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LAYING THE FOUNDATION

BY NANCY COHEN

America did not so much invent the shopping center as reinvent it. Merchants have clustered ever since man formed communities, from the souks of the Middle East to the markets of medieval Europe. The 19th-century arcades of Europe — examples can be found today in London, Milan and St. Petersburg — offer early examples of the enclosed mall. America’s Marketplace: The History of Shopping Centers, published by ICSC and Greenwich Publishing Group, provides the first comprehensive history of the modern shopping center, tracing it from its roots to the present day. It’s required reading for anyone wishing to understand, let alone work in, the shopping center industry. The first chapter is excerpted here.

Most homes were scattered wide across the vast American countryside for the first half of the nation’s history. Isolated farmsteads were a long, dusty ride from the businesses that clung together to form the small towns of rural America. Peddlers laden with pots, pans and woolens traipsed from one home to the next. A trip to the trading post or dry goods store was a major, infrequent event.

That far-flung marketplace came to be dominated by the mail-order houses that could most conveniently serve it. Thick, illustrated catalogs from Sears, Roebuck and Montgomery Ward (both founded in the late nineteenth century) offered page after page of merchandise, from farm equipment and firearms to red-flannel drawers, beribboned bonnets and even violins.

Country Club Plaza, Kansas City, Mo.

The latter half of the nineteenth century also saw America’s cities grow. A rising tide of immigration and the industrial revolution, which began drawing workers from farms to factories, swelled the metropolis. To serve the burgeoning urban population, dry goods stores expanded into grand emporiums. Between 1860 and 1910, such merchants as John Wanamaker in Philadelphia, R. H. Macy in New York and Marshall Field in Chicago built multistory retail palaces, where attentive sales clerks fit calfskin gloves, cut yards of lace and fetched an array of merchandise for the carriage trade.

With the advent of mass-transit systems — including the commuter railway, the cable car and the electric trolley — came the segregation of the city’s residences from its commercial sphere and the flight of the upper classes from the urban hoi polloi. Tracks radiated from the city center to suburban enclaves, where houses set amid sprawling yards rose within walking distance of the train station. For the most part, these exclusive suburbs continued to rely upon the city as a commercial and cultural center, but a Main Street lined with small shops served residents’ daily needs.

In some cases, these local retail districts developed as early forms of shopping centers and were designed to coordinate with the village architecture. In 1916, for example, a cluster of Arts and Crafts-style buildings called Market Square opened in a landscaped plaza across from the railway station in Lake Forest, Illinois. And in Roland Park, an affluent community just north of Baltimore, six shops filled an 1896 Tudor-style building that may have been the first to provide parking in the rear for the newfangled automobiles that would soon reshape the country.

This 1902 Sears, Roebuck catalog offered everything from carriage harnesses to house-building kits.

The Age of Automobility
Henry Ford’s introduction, in 1908, of the modestly priced Model T put car ownership within reach of the masses. While only 8,000 motor vehicles had been registered in 1900, that number multiplied a thousandfold, to eight million, by 1920. Farmsteads would never again be so isolated, and suburban housing and services no longer had to be within walking distance of the railway. The car opened new expanses of land to residential development.

The city’s concentration of culture, commerce and consumer goods remained a magnet for all those living at its periphery, but city streets, which had been laid out to accommodate the horse and carriage, offered few places to deposit a car and were soon grievously clogged by the increasingly popular automobile. Only the outlying areas provided the wide-open spaces that auto owners needed for parking.

The automobile age also ushered in mass-manufacturing techniques (such as the moving assembly line, implemented by Henry Ford in 1913), which caused prices to drop and put all manner of goods within reach of a broad market. What had been a stratified trade of luxury items and essentials was swept into a wave of mass consumerism. Amid the prosperity of the first three decades of the twentieth century, Americans increased their discretionary spending from 20 percent to 35 percent, according to historian Gary S. Cross. Electric toasters, vacuum cleaners and other domestic appliances not only proliferated but found a permanent place in most American homes.

