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Mall Envy - Chicago Reporter article

Aug 25, 2009

Tracey Munno, executive vice president and general manager at Lincoln Mall in south suburban Matteson, has spent the past four years trying to build a high-end retail presence at the once-thriving mall. Such a project is an ultimate numbers game for malls and retailers: How much space exists? How much money do people in the area make? How much revenue does the mall bring in?

But Munno said there was one number in particular that concerned retailers interested in setting up shop. “I had a meeting one day with a sit-down restaurant–a national chain,” she said. “I had a call back from them, and [the restaurant representative] said very straightforward: ‘Look, we like your site best, but you have one number that concerns us.’ I said to them, ‘I know exactly what number you’re talking about, so let’s talk about it.’”

The “diversity” of the trade area–the area between three to 10 miles surrounding the mall–has been a source of concern to potential retailers, Munno said. According to the 2000 Census, the population in the Lincoln Mall’s ZIP code, 60443, was 54.2 percent African American. And she’s spent a considerable amount of energy trying to debunk the preconceived notions about the shopping patterns of black consumers.

Munno said once she explained to the restaurant representative that African Americans living in the area were purchasing $250,000 and $350,000 homes and had median family incomes of $74,797 in 1999, she received a letter of intent two weeks later from the chain to build their restaurant.

The Chicago Reporter examined four South Side and south suburban malls located in areas with large black populations and two north and northwest suburban malls in predominately white areas based on a number of variables– such as size, number of “anchor stores,” extra amenities like movie theaters and food courts, and profit–along with an analysis of crime statistics, median area income and shoppers’ observations. The Reporter found myriad ways in which shopping can be a markedly different experience for black shoppers trying to buy items in their own communities than in white neighborhoods.

But the issue of perception among retailers about how African Americans want to spend their money and where they want to spend it seems to play a significant role in what shopping options are available for black shoppers. Retail experts say there is a pervasive belief that black shoppers lack either the money or the taste to get high-quality goods and services–an impression black consumers say is undeserved.

“People have money out here,” said Vicky Reed,who moved to Matteson from Chicago’s Hyde Park neighborhood six years ago. “And they’re forced to go [elsewhere] and travel to get what they want.”

Retailers say their decisions on where to place their stores are based on complicated formulas and numbers that center on profit rather than prejudice.

But James Matanky, president of the Matanky Realty Group, which has developed hundreds of commercial and industrial properties in Chicago and its suburbs for the past 52 years, says that retailers like to build where there is already an established retail area. This unintentionally serves to ignore underserved minority neighborhoods.

“To try and get [stores] with cookiecutter status to change things is not easy,”Matanky said. “They know how to make money. If we ask them to take a risk … there needs to be a reason why they’ll do it.”

Retailers claim their motives for placing stores are not so black and white, so to speak. Whether it’s a Starbucks with a drive-thru, a trendy shoe store or a grocery store, numerous factors affect the placement. But, in the end, retailers’ relationship with leasing agents plays the key role.

“With many retailers, we’re their largest landlord,” said Les Morris, a spokesman with Simon Property Group, which owns both River Oaks and Orland Square in southwest suburban Orland Park. “There’s a certain level of expectation on how we lease and manage our malls. Our mantra here is to develop, own and manage the best properties and the best location, and I think retailers take a lot of comfort in that.”

Experts describe the process of wooing retailers to a mall as somewhat akin to passing a note in a classroom to someone you have a crush on, asking them if they’d like to go out with you sometime.

Because it’s the retailer who makes the final decision on whether to open a location, mall managers and leasing agents do their best to meet the retailers’ strict criteria, which are often based on marketing research conducted by private companies they hire and other data the mall may compile. Matanky Realty Group keeps a retail tenant database, which lists certain things retailers look for, such as income and education levels of shoppers in the trade area and shopping patterns.

“It’s not an exact science, but there’s lots of parameters,” Matanky said. “For example, in Hazel Crest, people are making $60,000, half of them have gone to college and they spend X amount on food, houses, et cetera. But if you take that same income level and move it two suburbs over, you’ve got different shopping patterns.”

While Matanky admits that some of the marketing data are based on race and certain preconceived notions of race–as Munno discovered when trying to court her restaurateur to Matteson–he thinks the main color retailers are concerned with is green.

