on Nov 1st, 2015

The local media thoroughly covered the City of Greenwood’s announcement that it had finally secured a developer for the site at the southeast corner of the I-65/County Line Road interchange—a tract where numerous proposals had come to light, most prominently featuring a Cabela’s. But, time and time again, none had materialized…part of the aftermath of the sour economy. Well, as of October 28, Gershman Partners announced its plans to develop the tract into over 700,000 square feet of retail.

The announcement did not include any primary anchor tenants, suggesting that at this point it remains a spec development. However, rumors of Costco are inevitable, considering the wholesale giant currently lacks a presence on Indianapolis’ south side. In a press release, Gershman cited the favorable demographics, indicating that Johnson County is the state’s third fastest growing and that nearly 100,000 motorists will pass by the site each day, coming along I-65. The mayor of Greenwood also heralds the announcement of this new “Greenwood Town Center” for its ability to “spur additional growth in an already strong market.”

I hate to create such a negative-Nancy blog post, but you can already tell where I’m going with this. Greenwood may be growing at a decent clip, but it’s not Fishers, let alone Gilbert, Arizona. Without doing the math, I speculate that it’s in the top 30% of all counties, when ranked by population growth. Commendable, but hardly formidable. So why does Greenwood need a new shopping district more than half the size of the regional mall, which sits just two miles away?

It doesn’t. History has proven time and again that, as soon as one new development opens its doors, another one within a five-mile radius begins a steady and generally incorrigible decline. So, once the Gershman proposal ushers in its new tenants, how many will be genuinely new to the region, and how many will simply migrate to the shiny shopping Shangri-La?

Here’s a map of Greenwood with the proposed development site (indicated by a blue asterisk), as well as four other commercial nodes, ranked from what I perceive as most to least vulnerable to “retail cannibalism”. It doesn’t take much to speculate how market machinations will affect the environment.

Node #1: The retail regiments on the “front lines” of the assault are, unsurprisingly, the ones closest. Just on the other side of the County Line Road/I-65 Interchange, at County Line and Emerson Avenue, sit two other shopping centers: one fairly old on the Indianapolis side, with a Kroger as the anchor, then two on the Greenwood side, with Walmart, Gander Mountain and Goodwill as respective anchors. Of course it’s possible that these tenants are in long-term leases at their current locations, but what’s to stop them from breaking those leases if they think they can recoup their costs by shifting to a fresh new building that will attract people simply out of novelty? We’ve also seen examples where Walmart does this, abandoning its 1980s-era, blue-gray outlets for a newer, bigger supercenters a mile down the road. And, from the looks of things, it’s already underway: based on an August 2015 Google Street View, Kroger is breaking ground on a new site at the northeast corner of County Line and Emerson, directly across the street from the old location on the northwest corner. Once construction is complete (if it hasn’t finished already), Kroger will inevitably close the old location, leaving yet another underutilized strip mall with orphaned in-line tenants…most of whom will undoubtedly look to relocate to a more lucrative location. Greenwood Town Center, perhaps?

Node #2: The busy intersection at Southport Road and Emerson Avenue hosts shopping at all four corners, but the strip mall on the northwest corner is the largest and probably the most vulnerable. Southport Commons features several major anchors, along with another dozen in-line tenants and outparcels. This node also attracts a considerable number of downtown dwellers, whenever they need big-box shopping at Target or one of the others. It’s just a 12-minute car trip down I-65 to this busy retail intersection. The visibility of these storefronts is far superior to their access, exclusively on the overloaded Emerson Avenue, with awkward ingress points like this one.

Despite the problematic site design, the shopping hub still thrives, thanks to stability of the tenants in the area. We’ve got Menards and Meijer, the Midwest’s powerful competitors to Home Depot and Walmart, respectively. Target is already spoken for; Home Depot is there too. But, in the area of floundering J.C. Penney and Macy’s, Southport Commons also claims what has my vote as the most consistently well-managed national department store chain. Kohl’s is another quintessential Midwestern stalwart: low-key, unassuming, resilient. But the leadership at Kohl’s is particularly shrewd about where to locate their outlets, usually not directly affiliated with conventional malls, but often very close by. The proposed Greenwood Town Center would kill for a tenant like Kohl’s, but it would probably come at the cost of the one in Southport Commons, just two miles away. The last and subtlest vulnerability of this shopping hub is that Emerson Avenue also serves as a township line, and to the west of Emerson is Franklin Township, an overwhelmingly residential jurisdiction within the Indy city limits that has very little taxable commercial properties in its boundaries. Thus, residents must pay particularly high taxes to support the Franklin Township Metropolitan School District, and the departure of a major player like Meijer, Staples or even Panera Bread would only exacerbate the situation. While it has been the choice of Franklin Township residents to maintain a “rural quality” at a relatively high cost, they would likely have little say if the few retail tenants on their side of Emerson Avenue fled south to this new development.

Node #3: This is the granddaddy of them all: Greenwood Park Mall, the site of a shopping district since the 1960s and fully “mollified” in 1980, is one of the five largest in the state, at nearly 1.2 million square feet of space. Needless to say, its retail tentacles extend far beyond the southeast corner of U.S. 31 and County Line Road, but the highest concentration of activity remains at this prominent site.

