Andrew Yang threw a punch at Amazon during Wednesday night’s Democratic debates, which served, in part, to bolster his presidential campaign’s plan to save traditional retail. And the key to saving traditional retail, Yang believes, is to save the mall.
“Raise your hand in the crowd if you’ve seen stores closing where you live,” he asked from the debate stage in Detroit. “It is not just you. Amazon is closing 30 percent of America’s stores and malls and paying zero in taxes while doing it.”
Yang’s claim is a little misleading — Amazon is not actively shutting down stores or malls, but rather is a contributing force in brick and mortar’s waning relevancy. Still, he speaks to a bigger issue, and puts forth a unique theory: Traditional retail must change or it will die, and it might need federal aid to do so.
Yang is an entrepreneur who says he made millions as CEO of test prep startup Manhattan Prep, which education services provider Kaplan (then owned by the Washington Post) acquired in 2009. He’s one of two non-career politicians competing for the Democratic ticket — and he may be the only one with a mall plan.
Dubbed the American Mall Act, Yang’s policy would fund struggling malls with matching grants and tax incentives to the tune of $6 billion. Investing in and revitalizing dead malls doesn’t just mean bringing retail back; he’s also a big believer in transforming and repurposing malls into “[o]ffices, churches, indoor recreation spaces, anything we can do to keep these spaces vital and positive is an enormous win for the surrounding community,” reads his campaign site. Mall closures, Yang tweeted last month, “have a disastrous effect on local property values.”
Malls are dying, we know. At one time the US was home to 25,000 shopping centers, 2,000 of which loomed large as the classic enclosed variety that we picture when we talk about “the mall:” climate-controlled, multi-level, windowless and flanked on each end by well-lit department stores. There are just over 1,000 indoor American malls alive today, with analysts putting the number of mall closures within the next five years at between 20 and 25 percent.
A sector of the mall market manages to survive, and in fact thrives, as I reported for Racked in 2016: the luxury mall. According to data from real estate research firm Green Street Advisors, the nearly 300 malls graded A++ through A- in mall performance today — maintaining strong sales and top-tier tenants — account for 80 percent of overall mall value, while the nearly 400 lowest-performing malls maintain scant occupancy and account for less than 1 percent of mall value. Put another way: Hundreds of malls are doing very well, but more are not.
Abandoned malls are what the Congress for the New Urbanism coined “greyfields,” as reported by CityLab, for the seas of parking lots that surround them. Yang’s campaign pledge to transform vacant malls into multi-purpose spaces is right in line with New Urbanism’s architectural and urban planning movement to create mixed-use, “live, work, shop, play” centers — like The Domain in Austin, an open-air, pedestrian-inclined center owned by high-end Simon Property Group that houses “upscale and mainstream” retail and dining, Whole Foods, yoga and spin studios, office space, mid-rise apartments, salons, spas, and a couple hotels. This year, the International Council of Shopping Centers (ICSC) found that 78 percent of US adults would consider living in such a center.
For Yang, dead malls are a symbol of an economy in flux as much as they are real problems demanding real solutions, a representation of what Yang describes as an employment crisis well on its way. The next 12 years, says his campaign, will see a third of American workers in danger of job loss thanks to automation wrought by new tech. In response, Yang’s central campaign promise is to pay every American adult citizen a universal basic income of $1,000 per month, funded by a value-added tax and called the Freedom Dividend. It’s the centerpiece of his platform.
Yang’s mall policy is an otherwise distinct piece of his platform; what it shares with his UBI policy, however, is a business-focused effort to stimulate local economies. Investment in malls, Yang says, will create jobs. As Connie Wang writes for Refinery29, “In a presidential primary in which Democratic candidates are debating the virtues of socialism versus capitalism, Yang has presented a third option that’s resonating with a community of entrepreneurial millennials who pride themselves on practicality: The government should recognize the ills of capitalism, but the solutions should lie in government-backed, business-oriented policies.”
Yang’s vision may be untenable, given that not every struggling mall has much chance of life after death, due to location challenges and zoning disputes (as CityLab notes), not to mention an ever-changing retail landscape. And some cities are either wary of receiving federal aid, or unable to put in the funds necessary to receive a matching grant, reports Wang. In other words, not every mall can simply reinvent itself as a luxury mixed-use center, and catapult itself into the upper echelon of top-performing malls.
Yang and the “Yang Gang,” however, are poised to try. With unique donors exceeding 130,000 and polling numbers hitting 2 percent in three out of the four required polls, the candidate is close to qualifying for the next Democratic debates.
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