Retailers contacted for this article– mostly ones that South Side and south suburban shoppers say they want to see more of–said their marketing demographics help maximize their profit.

“In general, we just look for a strong market that can provide us with strong business throughout the day,” said Mark Crowley, a spokesman for casual-dining chain Panera Bread. “We look at what other businesses or hospitals and universities are in the area that might provide us with additional support for our business. If we’re not in a particular area, it has more to do with us managing our own growth as opposed to avoiding it.”

Kimberly Terry, a spokeswoman for Gap Inc., which owns The Gap, Banana Republic and Old Navy, said she can’t disclose details on the company’s real estate strategy, but added that, “We evaluate all our locations in the context of the market. We look at a number of factors when deciding to open a store, including our existing store base … and sales potential of a particular market.”

Mall managers also point to competition from other retailers that were formerly housed inside malls but are now opening up stores nearby. Along Cicero Avenue, from 79th to 87th streets, Value City Furniture, Best Buy and restaurants like the Olive Garden give Ford City Mall a run for its money.“People are being pulled out of the malls because retailers have found they don’t need to be right on top of each other” to make money, Matanky said.

Experts also believe that fewer shoppers crave the mall-as-a-major-outing experience; more of them now want to go directly into the shops they are interested in and leave. “There’s a multitude of formats–the mall isn’t the only format out there anymore,” said Patrice Duker, spokeswoman for the International Council of Shopping Centers, a trade organization for the industry.

Hy Brandelstein, leasing manager for the Provo Group, which owns The Plaza, thinks this change could ultimately be good for his mall, forcing a new model for urban shopping that retailers will want to take advantage of. “There’s more of a change in looking at urban markets now because they’re established,” he said. “It’s not so questionable.”

Some malls such as Lincoln Mall have struggled with this change, but others like Gurnee Mills rode the tide ultimately by adding an entertainment element to the shopping experience, said Allison Patz, Gurnee Mills’ director of mall marketing.

During interviews with shoppers, most of the malls in the south were viewed as being of less quality than the ones in the north. Some malls’ reputations were worse than others; “I don’t shop there,” was a common initial comment from dozens of people interviewed about their views on Ford City, The Plaza and, to a lesser extent, River Oaks.

Based on an analysis of crime data and observation through repeated trips to the malls, however, so-called rampant crime doesn’t exist the way that people think it does. The majority of crimes committed altogether at the malls consist of retail theft, with robbery and burglary a close second. Violent crimes such as assault, armed robbery or homicide make up very small percentages of total crimes committed. At River Oaks, for example, retail theft made up 254 out of 1015 calls to the Matteson Police Department in 2006, compared with only two calls for simple assault.

Brandelstein has always felt that The Plaza’s image is inaccurate and poorly deserved, especially since the mall has gone out of its way to cater to an older clientele. “We generally have more parents and grandparents out here, and that’s the way we prefer it,” he said.

He pointed to the now-defunct movie theater as a main cause for The Plaza’s bad rap during the 1990s. The theater, originally owned for decades by a small operation called M&R Theaters, was purchased by large movie chain Loews in 1988. Brandelstein said that the theater, which was never officially a part of the mall, lacked any decent security, so when fights, loitering or crime occurred, the mall was blamed for it.

Another mall that has suffered major public relations problems and yet to recover is Ford City. Several highly publicized acts of violence starting in the 1990s–such as gang shootings of innocent bystanders–tarnished the mall in the eyes of many shoppers.

But it’s not just fears of crime that keep shoppers away from the malls.

Class perception plays a huge role in where middle-class African Americans are choosing to spend their dollars.

While shopping at Orland Square, Tovis Ingram said River Oaks got a little “ghetto fabulous” for her. Ingram adds that the treatment she receives, along with its implications and assumptions of possible criminality, is customary in her neighborhood. “When you go there, they make you check your bags and give you tickets to make sure you’re not stealing,” said Ingram, who lives in Country Club Hills. “They don’t do that when I’m [here].”

Mary Bradley, Hyde Park resident and conference center operator at a downtown law firm, agreed. “In [our] neighborhood, things are locked down–key coded. I’m offended by that,” Bradley said. “They treat you like a criminal.”

