- How about Stonestown?

- Oh, that was so much fun.

My six hours just flew by.

I kept sending her texts like, sorry, you're, you're stuck over there.

I just got served sushi by a robot, but we had a fun time and it was just packed and thriving and - Yeah, - Yeah.

- Welcome to Forum.

I'm Alexis Madrigal.

If you came of age at a certain time in American history, the mall was everything.

There was home, there was school, and for all other things, there was the mall.

In this era before commercial internet and widespread e-commerce, the mall gathered together all the clothes and home goods and music shops.

And there was also a food court filled with food of dubious origins where you could get a hot dog on a stick.

But there were decades of American life before the invention of the mall.

And perhaps there will be decades of American life after the mall, at least as I knew them.

Here to discuss the present and future of our Bay Area retail aggregators, we are joined by Heather Knight, San Francisco Bureau Chief with the New York Times.

She co-authored the recent story "A Day at Two San Francisco Malls, One That Died, One That Thrived."

Welcome Heather.

- Thanks for having me.

- We've got Michael Berne, president of MJB Consulting, which is a retail focus firm.

Welcome.

Thank you for having me, Alexis.

And we have Kirthi Kalyanam, who is a professor of marketing and executive director of the Retail Management Institute at Santa Clara University.

Welcome Kirthi.

- Thank you for having me.

- Yeah.

Heather, let's just walk through your story.

You know, you spent some time going to two different malls.

Which malls were they and how did you decide how to compare them?

- I'd been wanting to write about the downtown mall for a long time, but everybody's been writing about that one.

We've been hearing about it for a few years now.

Famous Dead Mall.

But I kind of wanted to bring the, the positive side to it as well.

And I know that Stonestown is huge.

I have a teenage boy who goes there all the time and hear about it.

I've been there myself.

There's great restaurants.

It's packed.

You cannot find a parking space.

So I thought, what if another reporter and I team up and we spend a Friday night at both malls.

I got to pick the Fun mall.

I was like sitting in that dead mall for six hours would be really boring.

- So what did you two see?

Like, what did you see at each place?

- So my colleague Coral went to the dead mall at Fifth and Market, and she was sending me some very amusing texts about what she was seeing or what she was not seeing.

It was just totally empty.

A few DoorDash drivers were coming in to pick up the fast food you mentioned, but other than that, there was just a few disappointed shoppers, kind of found their way there.

And then - Befuddled cruising, - Wait, where's the mall?

- Doing some power walking maybe.

I don't know.

- There were some teenage boys riding their bikes under the dome.

I mean, people were just, - Yeah, hanging out.

It's just a big empty space.

How about Stonestown?

- Oh, that was so much fun.

My six hours just flew by.

I kept sending her texts like, sorry, you're, you're stuck over there.

I just got served sushi by a robot, but we had a fun time and it was just packed and thriving and - Yeah.

- Yeah.

That's - Interesting.

Michael Berne, do you think those two malls sort of reflect broader trends and what's happening with malls these days?

- Well, San Francisco Centre unraveled in a hurry, even by the standards of declining in malls.

You know, malls in general can decline quickly, especially once one of the one or more of the anchor department stores shutter.

This one though was in record time.

I mean to consider that on the eve of the pandemic, it was still 9%, only 9% vacancy, which - Is considered healthy in the Yeah.

Generally as a rule of thumb, you'd say anything under 10% is healthy.

I mean, ideally you'd be at five or four, but you know, 9% was is is decent.

Yeah.

And it was a mall where brands would, would test new concepts.

It was a stalwart, and then very quickly it was not.

So it still kind of weird to my ears to hear it described as dead mall, even though yes, that's certainly what it is, but it, it really collapsed very quickly, even by mall standards.

- Kirthi, talk to us about some of the longer term trends that we've seen once that sort of crossed that pandemic boundary.

- So thank you for bringing this up.

There's, you know, we've been, every six months you get an article again from somebody talking about the death of the American Mall and you know, with wistful commentary about how people grew up there.

I wandered there at the child, my children are wandering this, you get all this commentary.

Yeah.

You also get this commentary about, again, about a ghost mall, something abandoned.

You know, like, people make it sound like the Chernobyl site.

You know, you're gonna go through the Ghost Mall today, right?

You get all these stories.

It's all interesting.

But I think fundamentally, if you step back, and I've been looking at retail for a very long time trying to understand it, and I, I still don't claim I understand it.

I'm trying to figure out what's going on.

It's very complicated.

But overall, if I look at the big picture, here's kind of my analysis of what I think is happening.

Two things.

One is retailing was always a business about two things.

You know, people think it's many more things, but it isn't.

It's only two things.

And increasingly the events of the last few years have shown us that the first, and in no particular order, the first is convenience.

You know, how easy, quick can I make a transaction or do something?

That's one big lever and one big lever in retail.

And convenience is the definition of convenience is, is not simple.

It's sometimes it's mostly psychological, but it's also economical.

Meaning how much time it takes for you to go somewhere.

Sure.

How much it costs you to get somewhere.

All of those factors become very critical.

- And what's number two?

Two.

The other.

Yeah, - There's no, there's one.

Number two.

The number two.

And it's, by the way, there's no order here.

It's - Yeah, yeah.

- You know, I'm just, you know, it's not like this is more important than that.

Right.

