BIOSPHERE 3 Audience with/of the Mall of America

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Simon & Associates will go down in some future history as being the people who built the Mall of America near Minneapolis. Whether that feat will be seen as "good" or "bad" is of course a matter for debate. What is clear though is that Simon & Associates, and their 65 million acres of 122 malls, have changed "public space" in America to a degree to which few others can claim. Starting out in the early 1960's the Simon brothers, Melvin and Herbert, developed small track malls in and around Indianapolis and rode the wave of regional suburbanization to the heights of $600 million dollars a year in property revenue. Recently, Simon and Associates sold 45% of their mall-ownerships, the biggest IPO for a real-estate investment trust since Eisenhower signed the first REIT legislation into law in 1960. The legal question remains, however, as to how much stock one would have to own before Mall of America security could not throw you out for running around in a chicken suit.

The Mall of America, jewel of the Simon vision, is enormous. It is the kind of place which people describe in terms of how many football fields and Eiffel towers could fit inside of it. It is not just a place to shop, it is a metaphor made concrete. It IS the Mall OF America: huge, deluxe, shiny, optimistic, mundane, loud, moonbase, family-oriented, secure(d) and vastly profitable. People from the Midwest seem awed by it, people from elsewhere seem awed by their awe. The significance of its scale, and the scale of its signifcance seem to frustrate. It is the kind of place which folks describe in series of factoids, as if puny sentences need to be added together in order to approach an appropriate description for this...this...thing where they will fly you in for real cheap from almost anywhere just to shop, where they have a full-sized amusement park indoors, which is like a 51st State of America, where there are 59 million shoppers a year, that is bigger than so-many Astrodomes, which makes more money than these third world countries put together, where you could park all the cars in Montana...

The Monolith has landed, and it sells Orange Julius.

Based out of Indianapolis, where the Simon-owned Indiana Pacers play, and Santa Barbara, where the still independently-owned SPEED lives, Herbert Simon recently spoke with Benjamin Bratton.

SPEED: This issue of SPEED is about malls and airports as social spaces. I'd like to ask you what you feel to be the social role of malls in society right now? Some people talk about the mall being a kind of public space, somewhat like what the town square used to be.

Simon: Yes, that's what the country had at one time, and we're trying to recreate it. First of all, shopping itself is a social function, and it's really almost... of course there's a line between entertainment and getting some goods and services, but if that can be done in a more pleasant atomosphere and in a more entertaining atmosphere, hopefully more goods and services will be dealt with from that particular location. Mall of America was where we put in everything together, the family entertainment and the shopping, and made it truly into a town itself. Really it's not even a town square, it is a town.

SPEED: Mall of America as the first of a new kind of city?

Simon: Yeah, definitely. Some people would say that its crass commercialism, and they can say anything they want, but we have the best goods in the world, sold at the best prices, with entertainment and food from all over. You can label that anything you want, but people want good food, and they want good merchandise, and they want good access to an enjoyable atmosphere. So Mall of America's social function is a normal function that people would like to have, and so we're trying to create it. Now we're also going back to some our older malls that we've developed over the years and which might have lost some of their "tingle." We're bringing in the movie theaters, entertainment and better food; bringing them up to date. Of course the Third Wave is going to be 'how do we make these malls interactive?" We're just beginning to test that now. Eventually, I can see every mall having a hook-up to the internet, Kinko's for the small office guy, all kinds of different foods, different entertainment, and in addition, the finest merchandise. That's where I think it's going; and if not now, soon. The Interactive Mall. What that does in terms of the city thing, we'll have to wait and see.

SPEED: If Mall of America is in fact a new kind of city, how do you see the relationship between Mall, which is a very "intentional" and planned city to the city next to it, Minneapolis, which is (still, I think) publically owned?

Simon: It's just like a district of Minneapolis; but, believe me, it's the biggest tourist attraction in the area and it brings people to Minneapolis from all over the world. They come to Mall of America to enjoy all the great goods and services which we offer, and then they're already there to explore the rest of what Minneapolis has to offer. At first, a lot of people there were against it, but now everyone is realizing that it's been good for the area.

SPEED: What were those initial concerns?

Simon: (sigh) Oh, they said things like "It's too big," they called it "the White Elephant," "It'll hurt the local people, it won't help the economy, it's costing too much money." Naturally, there will be naysayers anytime you try something new and different

SPEED: One of the big differences, though, between town squares and places like Mall of America is that the latter is privately owned; and that being so, certain kinds of civil rights do not protect activities in that place. Is there any way in which malls could be better hosts for public discourse?

Simon: That's a good question. We've been actively trying to do that. Mall of America has been put on one of the final lists to host one of the upcoming Presidential debates between Dole and Clinton, and we're doing everything in our power to get that debate to take place at Mall of America. So even though we don't allow partisan politics, we can certainly play a role in bipartisan politics. Of course there are other social good-deeds that we can do in terms of....like, the environment. In fact, the Mall of America is also probably the biggest recycling plant in the country. So we are trying to be socially responsible and, you know, at the same time run a business. I'm not saying we're doing the greatest job in the world, but we're getting better (laughs).

