A Very Untidy Future For Cities

Believe it or not, we spent two weeks in Southern California on vacation. I live in Northern California and to tell someone that you are, willingly, going to SoCal for pleasure, is for a Californian to admit to voting republican. It is something that one doesn’t, in polite liberal company, admit to. But LA is cool, damn cool in fact – especially when the weather is great (as it was).

We did something that we’ve never done, drove Highway 1 from Carmel to Malibu, with a stop at San Simeon and Hearst Castle. I recommend it, take the main house tour, that’s the best. It is an interesting introduction to the southern half of California. Fake opulence, decorative arts bought in pre-war Europe at cost, the buildings faux interiors from gutted churches plundered by Franco to pay civil war debts, damn it’s just like a lot of Los Angeles. They even have an English left-over cruise ship.

I digress. The real purpose of this missive (I apologize for my intermittent posts – been too busy with my other books), is the remarkable change in ground transportation I saw everywhere. It is the age of the Chinese-made scooter, bicycle, mini-bike, and their innumerable variations based on who the service provider is. There’s an app for that – literally. 

San Francisco and other major cities have been at war with themselves over these devices. The reason for objections and even down right hostility is said to be safety. My take is that the cities are uncomfortable with the idea of being partners with a profit-making venture that literally reminds me of herding cats. You can buy one at Costco for about $500, at $2.00 a mile rent to the provider you can see it doesn’t take long to make a profit.

I first saw them in quantity in Santa Monica, the have overrun Venice, and filled the corners of intersections in Long Beach – they are everywhere. Get the app, hold it over the device, get on board, and go. Then you are supposed to return it to a company run (Lyft, Lime, Jump, Spin, and dozens of others) holding area. They will be collected that evening and recharged. I did forget to mention that all these devices are battery run and motorized. You pay by the miles traveled, it’s billed to your credit card, all you do is jump on and drop it when you get there. And I mean drop, we saw them in the gutters, hanging from trees and fences, and stacked like so many discarded bits of junk.

 

The use rate is not cheap, $1.50 to $2.00 per mile. But it is better than walking. Most people probably don’t go more than a mile or two, use them to get from here to there. They don’t mix well with pedestrians, so I saw a lot of scooters in the street – and they don’t mix well with cars.

As with everything they are being studied to death. I’m guessing every major city in the world is dealing with this, and spending big bucks, dinaros, pesos, euros, pounds, francs, and yen trying to justify their use and place on their city’s streets (and mostly how to tax the blighters). I wonder what it would have been like if the automobile had been so heavily studied in 1900 when they first arrived (I’m guessing horses would still be popular). There are many similarities.

I’m old. For me to put my feet or butt into or on one of these machines would be a frightening experience. I envision twisted arms, scraped knees, broken wrists, and scarred foreheads. But in Venice and Venice Beach it is the wild wild west of scooters – there had to be thousands everywhere, and they were being used, everywhere. I get it. One more reason not to walk, one more reason not to enjoy the scenery (not when trying to avoid SUVs, buses, and trucks), one more reason to nickel and dime your way to poverty (I exaggerate).

In today’s society it seems that we have come to this: how can I create and then become a service provider of a cool company, so I can skim off a few pennies from my fellow citizens, and all willingly given. There’re cell phones, fuel surcharges, service surcharges (San Francisco’s famous tax on health benefits for waiters), and now scooters and bicycles. At the end of the year I wonder how much this all adds up to.

I’m trying not to act old—just sound old and wise. That’s my prerogative, and as a soon to be septuagenarian, I stand guilty. I remember tiny black and white tvs, aluminum foil antennas, the folk’s first car with air conditioning, Ed Sullivan, transistor radios that would fit in you hand, the change from wooden golf clubs to metal (and now exotics), The Rolling Stones before the wrinkles and heart operations, and when you would actually dress to go out to dinner.

Style, class, propriety, good command of the English language (and quality swearing, not the crap that’s employed today that passes for conversation), proper manners, the ability to use a fork (damn, just look around you at any restaurant), and most critically, civility. That’s where the downfall of this new transportation will fail, cities will outlaw them because the users would not follow the most basic rule of any human community – “Clean up after yourself.”

I love all the new stuff: the interconnectivity of Apple devices, the instant communications, car interiors nicer than my own family room, unfettered access to goods from around the world, my Keurig coffee machine (greatest invention of the 21^stcentury – so far), Amazon and self-publishing, and statin drugs (see above). I’m waiting to see if this fake meat thing is real.