Just to be very clear.

The other one is, do you create an sensory experience?

And I want to use that word sensory very carefully because this is something I have also been learning a lot about.

You know, retailing originally, before all of the retailing phenomena in the US became discount store retailing.

Retailing was about appealing to all of your senses.

You know, your sense of sight, your sense of sound, your sense of smell, your sense of taste, your sense of touch.

So this idea that, that the sensory, even marketing people like maybe and others that like really have done a lot more work on this, we call it sensory marketing.

So either retailing is convenient, I really know what I want.

I just get it to me like this.

Okay.

And however we do that, we can, we can talk about that.

- Yeah, sure.

- Michael will, will give some idea maybe about the kind of mall locations that do still do a good job of that or, and then if that's not what you're doing, excite me from a sensory point of view in a way that online cannot.

Right.

That I think is kind of what we have evolved into in terms of the retail model.

But Perfect.

- Let, let's, let's, let's leave it there.

I want to bring in our listeners as well.

We wanna hear from you.

I mean, what Bay Area malls do you still shop at?

Why- is there something that's brought you back to a mall if you no longer go to the mall?

Why, why is that?

The number is (866) 733-6786.

That's (866) 733-6786.

You can email forum@kqed.org.

Find us on all the social media things.

Blue sky, Instagram, discord.

We are KQED Forum there as well.

Michael Berne.

I wanted to ask you about kinda the difference between the sort of Suburban and the Urban Mall.

- Yeah, thank you.

Thanks for asking a question.

'cause that was what, what, what's been on my mind?

You know, I, I think San Francisco Centre and Stonestown, it's a bit like comparing apples and oranges in the sense that yes, I would generally agree with that framework that in retail, you know, there's, there's convenience and there's experiential and, and, and that's, but, and with San Francisco Centre, you almost have a third typology in as much as, so, such a large percentage of its foot traffic, at least in pre pandemic times, was tourists.

- Hmm.

- And to some degree, a captive market.

I mean, they're here in San Francisco for lots of reasons.

Probably the mall wasn't what drove them here.

San Francisco has a lot more to offer than just San Francisco Mall, even and San Francisco Centre, even at its peak.

But it's - Not the Mall of America.

- No.

It's, it's, it's not the Mall of America.

Right.

But, and, and one of the, you know, you hear a lot of reasons why San Francisco Centre collapsed.

The two I hear most often are office workers, which I really think have very little to do with Union Square.

Union Square as a district, doesn't have much office space that's in the financial district.

And secondly, for lack of a better term, antisocial behavior.

Right.

But to me, I look at how far tourism fell in the, you know, in 2020, 2021, and continuing to this day, especially from Asia.

- Yeah.

- And, and, and, you know, and that's, that's a captive market we've lost.

- Yeah.

Yeah.

- And, and that's, and that's a killer where Stonestown is more of your traditional suburban mall, even though it's in the city Yeah.

With different drivers.

- Yeah.

I mean, Heather, did you grow up with the mall in the, in the sense that I did?

Like where you just, the mall was everything.

- Oh, yeah.

When you were describing it at the start of the show, I was thinking everyone went to Orange Julius.

- Yeah, Orange Julius.

That's right.

That's right, - And Claire's, everybody got their ears pierced at Claire's - Hot Topic for weird stuff.

Yeah.

I mean, it was, it is interesting that now you can get anything from anywhere on the internet.

And so that does seem to like, I dunno, it takes, my kids don't have that relationship with the mall in quite the same way.

- Right.

Stonestown has really, I think, solved this dilemma by doing a lot of the experiential stuff.

So when I was there that night, Round One, the arcade where Nordstrom used to be, when Nordstrom left the downtown mall, they never figured out what to put there.

And now those famous circular escalators that go up are just boarded up and nobody's on them.

And the whole upper part of the mall is completely empty - Its own kind of experience, I suppose.

- Yeah, yeah.

But at Stonestown you can- claw machines are huge, like rows and rows of claw machines where kids are trying to get stuffed animals.

And then there's bowling and billiards and karaoke and there's down at the other end, an escape room and the movie theater.

And just so much to do.

- I would also say, you know, I mean this is again, a type of mall that's like outside the norm, but like Japantown, whenever I go there, I'm like, this is just a mall.

You know, this is Well, but my kids have this super rich relationship with the Japantown Mall.

- Oh.

- And see it as like, the most fun place on earth.

And like, you know, they wanna go there for their birthday, they wanna go wander around that mall, you know?

- Yeah.

When I talked to Supervisor Myrna Melgar, who represents the district with Stonestown in it, she said, yeah, I celebrated my birthday at Stonestown this year.

It's like the place to be.

- Wow.

We're talking about the malls that Bay Area shoppers are still going to urban, suburban, all the different kind of typologies, how brick and mortar shopping is changing.

We're joined by Heather Knight, San Francisco Bureau chief of the New York Times, Michael Berne, president of MJB Consulting and Kirthi Kalyanam, who's a professor of marketing and executive director of the Retail Management Institute at Santa Clara University.

We're gonna get to a bunch of calls and comments when we get back from the break.

You know, what makes you wanna buy something at a mall in person instead of your now, you know, incredible number of options in other places.

And what about the mall where you live?

Not in San Francisco, but say in Walnut Creek or Corte Madera or down in San Jose?

