SALT LAKE CITY — Sometimes, shopping malls just don’t work out. America made sure of that.
“We were desperately, desperately over-malled in this country,” said Amanda Nicholson, a Syracuse University professor who studies retail, during a recent interview with the Deseret News. “We have way too much retail space — always have — more than any other country in the world, by a long shot. We kind of created our own scenario for failure.”
The reasons for that failure are many: generous tax incentives for developers, greed, disregard for demographics, the rise of online commerce and much more. And for the past few decades, American malls have faced their reckoning as hundreds have become enormous, abandoned relics of our capitalist heritage.
The Gateway, Salt Lake’s outdoor shopping mall on downtown’s west side, nearly became one of them.
“This place was a ghost town. People didn’t want to come down here,” said Joshua Warner, a manager at La Barba Coffee, which sits beneath a huge LED-lit tower on the Gateway’s north end.
Warner has lived nearby, in the Gateway’s residential space, since 2016, and recalls homeless people from the nearby shelter regularly camping out on the apartments’ front lawns. Sales at the Gateway began plummeting in 2011, after City Creek Center, the billion-dollar shopping mall owned by The Church of Jesus Christ of Latter-day Saints, opened up just a few blocks east. Crime around the Gateway began rising as the downtown homeless shelter became a hotspot for drug dealing.
But money is a powerful thing. Vestar, an Arizona-based company which owns more than 50 retail spaces throughout the western United States, bought the Gateway in 2016. The company is in the midst of a reported $100 million upgrade to the beleaguered mall.
Those upgrades are becoming more and more apparent. As Warner talks inside La Barba, employees from Recursion, a pharmaceutical company now housed in what used to be a Dick’s Sporting Goods, walk by on their way to lunch. Numerous construction workers enter and exit an old Barnes & Noble, which is being converted to a dining/arcade/karaoke/events space. About a dozen swimsuit-clad children play in the nearby fountain.
Collectively, it’s not the madhouse that City Creek Center becomes on most afternoons. But it’s also decidedly not a ghost town, either. For the Gateway, that’s progress.
Then there’s the art, which has become one of the most noticeable components of the Gateway’s revamping. Stairways, store windows and other previously blank spaces have become canvases for numerous commissioned artists. The Utah Jazz’s star shooting guard, Donovan Mitchell, has his likeness painted in bright colors across one of the Gateway's pedestrian bridges. Other art additions are smaller, like rainbow-colored stairs and glowing seesaws. Outside La Barba’s windows you can see a two-story mural completed weeks earlier by Havoc Hendricks, a local artist. Next to the mural is “Love Letters,” a 16,000 square-foot temporary art exhibit. Just south of “Love Letters” is “Dreamscapes,” another large pop-up art space. Then there’s the Urban Arts Gallery, which has been at the Gateway since 2013.
With all the real estate that visual art now occupies at the Gateway, the actual reported amount going to visual art is surprising — because of how little it is. Jacklyn Briggs, Vestar’s marketing director, said only 1% of Vestar’s $100 million redevelopment has been earmarked for art specifically. Walking around the Gateway, its commitment to visual art belies those figures.
Historically, visual art hasn’t been a money-maker or a priority for America’s shopping malls. But if the Gateway is any indication, art could play a major role in how these malls save themselves.
“Hot new fits = hot new fitting-room selfies.”
Writer Ian Bogost noticed the sign outside the Madewell store at his local mall. In an essay for the Atlantic titled “When Malls Saved the Suburbs From Despair,” Bogost details how the economy of material goods that has long defined malls — and defined so much of modern western society — is giving way to something else: the information economy.
“Buying is now optional,” Bogost writes. “It’s sufficient to simulate a purchase in order to create an image of its concept, for exchange in the marketplace of ideas.”
That transition is evident at the Gateway, albeit more overtly. The mall has attracted artists and art patrons through events like the recent Chalk Art Festival, as well as the LetterWest conference, which brought in lettering artists from all over the world. Hendricks, the Gateway’s newest muralist, said he thinks this mall could become like Brooklyn’s Bushwick neighborhood in New York, known for its wealth of murals.