Downtown streets became nearly impassable when pedestrians, the horse and carriage and the increasingly popular automobile jockeyed for space, as seen in Chicago in 1929.

The retail equivalent of mass manufacturing was the chain store; with multiple units enabling them to reduce costs by buying in volume, chains likewise sought to offer customers a uniform experience, reliable quality and affordable prices. Companies like the Great Atlantic & Pacific Tea Company (later known as A&P) and F. W. Woolworth’s expanded, bringing economical goods to Main Streets and cities throughout the United States. Some 24,000 chain stores dotted the country in 1914; 15 years later, more than 150,000 did.

The spread of chain stores and the mobility fostered by auto ownership brought new options to rural mail-order customers. Executives at Sears, Roebuck recognized the threat posed to their catalog business, as well as the opportunity to serve a growing middle class that needed a place to park its cars.

After opening its first store in Chicago in 1925, Sears, Roebuck began to build freestanding department stores on the outskirts of town, where real estate costs were low, buildings were accessible to motorists and space for parking was plentiful. Within eight years, Sears was operating 400 stores. Location was not the only departure from the formula long employed by the downtown emporiums: Sears stores featured self-service and modest appurtenances, and their wide selection of goods carried low prices, a strategy intended to compensate for customers’ inability to comparison shop.

One of America’s earliest chains was the Great Atlantic & Pacific Tea Company, founded in 1859 to trade in bulk tea, coffee and spices. It revolutionized the grocery business with the 1912 introduction of the cost-saving cash-and-carry concept; at the time, most grocers offered credit and delivered the goods.

The fact that it did not operate downtown stores freed Sears to try the suburban strategy. Other department store companies were slower to multiply in the suburbs for fear of cannibalizing business at their downtown emporiums. Some began to open small branches as a convenience to customers. Boston-based Filene’s, for example, opened a number of stores throughout Massachusetts in the 1920s. Its Northampton and Wellesley branches catered to the young ladies attending college at Smith and Wellesley, while the one in Hyannis served the Brahmins vacationing at the seaside. But typically these branches — so small they were called “twigs” — offered only a highly edited collection of the most stylish fashions, rather than the full selection of goods displayed downtown.

Despite the reluctance of the department stores, retailing had decidedly taken root beyond the downtown core by the 1920s. Catering to those traveling by car rather than on foot, shopping strips sprang up along roadways at the outskirts of towns; they either hugged the curbside and offered parking in the rear or were set back to accommodate cars along the street. Generally built by investors or by the retailers themselves, the strips typically included a grocery store, a drug store and other basics, allowing shoppers to attend to their everyday needs in a single trip.

More exclusive retail districts were designed in concert with some of the posh suburbs of the era. A landmark of this type was Country Club Plaza, which was built in 1922 to serve the affluent Country Club district of Kansas City, Missouri. The planned community was conceived as a whole by Jesse Clyde Nichols. In keeping with the upscale tenor of the residential area, the Spanish-themed, open-air shopping plaza featured stucco buildings with red-tile roofs, lavish landscaping and such adornments as Grecian urns, marble statuary, bronze fountains and wrought-iron gating. The abundant free parking was hidden from view by decorative brick walls.

The grandeur of the Wanamaker flagship in Philadelphia was typical of nineteenth century retail palazzos, where sales clerks fit calfskin gloves finger by finger. Public transit (such as the trolley cars seen in the lower left corner) helped enlarge the city beyond its core while drawing people to the central business district’s shops.

What made Country Club Plaza a turning point in the history of shopping centers, however, was not its design. It was that the J. C. Nichols Company had for the first time developed a major concentration of suburban retail; deliberately selected tenants that would complement each other and offer residents a broad range of merchandise, from luxuries to basics; and continued to own, lease and manage the plaza as a holistic entity, and to oversee tenants’ businesses to ensure high standards.