You can give us a call.

8 6 6 7 3 3 6 7 8 6 of course forum@kqed.org.

And you can find us on social media, blue Sky, Instagram, discord.

We're KQED forum there as well.

I'm Alexis Madrigal.

Stay tuned.

Welcome back to Forum, Alexis Madrigal.

Here we are talking about Bay Area malls and the changes to them.

We've got the New York Times Heather Knight, consultant Michael Berne, and professor at Santa Clara University.

Kirthi Kalyanam.

Let's bring in Zoe in San Francisco.

Welcome.

- Hey, how you doing?

- Hey, good.

Thanks for calling.

- Yeah, so I, I've lived out in Oceanview, which is really close to Stonestown for over 20 years now.

And I'm there like probably a couple times a week.

And I think Stonestown is successful 'cause they've done a really good job pivoting from more of a retail sort of place where you go to buy stuff.

Like at Nordstrom's and Macy's used to be the anchor stores there, and it was replaced with Nordstrom was replaced with Target.

And they really catered it to the SFSU next door and also the neighborhood.

I go there to get stuff and the Macy's is now a Whole Foods and there's a Sports Basement and the movie theater.

So they replace it with things that people still need to go to or want to get in person.

So like Sports Basement, has rentals and things like that.

And of course, you know, groceries and there's also Trader Joe's there, so if you can't get it at one, you can go to the other.

And then they have a lot of, you know, shops like that.

You wanna get things in person.

And also entertainment, which is another, it's, it's more experiential than, than, you know, a retail thing.

And then there's also a really cool farmer's market every Sunday morning behind the mall that's, you know, really lively and busy and it's really great and there's a cool sense of community there.

And so they just kind of brought the community in in a lot of ways that, you know, outside of just, you know, experiencing things in the mall, but around the mall.

And it's a really cool farmer's market, so if you haven't gone, you should check it out.

- Yeah.

Farmer's Market at the mall does feel like a distinctly 21st century configuration of like things, you know, I mean, Kirthi is that, is that one of the ways that malls have survived is to kind of do things they traditionally didn't like there used to be grocery stores in a farmer's market at the mall.

At least any mall I went to.

- No, I think that's a really interesting, you know, as you can see from all of these comments, right?

We are in a stage of transition where we are trying a lot of different things and I don't think one size is gonna fit all.

It's gonna be very, very localized in terms of what's gonna happen and what's gonna work.

But I love the, the comments there because that category food, for example, is interesting because it totally fits two things that I care a lot about.

One is this whole sensory idea.

I don't know about all of you guys, but when I go into a grocery store, the, the sight of the fresh produce around the sides Sure.

The smell of the cheeseboard, all of that stuff is visually and every which way appealing to my senses.

We have a Trader Joe's not very far from where I am, and I could go there.

I literally go every day a little bit, pop in.

And it's, it's very convenient.

I don't need to go every day.

They actually, we are worried about me.

I was out of town for a week and they were like, where were you?

- Yeah, right.

There's - Right, - The snacks are not gonna eat themselves, you know?

Yeah.

- They're not, and it's that sensory experience that is really exciting.

Yeah.

The other thing about food is that it's also in general frequency based, it's higher frequency than other categories.

- Yep.

- So if you, if you really check those three boxes, high frequency where you can also make it convenient and then you have a sensory experience, now you're talking something.

- Yeah.

- But that may not work everywhere, right?

Yeah.

I mean, someone like Michael, who's seen a lot of malls development consultants, Heather was walking through malls would say, Hey, this is not gonna work here, it's gonna work here.

And so on.

So as I said, it's gonna be a lot of variability in what's gonna work.

Yeah.

But this certainly checks the boxes in an interesting way.

- For sure.

Yeah.

- Right.

And I don't know about you guys, but I go to my local Saratoga farmer to market, that is one sensory experience.

They let you, everybody lets you touch everything.

Sample everything.

Yeah.

So it's quite amazing.

- Yeah.

Talk to me, Michael, about these types of properties, you know, your Broadway Plaza and Walnut Creek, the Village at Corte Madera.

These seem different, different than the classic mall that I went to, and also a little bit different from the ones we've been talking about so far.

- Yeah.

Well, for one thing, a number of them are open air.

If, if you, if you look at, you know, the Class A malls in the Bay Area, the majority of 'em are open air.

You know, you, you tend to think of Broadway Plaza, you think of Stanford Shopping Center, you think, you think of Village of Corte Madera, you also think of Valley Fair, which is to some degree an outlier in that it's, it's enclosed, although Santana Rows across the street.

So they're different in that respect.

You know, I, I think that what's what I think Stonestown has gotten right also, and I, and I I completely agree with the, with the, with the point you made about sensory and grocery in particular.

I think what they also got right, is that unlike a lot of other mall redevelopments that I have been seeing, they kept the critical mass of retail space.

I see a lot of these redevelopments where they are just trying to throw everything against a wall and see what sticks.

And as from a performer perspective, that can work, but the synergies just aren't there.

Huh.

You know, I was working in Center City, Philadelphia, they have a, a mall from the eighties there.

It's long called the Galleria.

Right before the Pandemic.

I think Macerich had a hand in redeveloping it in a very interesting way.

They basically turned it into an outlet mall, you know, and, and, and, and the market worked for that.

