Saturday, March 06, 2010

The retail horror story we face

This country is facing a retail crash that will make the housing crash look small, says McDuffie "Mac" Nichols, who grew up in Charlotte and is a South Meck alum. He's talking to the N.C. State Urban Design conference in Raleigh.

"The credit crisis on housing is nothing compared to what's coming up this summer over commercial loans," he says. A slew of loans for commercial development are all coming due this summer. And the projects are failed. "Every mixed-use category is in distress," he said.

The underlying problem: The U.S. has built way, way more retail space than we need. In the U.S. we now have 20 square feet of retail space per person, he says. Compare that to Great Britain,with 2.5 square feet per person. That one drew audible gasps and an undercurrent of aghast comment from the crowd.

One-third of all enclosed shopping malls in this country are obsolete, he says. Nichols, who now lives in the Washington area, grew up in Charlotte and graduated from South Meck. (He's among the consultants the City of Charlotte has hired in recent years to study Eastland Mall.)

The challenge will be what in the world you do with all those dead retail sites - vast surface parking lots with a building in the middle. That will be one huge urban design challenge of the next decade.

Other needs he's citing for economically resilient cities:
- strong, high-quality public education.
- much better transit networks, which will reduce the cost of development if you don't have to spend so much for parking. (See my op-ed today on "How we love/hate our parking lots").

2:25 p.m - More from Mac Nichols (he's great): He advises designers/consultants to always say "Parking will be an issue," because A) They'll be right, and B) Everyone will be forewarned, because parking is going to be an issue everywhere, for a long time. But, he tells the crowd of designers, make parking work for you.

Don't overbuild just because someone loves an idea, he says.

"Economics is the foundation of design solutions." You've got to understand the underlying economics. Otherwise it's like designing a landscape without understanding the topography."


Theo Tiefwald said...

"The challenge will be what in the world you do with all those dead retail sites - vast surface parking lots with a building in the middle."

This is VERY easy to remedy. Come on..think about it.

Just TEAR IT ALL DOWN and return it to Nature...(re)plant trees where they used to be, build parks, make community gardens, dig a pond or lake in its place, turn it in to a baseball or soccer field, etc.

This would create millions of jobs - people could be paid to dismantle all of these old buildings and properties, and also to recycle or reuse all of the old building materials as much as possible.

If the area or space is useful, just tear down the old building(s) and put new ones in its places using the latest and best planning methods.

I laid this out in a blog post - "Constructive Destruction" -

I wrote:

"Thus I propose that we engage in a long-term phase of ‘constructive destruction‘ wherein we tear down very many of the old, useless, and decrepit buildings, shuttered factories, decaying neighborhoods, and so on and put better things in their place or even return those areas to natural greenspace. Luckily this is occurring in some areas of the USA, but not at nearly a quick enough pace. This will serve to create many jobs, since it would take literally decades to remove, rebuild, and/or retrofit many of the old buildings and areas which were rashly built in the last 100+ years of mass-industrial fervor.
For instance, if we take an old factory which has been closed down for decades, a building (or buildings) which is nothing but an ugly scar on the landscape that attracts crime and creates pollution: we could employ dozens if not hundreds of people to descend upon the site and tear the old factory down, being very careful to fully recycle any potentially reusable materials. After the process of destroying/dismantling the site is finished, local/community planners could be employed to find various ways to re-utilize the newly opened up space. If there is no need for new industry or jobs in the area, the site could simply be turned in to ‘ecodense’ housing (if it is needed), or a public park, or it could be reforested, or a school could be built, or a local lake/reservoir could be dug there, or even large public garden(s) or orchards could be created, and so on and so forth. The possibilities are literally wide open, because obviously anything is better put in the place of ugly, blighted, and abandoned buildings or old factories."

Theo Tiefwald said...

And I don't care if someone steals my aforementioned idea to make money off of it by starting their own demolition company to remove a bunch of old blighted building and shopping centers and either return the areas to Nature or else put something better in its place.

So go ahead, I encourage you to steal my ideas in order to improve the environment of the USA. I ain't greedy.

Theo Tiefwald said...

Some people have actually started to do this in some areas of the USA -- in Michigan and other post-industrial areas:

"The US government is looking at expanding a pioneering scheme in Flint, one of the poorest US cities, which involves razing entire districts and returning the land to nature" -

Jumper said...

