If Your Power Center is a Greyfield, Do You Develop a Black Hole?
Time to introduce you to a couple of new real-estate jargon terms that are going to effect the way we think about development.
The first is ‘greyfield’ space. This term was developed by Price Waterhouse/Coopers to describe commercial space generating less than $150 per square foot per year. Since the term’s introduction, the meaning has been expanded to describe retail space that has lost significant value and is ripe to see the current structures on these spaces demolished and replaced with new retail and mixed use environments. Developers often prefer ‘greyspace’ to ‘greenspace’ because pristine undeveloped land is scarce and zoning battles are far tougher to win. Often, these spaces are ‘dead malls’ which already have substantial acreage.
In Atlanta, Atlantic Station is most obvious success story. North Dekalb Mall, Avondale Mall, Greenbriar Mall, and South Dekalb Mall may well be on their way to ‘greyfield-dom’.
The second term is ‘Power Center‘. This is a commercial facility which explodes the development and the growth of the community around it. It’s not just a mall, it’s the center of gravity for the community, causing big box stores, restaurants, and other developments to come in where previously there were none. Lenox Square is clearly the longest running power center in Atlanta, though in recent years, Stone Crest is the most obvious example. When it went up the entire Lithonia community changed and has been an economic engine for both Rockdale and S.E. Dekalb County.
What happens when you have both trends at once? While technically not Greyspace, both Gwinnett Place and Cumberland Mall in Cobb have lost some of their luster and have not seen rents climb as fast as other malls in the community. Yet they still remain power centers. The Vinings Jubilee draws directly of cumberland’s gravity as does the Galleria Center and the other businesses along 41. Gwinnett Place has seen both big box stores such as Fry’s and Nightclubs such as Wild Bill’s join the area even as the mall itself became less popular.
The question becomes who will drive the re-imagination of the malls? Will their status as power centers slowly rebuild their customer base or will the other retailers in the area appeal to zoning boards and developers to actively change the nature of the structures so that the centers of gravity they provide do not become blackholes which in 10 years suck all the life out of the communities?
Another question is: Do we want all new large scale developments to be power centers and how will the power center notion effect our thinking? Clearly, there are serious externality questions that come into play. If a majority of Lithonia and Rockdale County residents benefit from the new power center, should the developers receive favorable treatment? Is that a tool other communities will use to entice new developers into their communities? What are the right answers here?
These are ideas and questions the Atlanta Regional Commission will begin to have to deal with especially as the number of governments increases and begin to compete to have retail to build their tax bases.
November 27th, 2006 at 4:15 am
lol…deadmall.com feels the need to define ‘arcade’, in mallspeak. Damn you, consoles! PCs, get off my lawn!
Really, though. Is there that much competition for retail? Place a big-box location on each highway spoke, and one intown. Hell, there’s even a Cracker Barrel going up on Windward Parkway.
After the buildout, it’s a matter of time as to which malls are deemed useful; Lenox/Phipps gets a break because of their north Atlanta location (and a small boost from history, by now). Gwinett and Cumberland? Both are seas (morasses, really) of retail, and it’s quite possible the malls themselves have become lost amidst the big boxen.
Really, if the malls become outdated and useless, while their surrounding retail thrives, bulldoze the malls into parks, and run a doughnut formation. It’s kind of like Piedmont Park, which (last I checked) generates a lot less than $150/ft^2, and spurs a lot more growth nearby.
Yes, I’m expanding the definition of ‘greyfield’ beyond commercial, to apply to civic spaces; I think they apply. Also, I consider ‘retail’ to be synonymous with ‘whoring out,’ and the sector a drain on economies and cultures.
November 27th, 2006 at 8:47 am
Aren’t you ignoring the demographic component linked to the location of these malls. Lenox is near lot of young folks in Buckhead with disposable income. Stonecrest is near many middle class young African Americans with disposable income.
Avondale Mall will be remodelled alright-but as a Wal-Mart.
November 27th, 2006 at 7:47 pm
T - While the demographic component does figure into the formula retailers use in their location decisions, it’s really tangential to Robert’s argument here.
In his book “How Cities Work,” Alex Marshall discussed a similar concept as what Robert discussed. As one area overheats with growth and development, the growth spills off to other areas, which act as “pressure-release valves.”
The PRV metaphor is quite relevant here — in a healthy city, a PRV is only big enough to release so much pressure at a time. The circumstances that created the pressure to begin with can sustain themselves as long as the pressure doesn’t escape too quickly. In the cases of the greyfields Robert mentioned, the growth and development moved away too quickly for Gwinnett and Cumberland malls to sustain their energy — the PRVs were too big.
In a place like Atlanta, which has built itself to be very dependent on large highways, large PRVs will be more the rule than the exception. Places like Vinings and Little Five Points are far-enough removed from limited-access highways that they’re better equipped to sustain their growth and development, even as the pressure flows over to nearby areas.
For an example of a mall conversion to a town center, check out Dover-Kohl’s plan for Eastgate Town Center in Tennessee (PDF).