I'm not saying that would work for San Francisco Centre.

And then along came the Philadelphia 76ers who were engaged in a, in a battle with, with Comcast that owned the arena in which they play.

And the, the Sevety-Sixers wanted their own arena.

Right.

And so they said, we'll take a third of this mall, demolish it and put our arena right on Market Street in San Jose, Philadelphia.

There's not much synergy there who's going to a basketball game and shopping beforehand.

Yeah, yeah.

Maybe they're either you - Don't have any money left after a basketball - Game.

Right.

Exactly.

- Yeah.

- So, you know, it just didn't hang together.

The cohesiveness wasn't there.

Whereas Stonestown, they kept a certain critical mass of retail.

When I say retail, I mean shopping, but also food, entertainment, grocery.

And, and that I think is part of why it still makes sense.

It's still legible to the consumer Yeah.

As to what it is and what it's not.

- Alright.

We've got Erin Byrne, vice President of Leasing for Macerich Company.

Welcome.

- Thank you.

Yes.

How you doing?

- Doing well.

Doing well.

So talk to me a little bit about what's different to you as someone who's leasing out these spaces, spaces at malls today, rather than in the past.

- Well, I think the leasing momentum is just so strong in the shopping centers today, and especially like Michael had alluded to these open air centers.

So I'm responsible for Broadway Plaza and Village at Corte Madera.

And both of them really kind of operate as the town center, so to speak.

Really community oriented and just the breadth and depth of uses that we've been able to bring into the shopping center over the past several years has changed tremendously.

So, you know, anybody who's been to Broadway Plaza realizes it's downtown Walnut Creek.

So we're surrounded by - Right.

Residential and office, you know, and we've even brought office uses into our center.

So think like coworking with Industrious or think, you know, converting a former department store to a Lifetime Fitness, Pin Stripes, which is entertainment oriented.

And of course we just opened Original Joe's in Walnut Creek, bringing that super iconic restaurant to the East Bay.

- Heather Knight.

How would you feel about co-working or working out in the mall - New bureau for the New York Times at Stonestown?

- I know, no.

San Francisco City Center, obviously.

Yeah.

That's where you'd have to be working.

- That would be pretty lonely.

- Yeah.

I mean, I guess it's interesting, right?

There have always been both the official uses of the mall, right?

The, the retailing stuff and the food and everything.

And then there were the unofficial uses, right?

The walking in the mall to get your steps in, and the kids, of course hanging out and doing all the things that, that teens do.

I wanna bring in Peggy in Mountain View, who wants to talk about teen-dom in the Mall?

Welcome.

- Yes.

Hi.

Thanks for taking my call.

Yeah.

I'm a child of the eighties, so I grew up with, you know, the Valley girl in the Galleria down in Southern Cal and Fast Times at Ridgemont High, which had a few scenes of mall.

And so I, I, I think there's still an opportunity for pre teenagers and teenagers to really embrace the mall.

I think Valley Fair, most of the, a lot of those stores are really expensive.

So it's not within a teenage budget and beyond that arcade experience for the younger kids, you know, what, what can malls offer?

What kind of interactive, you know, maker space or design or collaboration can malls create for teenagers and, and pre teenagers.

I think that might help a lot to kind of draw and, and pull in more of the younger generation.

- Yeah.

Heather, did you wanna say something?

- I was just gonna say, when I was talking to folks at Stonestown about why they prefer that mall versus the downtown one, a lot of people said that we can actually afford to be here.

You know, there's things that we can afford to buy.

There's a real association, at least with the previous, when it was alive, the mall downtown was thought of as very luxurious.

You know, you rode those escalators up to Nordstrom and the shoes were very expensive and there was someone playing the grand piano, and it, it just felt very like, out of this world for teenagers, I think.

So I think Stonestown has really hit that sweet spot of things that people can afford to buy and do.

Yeah.

- I mean, Erin Byrne, I've always wondered this, do you want teenagers at the mall?

- We do want teenagers at the wall, at the mall for sure.

I mean, they have tremendous spending power.

We have plenty of stores that are geared toward them.

You know, you take Village at Corte Madera.

We opened a handful of stores last year that I think really appealed to the teenage community.

You know, ALO, Aritzia, we just opened Abercrombie and Fitch, Mango is coming soon.

So we definitely want them in the center.

We value them.

They're a really important component to us.

And they, you know, they are gonna grow up with the mall and they'll, they'll be with us through their adulthood as well.

- Yeah.

Before we let you go, I just wanna know if there's a, a certain kinds of tenant you're seeing new people moving into malls that kind of hadn't been there before and that you are excited about.

- Oh yeah.

I mean, there's so much going on in the, you know, new uses where we just think like entertainment is coming.

I mean, it's, we hadn't seen tenants like Pin Strikes Open.

We have that in Walnut Creek.

We're excited about the medical the office uses, you know, even just going this mixed use route with residential hotel.

We're excited about the office use that I talked about earlier.

It brings that daytime, you know, customer to the center that supports all the uses there.

Fitness is another one that we're excited about.

So it can be anything from the large fitness tenants like Lifetime to even some of the small boutique ones that you see popping up, like solid core, F 45 or various boot camps.

So just the, you know, the breadth and depth of uses that we can bring to the center just increases the reasons to come to the shopping center and gives our customers so many more choices for what's there and allows them to spend more time in the center, which is what we want them to do.