Settling the New Suburbia
The free-spending expansiveness of the Roaring Twenties crashed, along with the stock market, in 1929. The Great Depression squelched demand and stifled development for more than a decade. While World War II stimulated massive government spending that lifted the economy, wartime shortages spelled five more years of deferred purchases. Postwar prosperity unleashed a ravenous appetite for consumer goods.

The nation was also starved for housing. New construction had been limited during the depression and war years, even as the population grew. Families contended with the acute scarcity of apartments and houses by doubling and tripling up. The need only intensified with the return of 16 million veterans, which catapulted marriage and birth rates.

In response, the government financed the rapid development of vast tracts of inexpensive homes in the lands lying well beyond the city and mass-transit lines. Federal policy converged with the urgent demand, the now ubiquitous automobile and the wartime development of fast and cheap construction techniques to orchestrate a massive exodus of young families to new suburbs.

The Federal Housing Administration (FHA) guaranteed financing to developers, and federally insured mortgages for homebuyers required only a 10 percent down payment and a 25-year payback at a low fixed rate of interest. Veterans — whose pockets were full of discharge pay — were entitled to an even better deal: The 1944 Servicemen’s Readjustment Act, or GI Bill, guaranteed them loans for homes with zero down and a 30-year mortgage at 4 percent.

Grocery stores like Weingarten’s were early to enter the suburbs, typically with freestanding stores and plenty of parking, like this one in Houston, Texas, pictured in 1943.

The meagerest of down payments could procure a $7,900 two-bedroom house in Levittown, the archetypical development of 17,400 homes that opened in the potato fields of Long Island, east of New York City, in 1947. With bargains like that — and few other options — the suburbs were growing at 10 times the rate of central cities by 1950.

Postwar subdivisions like Levittown had transformed the image of suburbia from a leafy enclave of affluence to the quintessential setting for America’s growing middle class. And while prewar suburbs had developed as spokes around an urban hub, the prevailing car culture had decisively broken the city’s hold, paving the way for the decentralization of housing, manufacturing and business.

Following the Customer
Land beyond the cities was plentiful and cheap, much of it in still-unincorporated areas and thus unencumbered by stringent building regulations. Industry, services and jobs soon followed the housing developments. Even bastions of business began relocating in the suburbs after 1954, when General Foods decamped from New York City for White Plains, 20 miles to the north. And retailers naturally sought to go where their customers were.

The FHA saw to the construction of some retail centers within the new subdivisions it was financing across the country, expecting the convenient amenity to attract residents. It even offered free building plans.

As developer Roy Drachman Sr. recalled, “I came to Tucson after the war at the request of the air force, to build 600 residential units. The FHA insisted that we also provide services — a market, shops. The shopping center was a demand by the financial institution.”

The supermarkets that were replacing the corner grocer typically led the way into the suburbs. The proliferation of the refrigerator — a fixture in 91 percent of homes by 1954 — had freed shoppers from a once-daily chore; they could now load up their cars and fridges with a week’s worth of groceries. But that required parking.

Supermarket chains had begun expanding into the suburbs by building their own stores along the roadways; later, they built a complementary strip of stores. “They wanted some company for the supermarket, and renting out space to tenants also offset the supermarket’s cost of doing business,” said Norman M. Kranzdorf, a lawyer-turned-developer who represented Food Fair Stores Inc. in the 1950s. “The parking lot was there, they had extra land and they thought the conglomeration of tenants would benefit all of them, bringing more people to the site and letting them feed off each other’s trade.”

One of the first department store companies to appreciate that retail synergy was Los Angeles-based Broadway Stores. The expansion-minded firm spied a greater opportunity than that presented by spawning branches: By creating its own retail district, with a significant number of stores and ample parking, the company hoped to draw customers from well beyond the immediate area.