For those of you who aren’t as obsessed with mall culture as I am, 1) good for you! and 2) you don’t know how significant Greenwood Park Mall is, when placed in a regional or even a national context. I extolled its virtues in two blog posts way back in 2010, and, though I’m not in Indy much these days, I feel confident that it’s still chugging along nicely.

The powerhouse mall has five anchor tenants—six if you count the Barnes and Noble in the outdoor portion—and all are occupied. In this day and age, that is an achievement in and of itself: many malls with space for four anchor tenants have at least one vacancy. Not only that, while its counterparts Lafayette Square and Washington Square have fallen into oblivion, Greenwood Park has actually grown more powerful and even slightly more upscale in recent years, claiming such tenants as Coach, Sephora, White House Black Market, and coveted restaurants like Cheesecake Factory—all of which would have been unthinkably highbrow (or at least upper-middlebrow) for this very middle-of-the-middle part of town, back when I was growing up in the 80s and 90s. A Simon Property Group mall (like just about everything in its Indy corporate headquarters), it attracts crowds from throughout south-central Indiana on weekends. It weathered the massive department store consolidation around the turn of the 21st century that resulted in the absorption of local shopping institution L.S. Ayres. It thrived when an adjacent mini-mall directly to the north (Target Square Mall) imploded after the departure of its anchor, Target. In short, it has prevailed at the level of the top 10% of malls that cater to a middle-income market. But, with the Gershman proposal at Greenwood Town Center, it will have competition two miles to the east, on the same road, at a site with much higher visibility. Although this node may be less vulnerable than the first two listed because of its sheer size and history of strong management, it would be ludicrous to assume that the new development won’t compete with Greenwood Park Mall. After all, immediately to the south of the mall is another Kohl’s. What’s to stop this successful chain from consolidating its impact by locating at the highly visible Greenwood Town Center, thereby closing both the locations at Node #2 and Node #3? Why shouldn’t Von Maur or Macy’s move, for that matter?

Node #4: By far the smallest node, this offers a different retail typology than the others. Why? Because it is the real Greenwood town center—the historic main street, from when Greenwood was an agrarian satellite of Indianapolis. This two-block corridor has long sat in Greenwood’s margins—geographically, economically and in the minds of its inhabitants.

The City allowed the entire southwest corner to get demolished decades ago, for a parking lot. Urban Indy has covered the iterative attempts to revitalize Main Street, like this one, with increasing sensitivity to the architectural heritage. (The earliest proposal in 2011 involved widespread demolition, placing downtown Greenwood on Indiana Landmarks’ list of the 10 most endangered historic places in the state.) More recent plans show superior effort at preserving the rural main street character without letting the pedestrian access get subsumed by traffic planning. That’s well and good, but why would the City greenlight a faux town-center proposal that will mimic the character of a main street, at the same time that the original center of Greenwood is finally starting to assert itself as a potential southside hub for innovative local dining? Maybe Main Street Greenwood will succeed on its own right, offering locally-owned restaurant and retail options as a counterpart to the chains at Greenwood Park Mall or this new contender. But if Main Street flounders, who is willing to bet that the prevailing culture will blame it on a lack of off-street parking?

In spite of all the clear evidence that this new retail proposal isn’t a good idea, I don’t intend to don these boxing gloves much longer, lest I seem opposed to competition, which is really what the Gershman proposal offers. And I’m hardly wanting to flog Gershman Partners any further; it shows all evidence that it’s a smartly run company that balances these suburbanizing mega-projects with smart urban infill, like the redevelopment around the Marott Center on Mass Ave, which Urban Indy has covered in the past. Good for them.

What this proposal demonstrates, whether it succeeds or not, is a prevailing weakness in American consumer culture. America is already the most over-retailed country in the world, and it’s not just due to high incomes and comparatively lax land-use regulations. Fundamentally, Americans respond more positively to shiny new things than they respond negatively to what gets left in the wake—the abandonment. Or else they catch abandonment amnesia when the next glossy package comes along. All a retail developer needs is 10-15 years of successful tenancy to reap solid profits—which is about all they can expect when depreciation life cycles are so brief. After that, the strip mall/lifestyle center/power center will lose its luster to something newer that’s three miles down the road, and it will decline to desuetude. The developers, the chambers of commerce, the civic leaders—all the people orchestrating retail’s superfluous proliferation—they would accomplish nothing if they weren’t simply meeting the perceived demand of the average American consumer. And, to top it all off, this average American consumer is shifting ever further from bricks-and-mortar all along, as more and more people meat their goods-based retail needs on the internet. If this trend continues, nodes 1 through 4 may decline even without a new greenfield development; after all, how many restaurants and day spas can we continue to support?

My strongest alternative solution in this Greenwood example would have been to push more heavily for a mixed-use result at I-65 and County Line Road, which at least would have counterbalanced all that retail with residences or office-based commercial. (It still would likely pull tenants away from the other nodes, but at least it would have contributed to a net densification of population/incomes in the region.) As it stands, the best that can be said about our relentless cycles of retail death and life is that they offer numerous options for creative reinterpretation of the landscape for generations to come. And, for all its wasteful consumerism, America also succeeds magnificently at creative reinvention. Just compare the Indianapolis Town Center—the Mile Square—from where it was twenty years ago.