.Shopping Bawl

news-1-CapitolaMallAmerican malls are disappearing. Is Capitola’s part of the trend?

The 21st Century is a bleak one for the nation’s malls. Once meccas of middle-class suburban affluence, these plazas are quickly becoming ghost towns. Some of the country’s largest and oldest malls, like Michigan’s Northland Center, are already gone, while shopping centers like Maryland’s Owings Mills are practically on their last breath. A photography book by Seph Lawless called Black Friday: The Collapse of the American Shopping Mall depicts abandoned settings more fitting for a post-apocalypse film than a spending spree.

Earlier this year, the New York Times reported that two dozen shopping malls have closed in the past four years, with 60 more “on the brink.” Malls with 40 percent vacancy are considered highly at risk of closure, and any centers with upward of 70 percent vacancy are considered to be in critical condition. According to the Times, 15 percent of malls report 10-40 percent vacancy, up from 5 percent in 2006. Green Street Advisors, a leading real estate analysis firm, estimates that 15 percent of the nation’s 15,000 malls—or about 2,250—will go under in the next decade.

The Great Recession left a wreckage of shopping centers in its wake after consumers tightened their wallets and refrained from spending the little money they had. An explosion of online sales also tore away at the foundation of suburban capitalism, as consumers found cheaper sales and direct-to-door service with companies like Amazon and Ebay. According to the U.S. Census, e-commerce has risen 14.5 percent in the last year alone.

With so much uncertainty in the former bastion of retail luxury, it’s no surprise that rumors are circulating about the health of our own Capitola Mall.

“People are shopping a lot less,” explains an employee at Cathy Jean Shoes, who asked only to be identified as Bianca. “Especially since a lot of the bigger stores have shut down.”

Shortly after opening in 1977, the Capitola Mall rivaled Pacific Avenue as the Santa Cruz area’s premier shopping experience. However, in recent years several major retailers have left the mall, including Forever 21 (which is now on Pacific Avenue), J.C. Penney, Coach, Abercrombie & Fitch, Wet Seal—which filed for Chapter 11 bankruptcy in January—and most recently, Carl’s Jr.

“A lot of people are going to San Jose or Salinas because our mall doesn’t carry stuff anymore,” says Bianca. She ventures that many businesses have left because of the high price of rent. Many mall employees were reluctant to give their full names for this story. A mall security guard eventually stopped GT from interviewing people at all.

GT visited the mall’s management office, but a representative from Macerich—one of the country’s leading owners, operators and developers of major retail properties—which owns the Capitola Mall, wished to remain anonymous because they “don’t like to talk about the tenants.” The representative claims the Capitola Mall is still doing well, with new eateries like Gyros & Grill Express, Tres Bros Tacos and Five Guys Burgers coming within the next few months. She also says a “popular shoe store” will be opening up just in time for the Christmas season, however, she declines to say which one. The rep, a four-year veteran, says rates are “very comparable” to rents on Pacific Avenue.

The health of the mall isn’t just important for Macerich, or the retailers inside. Capitola city leaders project the sales tax from the mall will provide $7 million next year—half of its budget.  It’s hard to determine exactly how many vacancies are currently in the Capitola Mall, with half of the food court under reconstruction, but it appears to be roughly 20 percent vacant, falling within the median range.

It’s safe to say the state of our local mall isn’t totally apocalyptic, with some stores doing better than others. For instance, Hot Topic—the mall’s chain rock ’n’ roll clothing store—has a niche market with no real rival business in the Santa Cruz area. “We’ve seen a drop in foot traffic. But we’re still doing well for the season,” says Dai Graham, the store’s manager. “There would be an even better turnout if we had more things going on here [at the mall].”

On a typical afternoon, the shopping center seems calm and almost lonely. Stray teenagers hang out, while mothers tend to their daily errands as a rush of mall employees dart between their lunch breaks and work.

In 2011, the City of Capitola agreed to set aside $1.3 million to improve Metro’s bus bay at the mall—moving it from the front to the back of the shopping center—in accordance to other beautification projects Macerich had planned. However, the mall owners have yet to break ground on any reconstruction. According to the 2011 deal, Macerich doesn’t have to begin work on the transit center until April 2017.

Some people are anxious to see something get underway. “$1 million may not seem like a lot to [Macerich], but it is a lot to the City of Capitola,” states Capitola Planning Commissioner Susan Westman, adding that the company has been difficult for city officials to reach as well.

Last year, Capitola once again tried pushing the mall forward by adopting new zoning codes and a new General Plan for environmental and financial sustainability. The General Plan calls for an evaluation of open-air mall opportunities.

Still, the question remains: Are Santa Cruz residents willing to spend their hard-earned dough in a complex that seems so last century? “I don’t go there,” says Mark Hutchinson, a local general contractor. “Everything is marked up because you’re helping to pay for employee wages and rent … If you’re about ‘trimming the fat’ and saving money, it doesn’t make sense to go there.”

Another Capitola City Planning Commissioner, Gayle Ortiz, is already thinking big about possible futures for the mall. She believes the complex “might be too large for future use in retail,” because people aren’t gravitating toward shopping destinations in general these days.

“I can envision a large corporation—maybe a dot-com—taking over a percentage of it,” says Ortiz, also the owner of Gayle’s Bakery and a former mayor.

Even with the loss of certain retailers, Ortiz says that it would create more jobs with employees spending their money on local businesses and restaurants.

“The economic and retail landscape is changing so quickly that anything we’ve come up with —two years ago or even further back—is just not applicable,” says Ortiz. “I would like to see the city appoint an economic development committee with professionals, retailers and citizens to make recommendations for what the mall could be today.”

Award-winning architect Andrés Duany, something of a visionary when it comes to urban planning, has talked about big ideas in general when it comes to malls.

In a lecture in Alabama last year, he explained that crises like global warming and peak oil are intertwined with changes in the economy. He says the automobile helped created a suburban middle class lifestyle that will prove unsustainable as gas prices climb. “Suburban sprawl emerged because in the pursuit to accommodate the automobile, we made walking impossible,” says Duany, also cofounder of the Congress for the New Urbanism.

In the next century, he says people will look to work and shop where they live. “Grey fields,” as he calls them—parking lots and shopping malls
—could one day become mixed-use, pedestrian-friendly communities with both housing and retail.

That future is quickly approaching for some malls. Just last month, a Bay Area property company announced a $3 billion renovation of a failed Vallco shopping mall in Cupertino. The project boasts 800 residential units, 625,000 square feet of retail, a vineyard, and 2 million square feet for offices. To top all of that, it will have a 30-acre elevated park above the site, with almost four miles of hiking trails—making it the world’s largest green roof.

Local architect Mark Primack is intrigued by the ambitious plan. He says it is time to start rethinking zoning laws, which generally create separate areas for different kinds of development. Primack recently worked on the mixed-use, 20-acre Delaware Addition Neighborhood, until the project was stalled for financial reasons.

He believes cities like Capitola must start thinking outside the box when it comes to shopping malls and start envisioning eco-friendly mixed-use communities.

“It’s like monocropping. We’re relying on just this one crop for our sustainability,” Primack says. “What happens when it fails?”

UP FRONT Capitola city leaders are worried about the state of its mall. Mall management doesn’t want to talk about it. PHOTO: KEANA PARKER


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