“As a tourist, that’s appealing,” Hendricks said. “You can go to one place, one neighborhood, one block, one street, and you can see five, 10, 15 amazing pieces.”
The mall’s two pop-up exhibits, “Dreamscapes” and “Love Letters,” seem designed specifically with Instagram in mind. While a fitting room selfie doesn’t cost a dime, these pop-up exhibits do. The price of admission at “Dreamscapes” is $15. At “Love Letters” it’s $12-$16.50. John Connors, who co-developed “Love Letters” with artists Becca and Josh Clason, said they’re expecting 15,000-20,000 visitors at “Love Letters” this summer.
“Combining authentic, meaningful art with a paid customer experience is where I think the Gateway is gravitating,” Connors said.
The Gateway has also prioritized art through how it leases its spaces. When Connors and his creative partners began planning these enormous pop-up exhibits, he said they struggled to secure a lease that would last only a few months — “Malls were used to five-year leases and 10-year leases,” he explained, “and to create favorable financial terms for both of us, within that industry of mall retail and real estate, that was pretty creative thinking on their part.”
Scott Tuckfield, who helps run the Urban Arts Gallery, said the Gateway’s management has scaled the lease for the gallery and its adjacent “Dreamscapes” exhibit to fit the gallery’s financial needs.
“The deals that were worked out between our executive director and the Gateway management have been complete game-changers for us,” Tuckfield explained. “We couldn’t have done what we’ve done without it. And it’s not complete charity, either. I think they have a sense of the long-term investment of it. They let us do our work in the short term, (and) it’s going to make more of an attraction for people to come out, and it’ll just bring more life and support back to them in the long run.”
For shopping malls, this preferential treatment is nothing new. They just hadn’t granted it to art spaces until now. And to understand why, it helps to understand mall psychology.
According to professor Amanda Nicholson, mall owners always gave more favorable terms to its “anchors” — the big department stores that buoyed a mall’s foot traffic. Be it Macy’s or Dillard’s or any other department store giant, mall owners basically gave these stores a free build-out, “which was worth millions of dollars,” Nicholson explained. As the logic went, if you build it — “it” being a JCPenney — they will come.
“The point of a mall — the reason so many stores are clustered together in one building — is to allow smaller, less powerful retailers to share in that traffic,” Malcolm Gladwell explained in his 2004 New Yorker piece “The Terrazzo Jungle.” “A shopping center is an exercise in cooperative capitalism.”
That cooperative capitalism has typically played out a bit different for outdoor malls like the Gateway. These outdoor malls began showing up during the 1990s (the Gateway opened in 2001) dovetailing with the rise of online retail and the corresponding decline of department stores. As such, outdoor malls haven’t typically relied on the same kinds of attractions as that of their forebears. According to a recent study by the location data company Foursquare, a huge arcade like Dave & Busters statistically correlates with significantly more foot traffic. Same goes for movie theaters. The Gateway has both.
Yes, the Gateway is just blocks away from Salt Lake’s other thriving mall, City Creek Center — and conventional wisdom might suggest such close proximity is an issue, as it often is in certain markets — but downtown Salt Lake’s mall history has nearly always been a two-party system. The new City Creek Center sits on a plot once occupied by two different malls — the ZCMI Center and Crossroads Plaza, respectively. The ZCMI mall opened in 1975, and was so successful that Crossroads was erected right across the street in 1978. This was Salt Lake’s mall ecosystem for decades: two different malls thriving, literally side by side.
A place like the Gateway, in a city like Salt Lake, with a $100 million buy-in like Vestar’s, is perhaps better suited to pull itself out of the doldrums than other old school malls. For years, the Gateway’s demise was treated like a foregone conclusion, at least locally. Maybe that was never really the case.
Safety in numbers
For all its progress, the Gateway isn’t out of the woods just yet.
Much of the space is still an active construction site. A “gourmet local specialty market,” simply called the Store, is being built between the mall’s north and south ends. This middle space is still mostly vacant; the robust north and south ends kind of feel like separate malls. As I walk through this dead space on a recent afternoon, vagrants still pop up occasionally. One asks me for money, the other for a cigarette. Security guards in bright yellow vests patrol the property, as they have since 2016, when Vestar hired the security firm Trident Security to monitor the area. Trident has reported a 79 percent crime drop at the Gateway from 2015-2018.
