This is an archived article that was published on sltrib.com in 2006, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.
Editor's note: With last week's announcement by the LDS Church that it hopes to remake downtown by building a walkable, upscale, open-air mall, here is a report by The Wall Street Journal on how urban malls are faring elsewhere.
Judging from its first week, one of the nation's largest urban malls, the Westfield San Francisco Centre, is poised to shake up the city's retail landscape. Shoppers waited in a line that stretched around the block at Market and Fifth streets to preview the 338,000-square-foot Bloomingdale's, second in size only to the flagship Bloomingdale's store on Manhattan's East 59th Street.
1980s rap star Biz Markie spun records, a fashion show featured outfits by up-and-coming Bay Area designers and the cinema showed ''The Maltese Falcon'' and other classic San Francisco movies. Diners jammed seven full-service restaurants and a food court that features 15 ''casual gourmet eateries'' featuring dinner plates, silverware and table service.
''It's kind of like Vegas,'' a 36-year-old lawyer, Allison Wang, commented to her husband, Tim Wang, as they stood near the historic domed rotunda incorporated into the design of the nine-story mall.
But can the Westfield San Francisco Centre thrive over the long term, on the edge of the city's tourism and retailing hotbeds and in an era when fewer Americans shop in department stores? The question nagged at a mall restaurateur, even as he reveled in the crowds. ''San Franciscans don't like malls,'' said Chris Yeo, the chef at Straits Restaurant, a Singaporean restaurant on the mall's fourth floor. ''When the hype is over, who will come here?''
Urban malls have had a spotty history in the U.S. New York's Time Warner Center and Chicago's Water Tower Place - both smaller than the Westfield San Francisco - have done well, but others have sputtered, most notably the Manhattan Mall in New York's Herald Square and the Hollywood & Highland Center in Los Angeles, which hosts the Academy Awards in its Kodak Theatre.
More broadly, enclosed malls are battling, and sometimes morphing into, open-air lifestyle centers, where shoppers can park near storefronts. Mall-based department stores continue to lose ground to discounters. Even as overall U.S. retail sales rose 24 percent over the past six years to $2.2 trillion, department-store sales declined nearly 14 percent over the same period, to $86.7 billion last year, according to the National Retail Federation, a Washington trade group. The trend probably will continue. Department-store spending in the U.S. is forecast to drop by 5.5 percent by 2010, according to the research firm Euromonitor International.
An element critical to an urban mall's success is drawing shoppers up to higher floors, says Paco Underhill, author of Call of the Mall and chief executive of Enivrosell Inc., a New York retail consulting agency. At Chicago's eight-floor Water Tower Place, the top floor is connected to a Ritz-Carlton hotel.
Spiral escalators in the Westfield San Francisco Centre show off all angles of the mall. ''It's almost like a Ferris wheel ride,'' says Underhill. ''There's excitement and joy, whereas if you're going up a dark escalator at Manhattan Mall, where you don't know where you're going to end up, that's a lot tougher.''
Cultural attitudes also may make a difference. ''San Franciscans embrace the urban, European lifestyle with street retail,'' says Bill Huelsman, senior vice president for West Coast retail at Jones Lang LaSalle Inc., a Chicago-based commercial real-estate services firm. ''L.A. is very much an automobile culture.'' Westfield San Francisco Centre has subway lines at the basement level.
An urban mall, if successful, reverberates in the surrounding area. Manhattan's Time Warner Center transformed the downtrodden Columbus Circle area by bringing in a high-traffic, mixed-used project, including the 300,000-square-foot shopping mall at its base. ''It has rejuvenated the entire Broadway corridor,'' says Robert Cohen of Robert Futterman & Associates, a New York retail real-estate services firm.
Australia-based Westfield Group and Cleveland-based Forest City Enterprises, which jointly developed and own the $460 million Westfield San Francisco Centre, combined 755,000 square feet of new mall space anchored by Bloomingdale's with 500,000 square feet of existing mall space, anchored by Nordstrom. The development also includes 245,000 square feet of office space above the mall, with tenants that include San Francisco State University.
To mark the site's history, the mall incorporates a 250-ton dome and a Beaux Arts facade that were part of the Emporium, a San Francisco department store for 100 years until it closed a decade ago.
The Westfield San Francisco Centre developers are banking on the pull of a critical mass of anchor stores, both within the mall and nearby. Nordstrom Inc. responded to the arrival of Bloomingdale's next door by renovating its 350,000-square-foot store. A Neiman Marcus and a Saks Fifth Avenue are just a few blocks away. Barneys New York, a unit of Jones Apparel Group, is planning to open a 60,000-square-foot store near Union Square next year.
Peter Lowy, Westfield Group's chief executive, says the mall's other retailers - 170 in all - also will draw shoppers. ''There was big retail demand that was unmet in the marketplace, because you couldn't get space in Union Square and in the old San Francisco Centre,'' Lowy says.