Stay tuned . . . . . . .

The Re-Malling of America

A couple of very interesting developments over the last few weeks may significantly shake up the retail mall industry in the United States. The first of these is the hostile bid by Simons Property Group of Indianapolis, Indiana to take over The Macerich Company of Santa Monica, California. Between them they own and operate over 425 malls and retail centers in the United States and foreign countries. (Macerich – 95 properties and Simons – 325+ properties, source Wikipedia). I would venture to guess that 90% of Americans are less than one hour away from one of their respective centers. The second and even more fascinating is that the Edmonton, Alberta based Triple Five Group that owns the Edmonton Mall and the Mall of America is proposing a 4 billion dollar super, humongous, enormous, colossal entertainment and retail “mall” near Miami.

I have been directly involved in one form or another in the mall design business since the days of Alfred Taubman in the 1970s. Then some of the most exciting changes to the retail industry were underway. And many of these changes wrought terrible things on towns, peripheral suburban communities, and even downtown traditional retail centers. This is not the place to get into the history of malls in America (and elsewhere), but it is the place to look at how the forces of the marketplace consumer seem to be one step ahead of the retailers and mall owners. We went from small town America, to mid-sized suburban shopping centers, to enclosed weatherproof malls and super-malls, to massive retail centers with a mix of enclosed and open pedestrian areas, to remodeling the traditional downtown, to massive failures due to high debt by some of the largest mall owners (example: General Growth Properties), and now to the restructuring of both the mall concept itself and the companies themselves.

The biggest change seems to be in the venues themselves. Most enclosed malls were isolated at their start, primarily due to location (freeways) and cheap land costs. These were the 70s and 80s, now these malls are surrounded by residential development as well as ancillary retail and office complexes. Some have even sparked “new towns” around them. These malls are redeveloping to now include housing and office uses.

Some are beginning to emulate the entertainment aspects of some of the larger malls. While questionable, if there are enough customers many things are possible.

Why would Simons want Macerich, I have my own ideas? Simons has been very aggressive in trying to increase its square footage. Five years ago during General Growth’s serious financial problems, Simons tried unsuccessfully to take over the company, eventually they walked away. Simon has properties in Europe and Canada and have aggressively expanded into the premium outlet market. Macerich, while having some outstanding properties (Santa Monica and Walnut Creek, California), is also a developer/owner of mid-sized sub-regional centers across the United States. These properties would complement Simon’s collection. Whether Macerich can fight off Simon as well as General Growth did remains to be seen. The concern is that the customer will suffer if these acquisitions go forward is of little concern. The customer is, and has, shown itself to be fickle and will go where there is the best value, venue, and variety to shop. Failure to provide this is not an option. My guess, it is the long-term leases of many of the high-end retailers located within the Macerich centers (Nordstrom, Niemen Marcus, etc.). GO HERE  

But, Triple Five’s direction is totally different. GO HERE  To used an over-worn phrase, the are trying to Disneyfy the retail experience. Their new Miami complex will include a ski slope, a water park, a sea-lion show (not in favor of these myself), miniature golf, bowling, as well as everything from the usual restaurants, hotels, and condominiums. There is even a rumor there will be retail stores and shops. Wow and double wow, the fun and games of the retail giants of Minnesota and Edmonton Central Plains of North America are coming to South Beach. Many of these enticements have been tried before, especially during the late seventies with circus type retail malls and themed venues (skating, park-like spaces, and roller coasters). Most failed or were junked.

I have also found that these centers can never create a new market. They can only steal customers from other markets; this is what caused many of the suburban problems in the 1980s when the enclosed mall did so much damage to the traditional downtowns of smaller communities. These things are very expensive, I will wait to see if they can find the funding.

And lastly the big can get bigger. It was announced that the “new” General Growth (after its literal resurrection for the dead three years ago), is expanding its flagship mall in Honolulu.  GO HERE  Its Ala Moana Center (the world’s largest open-air mall) is expanding by another 660,000 square feet. They also sold a significant interest in the mall to an Australian retirement fund, AustralianSuper. While Ala Moana is not performing to industry standards, GGP is obviously seeing a different future than what many analysts’ see. The world is flooded with money at the moment trying to find a home; many are betting that the American REIT industry is one of the best places to be. I wish them luck.

Stay Tuned . . . . . . . .