Busy buyers move quickly along the fifth floor of the marble-faced colonnade. One floor down, money and public assistance are distributed by government bureaucrats. On the second and third levels, exotic spices of the East are stored and sold. At grade, pedestrians amble past flower peddlers, fruit stands and administrative offices. With more than 150 shops, government offices, extravagant sculptures and public areas, Trajan’s Market is not a trendy lifestyle center in California, but a tiny piece of Ancient Rome’s massive mixed-use complex, The Forum.
The history of mixed-use development is lengthy, “around since the cavemen,” said Emerick J. Corsi Jr., executive VP for commercial development at Cleveland-head-quartered Forest City Commercial Group. Before the proliferation of the automobile, the practicality of keeping the places people worked, lived and shopped together was indisputable. But, as transportation considerations became secondary and returning World War II veterans coveted a quiet place to start their families, people moved out of the cities and into the suburbs. Developers met the retail needs of this new demographic by designing enclosed malls.
Today, of course, mall development has dramatically decelerated. Rising gas prices have impacted consumer-shopping patterns as escalating land prices have raised costs for developers. More significant is that confinement to enclosed retail is not as palatable to the 21st-century consumer as it was to previous generations.
Joseph Coradino, president of Philadelphia-based Pennsylvania Real Estate Investment Trust’s (PREIT) retail division, describes the trend away from enclosed malls and toward open-air as “a response to quickly evolving customer shopping patterns.” According to Coradino, Americans are busier then ever; shoppers no longer have time to walk across a massive parking lot and through the entire mall before reaching their retail destinations. In addition, on those occasions that consumers do have leisure time, they desire a dining and entertainment experience.
To accommodate consumer cravings, Coradino said that PREIT is “turning some of our malls inside out.” And mixing uses. Less than 20 miles from Philadelphia, in Voorhees, N.J., PREIT is transforming the existing Echelon Mall into Voorhees Town Center, with 145,000 sq. ft. of lifestyle street shops, a 65,000-sq.-ft. neighborhood supermarket and 425 luxury apartments and condominiums. Adjacent to the center, The Mall at Voorhees Town Center will be anchored by Boscov’s and Macy’s. By redeveloping Echelon, PREIT intends to add value, utilizing the full potential of the mall’s superb location by adding vertically, bringing in entertainment and restaurants, adding open public spaces and by districting, which allows customers easy access to any area of the mall. According to Coradino, PREIT plans to “take a fairly static shopping environment and reinvigorate it.”
Beyond serving as a format for mall redevelopment, mixed-use centers are rising from the dust as ground-up developments. Forest City’s vision of a mixed-use center is Konterra, “a shopping complex that doubles as a place to live, work and play,” according to Corsi. Just 30 minutes from both Washington, D.C., and Baltimore, the 2,200-acre mixed-use Maryland community, when complete, will consist of 2.5 million sq. ft. of retail, 7 million sq. ft. of office space, more than 3,500 residential units, three hotels, cultural amenities and education facilities.
The nucleus of the development will be bisected by Interstate 95. The 488-acre Konterra Center East will feature 1.5 million sq. ft. of upscale retail along with an array of residential and office locations. The 253-acre Konterra Center West will become home to more than 1 million sq. ft. of retail. Millions of square feet of office space and residential will form a ring around the community’s center. Large public spaces and lush landscaping will be scattered about the entire Konterra community, fulfilling Forest City’s strategy of “including the amenities that residents require anywhere they live,” said Corsi.
The benefits of combining residential, commercial and retail are easily apparent. “For consumers, it provides multiple uses in one location, which leads to convenience,” said John Bacon, VP of marketing and communications for RED Development, co-headquartered in Kansas City, Mo., and Scottsdale, Ariz.
“The demographics that drive retail are residential,” added Josh Poag, executive VP and CFO of Memphis, Tenn.-based Poag & McEwen Lifestyle Centers. By concentrating the places that people live, work and play, the developer not only embeds a permanent market, but also diversifies sources of income, fully leveraging the economic potential of the land.
While developers and retailers eye the economic potential of mixed-use centers, shoppers are excited by what can only be described as the extravagance of many of these developments. The open public spaces and custom architecture that characterize today’s mixed-use format help “create a greater sense of place, a greater scale for the project,” said Poag.
Poag & McEwen’s Highland Row in Memphis will provide excitement for Southerners’ shopping safaris. Designed to reiterate the character and fabric of a traditional neighborhood or community while still injecting the vibrancy of uptown living, the project will contain approximately 97,000 sq. ft. of retail space and 220,000 sq. ft. of distinctive downtown-style residences.
Located within one block of the University of Memphis and in a prime position to better serve the vibrant areas of downtown, midtown and East Memphis, Highland Row is being created to provide a choice destination for retail excursions.
As Poag & McEwen develops an underserved area of Memphis, RED will in large part reinvigorate downtown Phoenix. CityScape, a 2.5 million-sq.-ft. mixed-use center that sprawls across three blocks of downtown Phoenix’s Copper Square district, is within walking distance of City Hall, the Symphony and the U.S. Airways Center. CityScape, which is designed around a public park, will combine more than 1,800 unique residences with offices, hotels and 250,000 sq. ft. of retail, dining and entertainment.
However, benefits that a mixed-use development provides are equaled only by the challenges it supplies. “It isn’t easy to make multiple uses work together in one project,” explained RED Development’s Bacon. “Vertical stacking of condos and offices above retail guarantees logistical headaches.” But because a weighty number of today’s consumers desire the convenience of an urban setting, the challenges of mixed-use undertakings are more than worthwhile, said Bacon. And great success can come from great design.
The Sembler Co., based in St. Petersburg, Fla., has found such success through mixed-use development. According to Jeff Fuqua, president, “People really like to live in the action of a retail environment. They like to walk to the retail they frequent.” When asked whether there’s any chance of overdeveloping the format, Fuqua explained, “It’s smart growth. It takes traffic off the road; it combines uses and increases density; it reduces sprawl. It’s all about the environment. High density is green development.”
Sembler’s Brookhaven Village, opening in 2009 in Atlanta, is on the cutting edge of mixed-use, combining big-box retailers, junior anchors, Main Street boutiques and restaurants in its 600,000-sq.-ft. retail space. More than 1,500 residential units, a five-story, 150,000-sq.-ft. office tower and vast public spaces complete the 50-acre urban walking village.
Time has changed the names and faces of the retailers and has altered the building materials used, but the concept of mixed-use is truly ancient. Today, as cities swell and the prices of both land and gas rise, developers are maximizing their investments by building vertically and mixing uses. The law of accelerating returns postulates that the swiftest change is in the rate of change itself. In a world in constant flux, mixed-use’s flexibility ensures its survival.