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MALLS STILL ON ALERT AS WAR AGAINST TERROR CONTINUES

By Debra Hazel

On Sept. 10, “Defcon” was a term used almost exclusively by the U.S. military and Tom Clancy characters to define a level of war readiness. Today something similar has been instituted at some regional malls, as their owner/managers continue to evaluate how best to protect against terrorism and other threats.

Moody’s Investors Service, one of the two major debt rating agencies, has developed a method to evaluate and categorize the risk commercial properties face from terrorist attacks, dividing real estate assets into three tiers based on their profile. The most well-known and tallest structures will fall into the top tier, while most major super-regional malls will fall into the second tier on Moody’s scale. The goal of the ratings is to help insurers determine the cost of terrorism insurance. At press time, Moody’s hadn’t rated individual centers.

Meanwhile, some executives are expressing fears that insurance companies will start pushing for national standards for security, a measure long resisted by the industry. And, in a separate development, Indianapolis-based Simon Property Group is fighting efforts by GMAC, its lender, to obtain expensive terror insurance for Mall of America (see story, TERROR INSURANCE CRISIS HITS MOA).

Westfield America, among other developers, has categorized centers by likelihood of threat and initiated various levels of security following consultation with local and national law enforcement officials.

“We now have a high-alert status,” said Gary Karl, executive vice president of management, for Los Angeles-based Westfield. “When [U.S. Homeland Security chief] Gov. [Thomas] Ridge puts the nation on high alert, we do, too.”

Many developers have classified their centers by location, with projects near major urban areas or military sites considered more likely targets than those in isolated rural areas.

“Are we really concerned there will be an incident in Cape Girardeau, Mo.?” asked Westfield COO John Schroder. “Are we concerned about Downtown Plaza in Sacramento [located near the California State Capitol]? Yes.”

In the days just after the Sept. 11 attacks on the World Trade Center and the Pentagon, shopping center professionals nationwide reassessed nearly every aspect of their security procedures, from staffing to technology to fire lane management (SCT, December 2001).

“We all took different approaches to the same end,” said Steven Crumrine, corporate director of security for The Rouse Co., Columbia, Md. “We did a security assessment, looked at areas and worked to reduce our vulnerability.”

Westfield is making center blueprints accessible to law enforcement and rescue authorities; information, including photos of stores, sprinkler system maps and details of evacuation procedures will be available both on compact discs sent to the authorities and on a private Web site.

“If we change how we deal with a bomb threat, for example, they will know how to respond,” Karl said. Westfield officials admit they may be more sensitive than most; they managed the shopping center below the Trade Center towers and lost an executive in the attack.

The only missing element is often the plan for anchor stores, whose real estate is not controlled by the mall owners. Concerned about providing the greatest amount of information possible to law enforcement, Westfield and other developers are continuing to press anchors to provide emergency plans.

Westfield’s approach is not atypical of the industry. Chicago-based General Growth Properties went into high alert at centers in Houston after local officials warned them of a threat that never materialized, reported David Levenberg, corporate director of security. And Rouse, with many projects in the New York City and Washington, D.C., metro areas, has categorized them into different levels of alert and threat, Crumrine said.

In some respects, though, the industry has not maintained the pitch of alert that was seen immediately after the September attacks. General Growth reverted to pre-Sept. 11 security staffing levels about two weeks later, though many other measures instituted after the attacks remain in place, Levenberg said. Roof access remains tightly controlled, and there are daily sweeps of the center. As for Rouse, its shopping center security officials continue to coordinate and consult with each other regularly, Crumrine said.

“The true benefit I’ve seen is the refocusing on policies and procedures,” said James Joly, vice president of mall services for Allied Security, Boston, adding that shopping centers are also better about constantly monitoring such sensitive areas as loading docks, roofs and parking decks.

Another legacy of Sept. 11 has been a closer relationship between centers and law enforcement.

Yet one consultant said he fears that the industry, and much of America, could be slipping back into complacency.

“I’m not happy to report that we’re seeing people are certainly retreating post-Sept. 11,” said Jonathan Lusher, a senior vice president at security firm IPC International Corp., Bannockburn, Ill. Faced with budget crunches, a few centers have abandoned increases in security spending, or are even cutting back from 2001 levels, Lusher said.

Cost, as well as calm, may be a reason: Security is expensive. The average mall spends about a quarter of its common area maintenance expenses on security, according to ICSC research. Westfield has increased its capital outlay on technology and customer service personnel by up to 50 percent in some centers. Rouse also increased its security budget last year — although executives would not say by how much.

On the part of their companies, at least, neither Levenberg nor Crumrine sees a backsliding in interest in security measures. Rouse remains on a heightened alert status, Crumrine said.

While Westfield backed off some measures that were not popular with shoppers, such as dog patrols and the removal of trash cans, its level of security remains tight, officials say.

Anyway, insurance companies won’t permit complacency, Levenberg argues. And that could lead to a longer-term problem: the creation of industry security standards, which have long been opposed by those who would have to implement them.

“Organizations not familiar with our industry could create standards that would be difficult to comply with,” Levenberg said.

Most feel, however, that they are doing as much as humanly possible to protect people and property.

“I think Sept. 11 changed the psyche of the United States,” said Westfield’s Schroder, an Australian now living in California. “I think Sept. 11 caused everyone to say that things can happen in this country.”

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