A recent event at Lakeforest Mall. Image by MDGovPics licensed under Creative Commons.

This week, Lakeforest Mall in Gaithersburg sold at a foreclosure auction for a fraction of its former value, suggesting it’s in serious trouble. It could be a huge opportunity for Gaithersburg, but will city officials take advantage?

Built in 1978, the two-story, 1 million-square-foot mall off Route 355 was one of Montgomery County’s premier shopping centers for decades, and anchored the adjacent planned community of Montgomery Village. Its developer, Alfred Taubman, was a pioneer in retail design who built dozens of similar-looking malls around the nation (including Marley Station Mall in Glen Burnie and Fair Oaks Mall in Fairfax). Everything at Lakeforest, from the locations of individual stores, to the selection of floor materials, to the slope of the parking lot, was designed to draw and retain shoppers for as long as possible.

In recent years, however, the mall has struggled to compete with newer, more distant shopping centers like Milestone in Germantown, and the Clarksburg Premium Outlets, which opened last fall. Another challenge comes from increasingly popular town center-style developments like Downtown Crown, which sits a few miles away from Lakeforest.

Consumers are also less likely to shop at malls, instead preferring to buy goods online. The suburbanization of poverty has affected neighborhoods around the mall, and some high-profile crimes have created a perception that the mall is unsafe, deterring even more shoppers.

Lakeforest's troubles could be a big opportunity

As a result, the mall has struggled to retain tenants. All four anchor stores, Sears, JCPenney, Macy’s and Lord & Taylor, are still there, but 25% of the mall is vacant, and sales are flagging. The mall’s value has fallen from $218.9 million in 2005 to just $40.2 million this year. On Tuesday, U.S. Bank bought the mall at a foreclosure auction for $19.1 million, one-fifth what previous owner Five Mile Capital paid for it in 2012. (“There are homes in [Montgomery County] that have sold for more than this,” joked local blog The MoCo Show.)

The mall's new ownership says that nothing will change anytime soon, but nationwide, malls have been closing for years. And Lakeforest isn’t the only local mall that’s struggling. About seventeen malls across the DC area have closed, from small shopping centers to big, higher-profile centers like Landover Mall in Prince George’s County.

If Lakeforest does close, the City of Gaithersburg has a pretty big opportunity. The mall sits on 103 acres next to Old Town Gaithersburg, is next to an exit on I-270, has its own transit center serving some of the county's busiest bus routes, and is close to MARC commuter rail. Ride On eXtra, a precursor to Bus Rapid Transit, will serve the mall starting this fall. One possibility is that the mall could be torn down and redeveloped as an urban neighborhood with a mix of homes, shops, parks, and other things.

Rockville Town Square used to be a mall too. Image by the author.

That’s what happened at Rockville Town Square, which sits on the site of the former Rockville Mall. (Ironically, Lakeforest helped kill that mall, which also opened in the 1970s and never really caught on.) It’s not always easy to do. The redevelopment of White Flint Mall in North Bethesda stalled due to a lawsuit with Lord & Taylor, which owns part of the mall property. In Alexandria, Landmark Mall's transformation has faced several delays.

Will Gaithersburg remake Lakeforest as a neighborhood, or push for new highways instead?

Meanwhile, some Gaithersburg city leaders are pushing for construction of an Outer Beltway, which would connect I-270 in Gaithersburg to Route 28 in Northern Virginia. Neil Harris, vice president of the city council and an Outer Beltway proponent, recently wrote an op-ed criticizing infill and transit-oriented development, like what could happen at Lakeforest. “There is such a huge focus on new transit that it crowds out roads,” he wrote.

An Outer Beltway would probably make Lakeforest Mall's problems worse, by encouraging a new generation of suburban sprawl that sucks even more investment away from older neighborhoods like those in Gaithersburg. How can we bring this site back to life? We should look at Gaithersburg’s (and Montgomery County's) most successful residential and commercial areas: walkable, urban neighborhoods like Kentlands and Crown, both of which are built around a future transit line, the Corridor Cities Transitway.

Already, Gaithersburg has a substantial concentration of no-car and one-car households. A potential redevelopment of Lakeforest Mall could bring new jobs and investment to an area that currently lacks both, and whose residents could benefit from having access to these things close at hand.

Nonetheless, the jury’s still out on Lakeforest’s future. And I’ll miss it if it goes. As a kid, my family would drive out to Lakeforest Mall and I remember lying on a bench one evening, staring at the skylights that filled the mall with natural light, and watching the lights gradually come on as the sun set. (That’s an old trick of Alfred Taubman’s, which prevented shoppers from noticing the passage of time.) Hopefully, whatever happens next here will give people a reason to come back.