Their presence is felt: As I stop to look at the grocery market in progress, a security guard silently walks over to me, and stands there without saying a word.
Last August, Vestar announced plans to build an eight-story luxury hotel at the Gateway’s historic Union Pacific Depot — a former railroad station that was completed in 1909. These plans show a hotel with up to 225 rooms and 26 suites, an exterior courtyard, restaurants and a ballroom. The hotel’s actual design has caused some raised eyebrows locally — the chairman of the Downtown Community Council said “It feels like a 1970s building in Berlin” — and downtown Salt Lake already has one enormous luxury hotel, the Grand America, which has nearly 800 guest rooms. So there are obstacles. According to Nicholson, though, the Gateway’s hotel “goes perfectly with this art idea. By definition, a boutique hotel sounds like you’re trying to attract fairly high-income people.”
If the Gateway executes this well, she added, the hotel will house tenants who will not only engage with the mall’s murals and other “free art,” but possibly purchase pieces from the mall’s art spaces, too.
Good idea, bad execution
It’s worth noting that the man who invented shopping malls eventually hated them. Victor Gruen, an Austrian architect who emigrated to the U.S. in 1938, drafted plans for the first indoor shopping mall in the mid-1950s. Those plans became Southdale Center, which opened in Edina, Minnesota, in 1956. Southdale embodied all the elements of what we now consider commonplace for malls: two floors, a central atrium with escalators and two large department stores on opposite ends, all surrounded by a parking lot.
This became America’s shopping mall template, which went largely unchanged for the next 50 years. And it wasn’t at all what Gruen intended.
“When Gruen first drew up the plans for Southdale, he placed the shopping center at the heart of a tidy 463-acre development, complete with apartment buildings, houses, schools, a medical center, a park and a lake,” Gladwell wrote. “Southdale was not a suburban alternative to downtown Minneapolis. It was the Minneapolis downtown you would get if you started over and corrected all the mistakes that were made the first time around.”
Edina didn’t become the next downtown Minneapolis, though. As for why, it’s partly remarkable timing, and partly the greed it fostered.
In 1954, just two years before Southdale’s unveiling, Congress began changing the tax code for commercial real estate, in the form of an “accelerated depreciation” deduction. This let developers deduct a percentage of their property’s total cost every year, tax-free, as an intended reimbursement into the property’s upkeep. Since this deduction was often larger than a property’s yearly income, developers could conveniently report an annual “loss,” avoid taxes and quickly flip their property. Malls like Southdale were replicated en masse on whatever land was cheapest, as Congress continued to pass increasingly generous deduction measures. (Congress didn’t reverse course till the mid-1980s.) Gruen had imagined malls as centers of good urban planning. Developers had little incentive to be that imaginative.
“The vision was always to create a mini village of some sort,” Nicholson added. “And we got to this stage, at least in the ’80s, where we were just after the money.”
While Gruen’s skills as an architect were questioned — Frank Lloyd Wright reportedly despised Southdale’s design — Gruen’s real brilliance was in his grand visions for urban renewal. In his later years (after disavowing malls), Gruen turned his professional focus to urban renewal — including the restoration of downtown Salt Lake’s historic ZCMI Center cast-iron facade in the 1970s, just a few years before his death.5 comments on this story
Forty years later, as the Gateway undergoes its own restoration just a few blocks away, the space is becoming something that Gruen might have actually liked. It’s a mixed-use space for people to shop, yes, but also to simply gather. There are apartments, non-retail spaces and lots of art — things that serve an existing community beyond its own materialism. Time will tell if it works out at the Gateway. But it’s a start.
“It’s great, because we’re on the cusp of things changing,” Nicholson said. “And that makes everybody nervous.”
Correction: An earlier version said the Gateway’s former Barnes & Noble was being converted into a high-end dining hall. It's actually becoming a hybrid entertainment space that will feature dining, karaoke and arcade games.