In 1947, the Broadway-Crenshaw Center opened, south of Hollywood. To accompany its own department store, Broadway Stores had built half a million square feet of space for other shops (which the company selected and leased to) and parking for 2,500 cars. The concentration of retail was indeed a success — so much so that a competitor, the May Company, decided to open a department store with ancillary retail space across the street. The combination created a magnet for shoppers but, as Fortune magazine put it in 1951, “the unfortunate traffic barrier between the two main stores, which are separated by busy Santa Barbara Avenue, shows why such a center should be planned as a single unit.”

That early effort offered other valuable lessons. Broadway-Crenshaw was designed essentially as a supermarket-anchored strip center writ large: A long line of adjacent stores shared a rear parking lot. “It was a thousand feet from the stores to the furthest reaches of the lot, and they had to install trams to haul people,” Drachman said. “They learned that a big shopping center had to have its parking all around it.”

Northgate Center, which Allied Stores opened in Seattle in 1950, put shoppers back on their feet by sandwiching a pedestrian mall between facing rows of shops.

The Prototype Progresses
Improving access at a sprawling center was not the only conundrum of early retail development; another was how to encourage shoppers to walk by all the stores instead of parking right in front of their immediate destination. The almost paradoxical solution harked back to the shopping patterns that had existed before the Model T: Attract motorists, then separate them from their cars to create a pedestrian shopping environment.

One of the first shopping centers to do this successfully was Northgate, which Allied Stores Corporation developed to house its Bon Marché department store. Northgate opened in 1950 seven miles north of downtown Seattle. Its stores were arranged — much like shops along any Main Street — in two lines, facing each other across a walkway that was open to the air and turning their backs to the surrounding parking lots.

“No one had ever seen such a thing as a mall with stores on both sides,” Drachman said. “Everyone thought that it was a dangerous thing to do, that it could be a big failure.”

Northgate’s pioneer status did stymie the leasing process, recalled James B. Douglas, who joined Allied to oversee its fledgling center. “Allied had the land, but they didn’t sign one lease in two years. The retailers all said, ‘Show us one of these things,’ and they couldn’t. I took over and made ridiculous deals just to get the show going.”

Although its design was a major evolutionary step for shopping centers, Northgate had in effect recreated downtown’s street of shops, minus the cars typically parked at curbside. And its resemblance to downtown extended to the way Douglas merchandised the center.

“Everything we did we copied from downtown — how many jewelers, how many women’s wear shops,” he said. “I’d go downtown and study the trade that was in-between the department stores: Those stores were created over 100, 150 years. They had earned their location.” Rather than reinvent a proven formula, Douglas walked along the streets with a measuring tool, calculating the linear footage of storefronts to determine how much space to allocate to each retail category within the center.

Austrian-born architect Victor Gruen (right) was a vocal advocate of pedestrianism. “No automobile — not even the most elegant Cadillac — ever bought a thing,” he told Fortune in 1962.

Accommodating the car while segregating it from the shopping experience was pivotal to the ultimate success of shopping centers. A vocal advocate of pedestrianism was Victor Gruen, an Austrian-born architect who became a leader in center design. At a time when the nation’s downtowns were clogged with cars, forcing would-be shoppers to dodge traffic and inhale exhaust, his allegiance was to the shopper on foot. “No automobile — not even the most elegant Cadillac — ever bought a thing,” he told Fortune in 1962.

Gruen was a driving force behind the development of another shopping center landmark, Northland, which opened in the Detroit suburb of Southfield, Michigan, in 1954. He had observed the dramatic growth of the area while visiting Detroit on business in 1949, then wrote a letter to executives of the J. L. Hudson Company, whose emporium had dominated retailing in Detroit since its founding in 1881, explaining why they should build a branch store and shopping center. The 1950 census — showing that Detroit’s suburban population had more than doubled since 1940 — convinced them to build not just Northland, but two other centers in the area.

