Features, Malls and Shopping Centers, Retail Insights

The Future of Shopping Centers Is Happening…in Edina?

Edina, Minn. (pop. 51,000) is an unlikely spot to host the rebirth of the shopping center industry. This quiet and very upscale suburb is known mostly as an affluent bedroom community of Minneapolis, as well as for the garage charger gadgets residents use to jump-start their cars in the frigid Minnesota winters.

But Edina could very likely be the launch point for the next generation of shopping centers. Southdale Center, a Simon Properties center in Edina which opened in 1956 and bills itself as the “oldest, fully enclosed, climate-controlled shopping mall in the U.S.,” is an unlikely ground zero for shopping center transformation.

Yet this past spring, bubbling up beneath the maelstrom of store closings and retail hand-wringing, one of the most promising and even “radical” stories about the future of shopping centers emerged from Southdale.

In April, Simon announced a partnership with Life Time Fitness (not coincidentally based in nearby Chanhassen, MN) to transform a former J.C. Penney box at Southdale into a 120,000-square-foot “athletic resort.” Furthermore, in the words of Bahram Akradi, Life Time’s iconoclastic Chairman and Founder, Southdale itself will be reconceived as a “healthy lifestyle village where people shop, live, work, entertain, socialize and exercise, visit their doctor and relax at the spa.”

A Healthy Mall: The New Paradigm

Akradi continued (and I italicize for emphasis): “Our focus is to develop all-inclusive destinations that encompass the full spectrum of daily life for thousands of individuals, couples and families of all ages.” Michael McCarty, Executive Vice President of Development Operations added, “This project with Life Time is part of a larger vision for Southdale Center – to create a connected community epicenter. With new nearby apartments, the recently opened Hennepin County Service Center, a hotel coming soon, and this athletic resort on the way, Southdale is realizing that vision.”

Note that nowhere in these announcements appears the word “retail.” Instead, the focus of the “new Southdale” will be on enhancing the health and well-being of its clientele and residents. And with two of the largest players in their respective industries (Simon is by far the largest shopping center REIT, and Life Time now occupies the #3 spot in the fitness sector) this is indeed a serious undertaking.

The new Life Time athletic resort is scheduled to open in early 2019. But I believe the larger story is the planned transformation of Southdale from a traditional retail-oriented center into a varied mixed-use community focused on the health and wellness of both its inhabitants and visitors.

A Lure for Millennials

There is a precedent for such a transformation, and it is quite possible that Liberty Center, a “health and wellness” mixed-use property developed by Steiner + Associates adjacent to a prominent Cincinnati medical center (which I reviewed in an earlier column link ), served as a model for the “new Southdale.” But in many ways, Liberty Center is a traditional retail-based development with additional space accorded to spiritually enhancing and wellness related activities.

The difference with Southdale is the incorporation of Akradi, a retail visionary, and Life Time Fitness into the wellness mix. I can report from firsthand experience that Life Time has transformed the old and very tired model of gym as workout space into gym as a family-based spa resort, including restaurants, salon services and physical therapy. In fact, Life Time members often settle in for the day – reading and working in the comfortably furnished lounge areas; sprawling in chaise lounges beside the Olympic size pools and enjoying a few moments of solitude while their children participate in spirited summer camps and a range of other youth-oriented activities.

As demonstrated by prior mall-to-mixed use conversions, the opportunity to live/work/relax in a single locale – without the need to continually start and restart the car – is a prime draw for millennials. Add the “wellness factor” to the mix and layer on a healthy and simplified lifestyle, and you have an irresistible draw for the 20-to-35 crowd.

So…keep your eyes on Edina. It could very well be a harbinger of transformation of the antiquated shopping center model (originally conceived in the early 1950s) into a living, breathing, healthful environment that’s just right for 2020 and beyond.

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