Yeah.

- Erin Byrne, vice president of Leasing for Macerich Company, which has a big real estate portfolio, including tons of retail centers.

Thanks so much for joining us.

- Thank you.

Bye.

- Michael Berne, I was curious, I feel like I might have the wrong history of the mall in my head.

Like, when is, when was the peak, when was the heyday of the mall?

- Well, I, I would say the heyday was probably the, the fifties to the eighties.

I mean, I I too, like the last caller, I'm, I'm Gen X and I had my mall growing up, the Galleria Mall in in, in White Plains, New York.

May she rest in peace.

And it was really the late eighties, early nineties when the momentum stopped.

And some of that is because there was a whole series of leveraged buyouts of department stores in the early nineties engineered by a Canadian real estate developer who didn't really have much of a handle on retail.

And that ended spectacularly badly.

And the department store in sector has not really been the same - Since.

Huh.

- And, and in as much as that is kind of the anchor of, of everything with the mall, the business model for that matter, their decline has, you know, has really, has really changed the dynamics.

So yeah.

But the peak fifties to eighties, I would say.

- I mean, Kirthi, so I guess it's not just the internet.

I mean, what I had in my head was that they were doing just fine and then the internet came along.

And in particular, your kind of Amazon's and your walmart.com and just kind of swept away a lot of the retail.

- No, I think it's a very good observation.

It's, it's not, it's easy to pin everything on the internet, but I think Michael's point's a good one.

If you dig just a little deeper, the department stores lost their mojo long before the internet came along.

- Yeah.

- Long before.

So if you look at what drove that primarily was that lots of people who were, you know, retailers or retail, the department store model was very sensory by the way, - When - You went in, it appealed all your senses.

You know, they had food, they had a very good restaurant, which never made money.

Most of the Good Department stores would make you that one.

And it drew people in.

The two things happened to the department store business.

One is they started very heavily leaning into, let me look at my products and create a profitability model around it.

And they lost sight of which product categories matter to my customer.

And if I, if I'm not in those categories, it's not gonna come in.

They lost sight of that.

So, for example, you may not make much money off the of the restaurants, but if that's a really important draw for your customers to come in, you really need to think about it.

So I think that they lost their mojo around that.

Hmm.

Very, very big issue early on.

The other thing that happened was what I call the verticalization of experiences, which continues to this day where the department store tried to sell you a category and would put in multiple brands within that category, but it started getting very cluttered.

So you couldn't really merchandise it very well.

And, you know, Polo Ralph Lauren would have their own little, little store within the department store, But it really, it wasn't be able to recreate the magic.

And what people suddenly realized was if you create something called a specialty retailer, which is take that category out of the department store and create this incredibly interesting, and if you will, stimulating experience into a small specialty store, that would make a big difference, that would work better and, and that, that worked better.

Right.

So we have lots of examples, you know, of this, the Limited From Limited did a great job with multiple, multiple touch formats, including, you know, Abercrombie and Fitch and Victoria Secret.

These are all, like, if you look at it in the old days, these were the sensory marketing engines.

- Yeah, yeah.

- You went into the mall because you know that these specialty formats had something exciting going on in them.

There was new merchandise.

All that excitement came that started pulling away to Michael's point away from the mall as an anchor point of the store.

- Yeah.

- And as you start, once you get into that situation where you're not able to create that sensory experience, your growth stalls.

And when your growth stalls pretty quickly, you have all these leverage buy out, buy out, and you start circling the drain.

And if the, if the department store is a big anchor tenant of the mall and they're starting to circle the drain and not do very well, it starts dragging everybody down.

Yeah.

So it's, I think this started happening way before the com stores and department stores declined way before the internet came along.

- When I started thinking about this, because it, it happened in my childhood in the nineties that there'd usually be like the Good Mall and then another mall kind of nearby that we called the Dirt Mall.

And I think everybody had the Dirt mall, you know, and you just, you'd go over there and there'd be like a Kmart and like a bunch of empty things and you'd be like, oh, the Dirt Mall.

And for us it was up by Janssen Beach and, you know, north of Portland, Oregon as opposed to, yeah, we had the downtown kind of Lloyd Center.

We had like big suburban malls and then there was, there was the Dirt mall.

We are talking about the malls that Bay Area shoppers are still going to, dirt and otherwise, how brick mortar, brick and mortar shopping has changed over time.

We've got Kirthi Kalyanam, who is a professor of marketing and executive director of the Retail Management Institute at Santa Clara University.

Michael Berne, president of MJB Consulting retail Focus firm, and the New York Times, San Francisco Bureau Chief Heather Knight, who has written a great story called "A Day at Two San Francisco Malls, One That Died and One That Thrived."

We're taking your calls, we're taking your comments about what brings you to the mall, how you're thinking about retail shopping these days.

The number is 8 6 6 7 3 3 6 7 8 6 forum@kqed.org.

We'll be back with more right after the break.

Welcome back to Forum.

I'm Alexis Madrigal.

We are talking about the mall.

The mall as we knew them, the malls as they may become.

We've got Kirthi Kalyanam, who is a professor of marketing and executive director, the Retail Management Institute at Santa Clara University.