Nice column today.
Enough pavement in the U.S. to cover the state of Georgia?

Every time someone proposes massive solar power, someone says it wouldn't work because you'd have to cover land equivalent to, oh, let's say, .. Georgia. "Even the environmentalists would object to THAT..."

Catch my drift?

2whls3spds said...

Repurpose the malls as new town centers, convert to mixed use with housing/apartments, restaurants and office space. Make them small towns unto themselves. Apartments and patio homes could be built on the outer reaches of the massive parking lots. But I doubt it will ever happen due to credit constraints.


Brendan said...

@Theo; I agree with what you want to do, but I don't think it is nearly as profitable as you make it out to be for a private investor. The only way it would work is if the government paid for it or subsidized it, which means raising taxes (which I'm also not against considering we pay some really low taxes). Greenspace, park, pond/lake, natural area: they all create public good but none of them generate profits, which means they will be public works projects in their entirety.

If you are talking about tearing down something old and replacing it with something new that does generate revenue, you could get private investors on board. However, many brownfields (former industrial locations) are stagnant for a reason. The EPA requires the owner to clean it up before doing anything with it. And "clean it up" usually means washing the dirt which is a lengthy and expensive process. No one wants to do it if they own the property and no one wants to buy a property that will require them to do that. So, the government usually has to step in and supply the funds (ie, subsidize) to entice investors to build on these spots.

Condemnation proceedings against private home owners in blighted neighborhoods are also a nightmare and due to property rights issues and the difficulty in combining parceled real estate, the legal battles can take years to buy up even a single block of blighted homes.

All in all, I like where you're going. But, the reality is it won't work without a substantial infusion of money from the government which requires people to pay more in taxes.

@Jumper; Most environmentalists aren't worried about the amount of space that solar panels take up because they need to be in places that get a lot of sun year round. That means out in the deserts of the western US where nobody and nothing lives anyway. If you covered the irradiated lands of Nevada with solar panels you'd have an area the size of Georgia easily, and you wouldn't have any environmentalist concerns.

The things that don't make this feasible right now are ineffective battery storage (because solar power is non-continuous) and transmission from a localized area to places around the country as they need it. The solutions to this are in the works with both nationwide smart grid technology and high capacity battery storage systems. (The best way to store massive amounts of electrical energy currently is to pump water uphill).

NoDa Public Gallery said...

I wanted to comment on Mary's Opinion column about parking lots love/hate - but can't get into the "O's" log-in. I will try to tie it into this Blog as well:

Charlotte has more than 10 or 20 years of bad planning to (tearing down our buildings) to overcome. In fact, we have over a hundred years of inappropriate planning in that we never built standard on-street parking into our roads. The roads were for traffic and that was it - from day one. Now, were longing for pedestrian experience (everything from sidewalk cafes to window shopping) but we can't have that because the shared realm of road/sidewalk/storefront was not prioritized until it was too late. Now we lament our few walkable neighborhoods - but even our beloved Myers Park was not built for a complete experience.

We're designing faux-main streets such as Phillips Place and Birkdale, but these places are islands unto a sea of uncomfortable roads. No one will ever walk to Phillips Place - instead we must drive and park and treat it like the mall that it is.

Lana said...

>> More from Mac Nichols (he's great)

Just curious, Mary. Do you call Mac Nichols "great" because he challenges you and tells you things you don't know (and possibly don't want to hear), or because he agrees with you 99% of the time?

Lana said...

Mr. Tiefwald,

The "constructive destruction" thesis you put forward (employing people to "dismantle all of these old buildings") is known as the Broken Window Fallacy (not to be confused with the Broken Window Theory). This fallacy encourages (or at least tolerates) breaking things so that economic activity can take place to repair them.

Of course the problem is that the thesis ignores the opportunity cost - what could have been done with the resources dedicated to repairing the damage had the damage not occurred. Is destroying a building the best use of a person's time? Is paying a person to destroy a building worth taking money out of the pocket of a single mother trying to feed her child? And what of the building owner's rights?

I note that your posts do not propose a funding method for your plan. This is not surprising, since robbing Peter to pay Paul to destroy Peter's property is entirely immoral from start to finish.