Gruen had never built a shopping center before, but he set out to make Northland the largest one at the time, with more than a million square feet of leasable space and 7,500 parking spots. It was also among the first to stack stores on two levels. (Shops along Main Streets and in strip centers often had upper stories, but they were occupied by offices and apartments.) A mammoth Hudson’s branch sat in the center of the structure; around it stretched a series of landscaped, open-air courtyards and promenades, which were surrounded in turn by 80 shops.

The Bucksbaum brothers

Fountains, benches and a wealth of sculpture were all part of Gruen’s plan to encourage lingering. “More people — for more hours — means cash registers ringing more often and for longer periods,” he wrote in 1973. And he was right: Northland’s sales in the first year — $78 million — were double the projections.

“We went out to Detroit to see their center,” said Matthew Bucksbaum, who with his brother Martin had recently launched a development company, General Growth, and begun building retail centers. “Northland was a monster. But we saw it was the wave of the future.”

The Future Arrives
In 1956, the prototype of the modern shopping mall was unveiled in Edina, Minnesota, just beyond Minneapolis. Another brainchild of Victor Gruen, Southdale was the country’s first fully enclosed, climate-controlled shopping center.

Enclosing the center with a roof was a strategic defense against the inclement weather in Minnesota, where only one day out of three was conducive to outdoor shopping. It was made possible by recent advances in heating and cooling systems, considered a marvel of the day. But under that roof was an equally significant advancement: For the first time, two competing department stores were united in a single retail complex.

Donald Dayton and Kenneth Iverson, executives at Dayton’s and Donaldson’s, respectively, break ground at Southdale Center, which opened outside Minneapolis in 1956. There, for the first time, two competing department stores would operate under one roof. The model would be replicated for the next five decades.

Like Northland, Southdale was developed by its area’s leading department store, the Dayton Company, whose shoppers were migrating from the city. But the Dayton brothers took a bold step when they asked their primary competitor, Donaldson’s, to open a branch in their project.

“They wanted to be with the competition, like in downtown,” said William Hise, a real estate lawyer who in 1971 joined the by-then merged Dayton Hudson Corp. “The philosophy was to bring everyone together to create a stronger draw.” Not incidentally, the invitation to share would also preempt Donaldson’s from opening a competing center nearby.

Despite their accord, the longtime competitors were understandably wary of each other. Gruen’s design assuaged some concerns: He placed them at diagonally opposite ends of a central courtyard, putting some distance between them and giving the logistical advantage to neither. (Nevertheless, Dayton’s insisted on lease terms that relegated Donaldson’s to second-tier status, a practice since discontinued. “Donaldson’s could only be 70 percent the size of Dayton’s, for example,” Hise said. “I’m embarrassed to read the documents today; ultimately we had to go back to excise some of that material.”)

Gruen also sought to make Southdale more than simply a retail venue, in an effort to combat what he saw as the isolation of the suburbs, which offered ample housing but few of the institutions or amenities — such as Italy’s piazzas or New England’s village greens — that fostered human interaction. “By affording opportunities for social life and recreation in a protected pedestrian environment, by incorporating civic and educational facilities, shopping centers can fill an existing void,” he wrote in 1960. “They can provide the needed place and opportunity for participation in modern community life that the ancient Greek Agora, the Medieval Market Place and our own Town Squares provided in the past.” And he was convinced that “meeting other needs which are inherent in the psychological climate peculiar to suburbia,” as he put it, would attract more business.

So Southdale encompassed not just a children’s playroom, zoo and carousel, but an auditorium for community meetings. It was adorned by commissioned artwork and sculptural cages filled with bright-plumed birds. It housed small-town services, including a barbershop, bank and post office. It provided what Architectural Forum in 1956 called “all kinds of things that ought to be [downtown] if downtown only weren’t so noisy and dirty and chaotic — sidewalk cafes, art, islands of plantings, pretty paving.” As Gruen had hoped, suburbanites did stream to Southdale, even on Sundays — when the stores were closed — simply to promenade and mingle.

A new kind of downtown-away-from-town had been born.

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