We've got Heather Knight, San Francisco Bureau Chief of the New York Times, and we've got Michael Berne, president of MJB Consulting, a retail focused firm.

Earlier, you may have heard Erin Byrne as well.

Vice President of Leasing for Me Ridge Company, which owns a couple of malls here in the area.

Broadway Plaza in Walnut Creek, and the Village at Corte Madera.

Heather Knight, one thing that I, I think a lot of people can't help notice about a place like Stonestown is that much of the space is now dedicated to sort of like Asian retailing and food, right?

I mean, that seems to be like kind of the core of what's happening at Stonestown.

- Yeah.

Stonestown is really intentionally catering to the neighborhood around it, which as the west side of San Francisco is very many Asian American families.

But these sorts of stores and restaurants are really popular with everybody these days.

So you have like the pop mart and the Labubu doll, - Labubus, the bane of my current existence.

- I was trying to report in there and I was like pushing myself through customers.

Would you talk to me?

It's just packed on a Friday night.

And then you have the sushi and the Tang bar, the hot, hot pot soup that you make yourself and matcha and boba and all sorts of things that people just love.

All sorts of people.

- Boy Stonestown has some real partisans here.

Rebecca in San Francisco.

Welcome.

- Oh, thank you.

Thanks for having me.

Yeah, I just wanted to make the comment.

I have a 13-year-old daughter and a 16-year-old son.

And I really, I mean, Stonestown, I think part of its key to success has been the teenagers.

I mean, you've got Washington High School, you've got Lowell, you've got S.I.

And I mean, I think we need to make, we have to save the malls for our youth.

I mean, this is - A key.

Is this our millennial nostalgia?

Millennial Gen X nostalgia.

- Yeah.

No, but like, does this generation, like they actually still love the mall.

My son will go to the mall.

They, you know what Stonestown did?

They have a secondhand store.

It's called Second Street.

And of - Course Japanese - Is really, it's a really popular with, with today's youth.

And some of them are like fashion, you know, conscious as far as how fashion is made.

And so Thrifting is like really big.

- Yes.

- But he'll go like every day after school just to check it out and see if there's anything cool there.

It's totally affordable.

It's not a bougie thrift store - Wow.

Store.

- And then I just feel like, and my 13-year-old, like she loves going to the mall, hanging out with her friends.

It's like a thing.

Right.

And I, I'm always afraid, like, what happens if the malls go away?

It's a, it's like a healthy positive, like social activity for these children.

We have to save them all people.

I - Love that.

Like, the internet is so bad for parents.

Screens are so bad that we're like, oh, thank God they're going to the mall.

You know, like finally my children are, are going to the mall.

My parents, people.

Yeah.

No, that is not, they're just, yeah.

They're just like, oh, can you just go get into trouble with your friends at the mall?

Rebecca, I have one question before you, before I let you go.

Have you shown them the movie Mall Rats yet?

Mm.

Might not be appropriate for your 13 years.

- No.

- Oh, I, - Okay, I'll check it out.

No way.

- I'm not gonna issue a strong recommendation here for reasons that will become clear after you watch the movie, but I think it's worth screening yourself and then deciding if that's appropriate for your children.

Yeah, - I'll do that.

- I'll do that.

Yes.

Thank you Rebecca.

Appreciate it.

On a more serious note, we have Darren in San Francisco, who I believe is the senior GM at Stonestown.

Welcome Darren.

- Good morning.

- Just, I mean, how intentional has this been at Stonestown to bring together the particular mix of things?

Or was it more like you tried one thing, it kind of worked, try another thing, it kind of worked, try another thing, it kind of works.

Or did you have a vision from the beginning of like, we're gonna transform Stonestown into this place, which has some clearly huge fans in the audience here?

- Right.

Well first of all, thank you to everyone.

I just, I'm a, I'm a a listener in the morning and happen to be listening today and, and heard Stonestown called out.

And so appreciate Heather's article and all these great comments.

But certainly it's, it, it's really, it's a, it's a great team effort with, with Brookfield.

We have a, just an amazing leasing team on both the, the retail and the food side.

And I would say it's been a very strategic effort just to curate a mix of the right food, the entertainment and the retail that has generating all these wonderful comments that we are very pleased to hear.

So we're- How about this?

- We're glad to hear it's worked.

- This, lemme ask you this.

Is there something you've tried there that even at Stonestown hasn't worked?

- Oh goodness.

Let me think.

You know, I guess there have, there there's always, but there, there have been some, a lot, some tenants do come in on a short term, on a popup basis, which is a good way for them to try out their concepts.

But, you know, most recently, I guess it's unfortunate, I can't really think of anything that has not worked because we've really, again, now we really know our mar you know, we know the market, what works here at the property.

And so we've really just focused on bringing what, what, what the community is asking for.

- That's cool.

Darren, thank you so much.

Thanks for calling in and you know, on behalf of these listeners, thanks for Stonestown.

Appreciate it.

I do wanna talk about something that I've long, long been interested in, which is both in urban and suburban context.

Like what do you do with an empty mall?

What do you do?

- Nobody knows, at least nobody at City Hall.

- Yeah.

Yeah.

I mean, do you bulldoze it and then you've got a big hole in the middle of the city until something happens.

Do you try and do what happened?

You know, at the Eastmont Mall where it's got social services, it's got a police station in it, it's got other things like that.