That’s a far contrast from shopping at places like Westfield Old Orchard in north suburban Skokie, or Gurnee Mills, where groups of teens and families rove about through the open courtyards and promenades.

Also a matter of some subjectivity is the quality that shoppers feel is lacking at malls in the south. Many shoppers point to the proliferation of “urban apparel or shoe stores” as a reason why they don’t shop there.

Kia Sutherland, 29, who lives in the Kenwood neighborhood, agreed. “Whenever you have a community where there’s a lot black people, there’s a lot of tennis shoe stores and sports apparel” stores, she said. “It would be very nice if we could have, not even department stores, but other types of stores.”

Lincoln Mall’s Munno sympathizes. “What I hear over and over is affluent African Americans are tired of being boxed into that corner and having this ‘prototype’ that they dress a certain way, that they only like certain colors and only wear a certain size,” she said. “I believe it’s done a disservice to the African- American community for a long time.”

The physical look of the location also plays a key role. Although River Oaks and Orland Square have many of the same stores, presentation is everything. One of the most obvious differences is the stand-alone kiosks that litter the center of both malls. The ones at Orland Square that are not specially customized by the corporate owners, like Cingular Wireless and a Comcast stand, are made with oak wood. They complement the overall aesthetic of the mall’s warm lighting and sandy-colored tiles.

On the other hand, the kiosks at River Oaks have more of an open-air vendor feel to them. They are usually a basic white, nondescript material that is not wood, and the signs put up to advertise the businesses are plain and white, with little color and very basic lettering. The mall lighting is slightly dim, giving the hallways a cave-like appearance.

Morris of Simon Property Group, which runs the kiosk leasing program for vendors at both malls, said that the company contracts out to companies that manufacture the kiosks, and that every attempt is made to find a kiosk that is “mindful of the mall’s aesthetics when we rent those.”

None of the malls in the south come close to Old Orchard or Gurnee Mills when it comes to aesthetics and appearances. Everything about Old Orchard was immaculately designed, from the marble planters full of neatly manicured shrubbery, brick molding and white columns outside of its anchor stores to the gold-trimmed direction signposts, and the spotless parking lot. It’s a sharp contrast from Ford City, visited on the same day. This reporter drove and walked through several major potholes just to get into the building, stepping over garbage and witnessing a small smoldering fire in a woodchip pile outdoors, started by someone who casually threw a cigarette butt into the pile. A bent garbage can stood only a few feet away.

The inside is not much better, even though Ford City still can claim a first-run movie theater and middle-class staples such as Aldo Shoes and Victoria’s Secret. Tile was cracked, and the skylights were so dirty that a sunny day looked overcast.

Bradley feels those little details are indicative of a larger problem of disrespect toward South Side consumers. “We’re settling for it. The mentality of what we expect versus what we receive as customers” is different, she said. “It’s not that I think I’m more or better than anyone else, but I don’t feel like I’m being respected as a consumer.”

Right now, mall managers want to keep their positive outlook and are holding out for equalizers that could make their malls comparable to ones in the north. Lincoln Mall, it seems, has the most to look forward to with $45 million in tax increment financing from the Village of Matteson and about $120 million in renovations in the next two to three years. “We have to keep chiseling away [at barriers] to create the neighborhood and economic development and retail environment I think these communities deserve,” Munno said. “I’m so passionate about this project because I want to do the right thing by the market.”

State Rep. Robin Kelly, who is based out of Matteson, is putting political weight behind the project. “It’s one of the economic engines of our village, and I want people to know they have a retail hub to go to,” Kelly said. “People don’t want to have to drive a half hour–and I don’t, either–to buy some of the things I want. Class A retail is what people are looking for and can afford.”

The upgrade, spearheaded by Lincoln Mall’s new owners, Dallas-based Realty America Group “Lincoln Mall LP,”includes more “lifestyle shopping options”– restaurants and a first-run multiplex movie theater. Munno believes that the fact that the company is based in another city is what got them so excited about possibilities for Lincoln Mall.

“These folks were not from the area,” she said. They weren’t “tainted by history or the racial makeup of the community and saw great things and a lot of potential for all the right reasons.”

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