracting the shopper into the store, to make every location a 100 percent location.

The message didn't always sink in. Years ago, I was reading a newspaper article in which one of our mall managers was asked to point out the “best location” in his center. I suppose that's a fair question for an innocent, uninitiated reporter to ask. The answer, however, was unforgivable. Our manager pointed out a location on the mall's second level near a particular department store. Now, for a particular tenant, perhaps there is a best location in one of our centers, and we work hard to determine that spot based on a whole host of variables. But to suggest that such a thing exists for a generic tenant is just short of sacrilegious! Creating 100 percent locations for all tenants is what we're all about. Counting to ten, I asked our head of operations to have a chat with the mall manager in question. I don't think he made that mistake again—at least not at one of our properties.

The key to creating 100 percent locations is moving customers effectively through our space. With inexpensive suburban land costs, it would have been cheaper (in construction expense) to spread out all the tenants on one level between potent department store anchors. But we took da Vinci's warnings to heart, and stacked the stores on two levels, creating mall corridors between the anchor department stores of around 1,000 feet, a comfortable stroll of three city blocks. We punched holes in the upper flo or, allowing customers to see the stores on both levels and encouraging shopping on both sides of the corridor—retail “undulation” that would be impossible along a busy urban street. We also installed clear handrails on the upper level to preserve unobstructed sight lines, and placed vertical transportation systems (escalators and elevators) on the ends of the mall corridors to create a balanced flow of customers past every store. To test the effectiveness of these measures, at Southridge, a center we opened near Milwaukee in 1970, we gave incentives to a candy store and a hosiery store—two impulse operations—to open one store on the upper level at one end and an identical store at the lower level on the other end. We tracked each operation's sales and found that the stores ran within 4 to 5 percent of each other per month. That showed we could equalize traffic through external and internal control.

Next: parking. We surrounded the mall with convenient, close-in parking fields, free of charge. Understanding that people, like water, flow downhill much easier than uphill, we built more upper level parking (about 15 percent more than the lower-level parking areas) to assure a better balance of shopper traffic. And to reinforce that balance, we convinced the department store operator on one end of the center to reverse its traditional merchandising layout, offering the customary first-floor departments—cosmetics, jewelry, handbags—on the second level. The department store on the opposite end of the mall would merchandise in the usual manner.

Even regular visitors to Taubman malls may not notice that there
are upper and lower parking lots. We graded the land to create these changes in elevation in such a way that the customer rarely thinks twice about this important balancing act. But the difference in overall mall tenant sales is dramatic. Every space along the mall corridors becomes a 100 percent location.

To allow easy access to any parking area (our centers have no front door or back door), we designed a ring road circling the entire property. Feeding cars safely onto the ring road off major thoroughfares are what we call magazine roads—because they function much like the magazine of a gun, “loading” a number of cars for release onto the ring road. Every turn off a magazine road onto the ring road is a free right-hand turn, which allows traffic to move unimpeded.

Inside, we created an environment in which very little would stand between the customer and the merchandise. Every surface was important. For example, we determined that the flooring—the only surface the customer ever comes in contact with—was to be durable but attractive terrazzo tile patterned with regular grout joints to allow economical repair and give women with thin-soled shoes more confidence and comfort as they walked the mall. This was a dramatic improvement over a typical city's cracked sidewalks, gutters, and gratings. And to assure easy access for baby strollers and wheelchairs, our centers were built essentially barrier free.