- Mayor London Breed wanted to turn the dead mall at fifth and market into a soccer stadium.

And there were some architects drawing up plans for that, but she's not the mayor anymore.

And I asked Daniel Lurie what his plans were, the soccer stadium's off the table, but he doesn't seem to have a replacement idea yet.

So - What if you were Mayor Heather, what would, what would you do?

- Labubus is everywhere.

- Exactly.

Flagship 100,000 square foot PopMart.

That's the way to do it.

Yeah.

Mike, what, what do we have, do we have examples from across the country that - Yeah, I mean, you know, I think that this is a somewhat unique situation, San Francisco Centre because not only is it smack dab in the middle of the city and of the tour and smack dab in the middle of the tourist experience, it's rapid unraveling and kind of high profile.

Especially since the unraveling for various - Reasons.

Yeah.

- It's, it's resuscitation is going to be much more symbolic - Hmm.

- As kind of the reintroduction of San Francisco to the world.

Right.

And so it's, it can't just be something ordinary, you know, a lot of people have been talking about, well Union Square needs to become a residential neighborhood.

And while I wasn't really all that, all that excited about a soccer stadium there, I do commend Rodney Fong with the Chamber for really making the argument that this is very much a visitor experience - And that's what you have to drive, - You know, rather than turning into a residential neighborhood.

Because frankly, if someone's coming from around the world to San Francisco and they come and they see this brand new, beautiful mixed use building that all the planners are in love with.

'cause it's got residential above and it's got ground floor retail and you know, it's got the bike room and everything, and yet the ground floor spaces are filled with a boutique fitness studio with, you know, with a cafe, which you can find in 80 other places across San Francisco.

That's not gonna get anyone excited as a visitor.

Yeah.

And that's not gonna say anything about San Francisco.

Right.

So I think we really have to keep in mind this needs to be a splash.

This, and, and I understand how difficult that's gonna be, if not impossible, but this needs to be - A splash.

I think we figured it out.

Labubus were the answer.

No, I mean, just, - Well if you take another example like Hudson Yards in New York City where they had the opportunity to really say we're New York, we're ahead of the curve.

They pretty much did something that's in my mind pretty ordinary this point.

Yeah.

And so they, they blew it.

- Lemme just run through some comments here.

Lots of people with things to say.

Mike writes Northgate Mall, an indoor mall in San Rafael is virtually dead.

The community recently rejected a proposal for a Costco, which would've brought a lot of traffic.

There are plans to build housing similar to Santana Row and the upcoming Stonestown remodel.

But those plans got thrown into question when the last expected anchor tenant, the movie theaters closed expectedly.

Sarah writes, as a San Francisco resident, I do frequent Stonestown for errands, but for actual mall like shopping, we go to Hillsdale Mall in San Mateo.

This has more of a traditional mall experience, specifically for clothes shopping with my teenager.

Hillsdale also feels more attainable for a middle class family compared with the elite, dare I say snobby feeling at Corte Madera or Stanford.

Stonestown Indoor Mall is super sensory overloading for me.

Bright lights, loud echoy sounds, feels chaotic.

A listener on Discord writes, free space for young persons to inhabit and freely exist in public is increasingly restricted.

But these spaces are important for socialization.

And while it may be challenging to maintain them in the cell phone era, if malls were targeted more at populations that could use them, they might find a lot of value in that as opposed to shoving a bunch of big box stores next to expensive boutiques.

Let's go to Divya in Fremont.

Welcome.

- Hi, how are you?

- Hey, good.

Thanks for calling.

- Hi.

I was listening and I wanted to just point out that in the East Bay we really don't have too many choices and malls with the new Park mall in Newark declining over the years.

And I was wondering if the model of like Valley Fair Mall in Santa Clara is what works, why something like that cannot be established here?

Okay.

I'm sure there are a lot of parents in Fremont who would agree.

We are having to drive our teenagers down to Santa Clara on weekends, so it's a long commute.

And then the only other place, which is Great Mall and Milpitas doesn't quite have the Valley Fair vibe, I'm told.

So yeah, we, we parents would, you know, really appreciate if there's a cooler mall in in the neighborhood.

- Yeah.

Divya is such a, such a good and interesting point.

I mean the East Bay is a, is such a fascinating place for this retail in my mind because, you know, we have Walnut Creek, but that's sort of quite north of Divya.

Then we have, I guess Bay Street sort of is the mall.

- Sun Valley.

- Sun Valley, right out, out further - Southland.

- Yeah.

But there isn't one of those in kind of the inner East Bay between Yeah.

Fremont and Oakland.

There really isn't that kind of premier mall like there is in some of the other places.

Yeah, - I mean there was, you know, it was Bay Fair, which is pretty much no more as a mall.

There was South, there's Southland and then, you know, in Newport Park, I think what you're seeing also, I mean, you know, it's not that malls are going away, it's that the number we can sustain has shrunk.

Hmm.

- And so retailers have choices, right?

Okay, this is a market where I need four stores, so I'm gonna put 'em in, in, in these four malls.

Right?

Well now maybe that four is two and they're gonna say, okay, I'm gonna close two and I'm gonna keep two open.

And there's gonna, there's a, there's what's called a, a flight to quality and all that.

They, they, they, they keep the stores open at the A malls and they close the ones at the C malls and the B ones, you know, some of them Yes.

Some of them.

No.

- Hmm.

- And so that's what you've been seeing.

You've been seeing a winnowing, it used to be that you could say one mall per 250,000 people.

Right.

So if you had a metro area of 3 million people, you have 12 malls right Now that's more like one out of one, you know, 500, 600,000 people for, for every one mall.

Hmm.

So, you know, there's gonna be, there's - Yeah, there's consolidation of these - And that's what we've been seeing in East Bay in, in every part of the region.

- Yeah.

- If the, - Oh yeah, go ahead.

So - Alex, Alex is, the other comment about that is I think if you're going to look for the national retail chains to come up with solutions for this, we are not gonna find them.

And there's, that's not gonna happen.

I'm just gonna tell you right now, okay.

We can beat around the bush, it's not gonna happen.

Their idea is to build replicable cookie cutter kind of experiences.

And, but, but here's why that's not gonna work.

The amount of space that is really available, which can sustain those experiences shrunk, number one.

- Number Two, as we are talking about today, what's really lacking is local experiences that are culturally relevant to the population living in that vicinity and in all of this combination, right, we are talking about how we're gonna redo San Francisco.

And you know, I, I wrote emails to every mayor suggesting that, Hey, as at executive director of the Retail Management Institute, one thing you should do is do a study of who is the population living around this area?

What are the shopping needs and what are the just not shopping needs?

What are the community needs like?

And given the Internet's come along, how has that shifted?

And let's not forget there are still a lot of unserved needs that they have.

Right.

And let's figure out what those are and then reimagine these spaces.

And I think that needs to happen.

And if you look at those unserved needs, I think they're very local, they're very culturally relevant, they're very heterogeneous.

So it's not gonna be this cookie cutter, you know, Divya called us from Fremont and I, I know that area pretty well.

What she probably needs in that area, close by to her is not what you're gonna need around Cupertino.

- Right.

- You know, and then there's space for both of them.

It's smaller, it's local, it's more culturally relevant.

- Hmm.

And - That's the challenge for all of us is the, the large scale mall, the large scale retailers will not be ever be able to create that scalable model.

It's much more complicated than that.

- Yeah.

Yeah.

So - I think it's just something to, something to keep in mind.

- Yeah.

Super interesting.

Vincent on Blue Sky writes in: another reason San Francisco Centre is failing is that it doesn't have free parking.

Most other malls have free parking.

I do have a remedy, a casino, different venues, music events, restaurants, art exhibits, and three hour free parking at the Mission Street garage.

What do you think as a consultant?

- Well, I, I I, I mean, casinos are a whole nother, whole nother Alexis Madrigal session.

I think, you know, parking, you know, certainly if, if, if your frame of reference is other malls which have free parking, then that could be a, a deterrent.

I tend not to think it's, it's a deal breaker in this context, because again, a lot of the demand historically has been captive.

- Yeah.

- You know, they not, they don't even have cars.

- Yeah.

- They're, you know, they're, they're staying in hotels plus, you know, you can get some regional trade through the BART that's running underneath Market Street and parking is very expensive.

And for the numbers of any sort of redevelopment to pencil, you know, that's going to make it that much more challenging.

So I, I think, I think that the stonestown charge, - It's free, but I learned they have something like 3,800 or 3,600 parking spaces and it's still really hard to find one.

Yeah.

- It's crazy.

- Wow.

And that doesn't stop people from going either.

Yeah, yeah.

Yeah.

So that's, you know, so if it's - Hot Santana Row close to me is charging for parking.

- Yeah.

- They give you a couple of hours.

It's all video based, you drive in and then when you go out vehicle two hours, you had to pay with a credit card.

- Hmm.

- And so they do charge for parking even there.

- Yeah.

Such an interesting set of, of things across the barrier.

'cause it, it, as, I think Kirthi is alluding to, there is this big tidal motion right.

In retail, but every individual location does have its own set of things with San Francisco Centre probably being like the strangest components.

Right.

I mean, it's hard to imagine at, at this point that it could be anything.

Right.

I mean, I don't know.

What do you think, Heather?

Like if you had to guess in 10 years, is it just sitting there like that?

- I hope not.

It seems like it's gonna be hard to fill the space as is.

I think it'll be redeveloped into something completely different, but I I hope they preserve that historic dome.

- Yes, me too.

Me too.

We have been talking about Bay Area malls this morning, where they're going, how they're working, the ones that aren't working.

We've been joined by Heather Knight, San Francisco Bureau Chief for the New York Times.

She co-authored the story "A Day at Two San Francisco Malls, One That Died And One That Thrived."

Thanks for joining us Heather.

- Thanks so much.

- We've been joined by Kirthi Kalyanam, who is a professor of marketing and executive director of the Retail Management Institute at Santa Clara University.

Thank you.

- Thank you.

- And we've been joined by Michael Berne, president of MJB Consulting, a retail focused firm.

Thanks for joining us, Michael.

- Thanks.

I've really enjoyed it.

- Thank you so much to all of our callers and listeners for your nostalgia.

Go get that Orange Julius, we're gonna keep covering the mall saga.

We so appreciate hearing from you.

Keep an eye out too for this episode to show up on our KQED News YouTube channel.

I'm Alexis Madrigal.

Stay tuned for another hour of Forum ahead with Mina Kim.