SPEED: It was also set up as a tourist attraction which was thought at the time to be somewhat unusual. How did that come about?

Simon: It was really just adjunct to the marketing of the Mall. You aren't going to find retailing like that anywhere else in the entire Midwest. From Chicago on westward, you'd have to get all the way out to California before you could find retailing anywhere near what you can find at Mall of America. It's also completely enclosed, so considering the weather in Minneapolis, this makes it possible to have a year-round amusement park for children of all ages, and families. On top of that we've got top-of-the-line retailing. Many of our stores are one-of-a-kind and a lot of those later go on to become chains. So it's like an incubation place for new retail concepts. Don't forget, we get 39 million visits a year, so it's a good place to test out new things. So I think there are a lot of benefits to it. Tourism to privately-owned places is nothing new.

SPEED: Different than a traditional theme park though? Places like Disneyworld are also total environments where people come to shop, and where new retail concepts are experimented with...

Simon: But they don't get the kind of goods and services they can get with us. They can only get t-shirts or whatever Disney wants to sell them, high-profit items. We, on the other hand, are servicing not only the tourist market, but the Minneapolis market as well. With us, they can get all kinds of goods and services and at the best prices in the world. So we have a different function, we're not trying to get an extra high mark-up on the price like the entertainment places. So we're doing better by the consumer, they can get the touristy stuff, but they can also get stuff at the best prices. (pause) Now tell the truth, you were gonna right a negative article weren't you?

SPEED: Uh, no.

Simon: But now that I've given it to you straight, you feel a little better, yeah? (laughs).

SPEED: (laughs). Well...

Andy Holiday, strategic planner for the Simon/DeBartolo project, sees the future and you're in it. You are an "information-based retail relationship concept pathway based on trust," or something like that.

SPEED: The Simon/DeBartolo company is doing some pretty interesting things regarding bringing the traditional mall space up-to-date with the infomatic revolution in the built environment. What's the strategy?

Holiday: Ever since the advent of the Internet, there has been the presumed threat of electronic retailing on the Internet as being a competitive force that would reduce the value of real property-based retail distribution. So one of the things that strategic planners for mall developers have to think about is how to respond to that presumed threat, and maybe how to overcome it by embracing it. What is the logical way to incorporate Internet, and Intranet technology, to the benefit of the real property and the consumer population that currently visits malls? That's something that we've been working on for a long time, and we think that we've fashioned a couple of different ways to take advantage of what's happening in this shift to the true information age, and do it with benefit to our existing portfolio and build a new relationship with the customer population out there that we already have.

SPEED: How do you go about doing that?

Holiday: I think it's clear that the Internet, or its descendants, will be the information infrastructure of society, and they will be more than just connecting homes to servers, there will also have to be public space applications -- think of the Internet as the public access communications infrastructure of the future. Communication can range from data to voice to video. Just as there were private telephones in homes, there will be a home-based point-of-access to information that's out there on the net, but there will always be a place for public space access for that information infrastructure and it will have a slightly different look and feel than the home unit. By analogy, the private telephone in your home is different than the public telephone in our malls. There will be living-room based PC/televisions in the home which will be used primarily for entertainment, and then in the public, commercial context access to that lost-cost information system is going to have same and maybe broader range of services provided and its going to have a more complete technological presentation, certain fidelity, and range of options on public-based systems that you don't have in everybody's home.

SPEED: If "public space" itself moves on-line, how would that effect the built environment of physical mall structures? What happens to those kinds of places?

Holiday: I'm going to take the position that the efficiency provided by Internet systems is going to reduce the space requirements for retail institutions. Part of the justification for including entertainment tenants now, in addition to the traditional stores or department stores , we call them fashion merchants, is that the total amount of square footage in our properties remains the same, while the amount of space necessary to sell fashion merchandise is reduced. We need something to fill that space, and entertainment is one of the categories-of-use that does that.

SPEED: So people are coming to places like Mall of America not just to shop, but for the experience of being there.

Holiday: In addition to shopping, yes. As times goes on those stores will require less and less space to display and sell their wares through the efficiency of the information systems, there will be space freed-up for other applications. Now that is a trend which changes the mix of the utilization of the real space, and its also a trend which makes us think about how we participate in the information network to our benefit. One of the obvious ways that we can do that is to build an information-based relationship with the customer. That is our principal asset from one point of view. Right now, our 1 billion visits generate 16 billion in retail sales, who owns those hits at present? The retailers do. They are the ones who have the relationship. But we have the opportunity, because we are in the path of those visits, to build a new kind of relationship with the customer, we're not going to sell them goods but we will own that particular channel of communication with them.

SPEED: There is a splitting between the built or host site and the space of retail contact, and there becomes less of a difference between a Mall of America and a theme park development, a place where people come for the experience of "being there," based on a "trust" which they have with that developer, Disney or whoever.

Holiday: That's true, and they will also come to our spaces because that will be a point of public access to the information infrastructure. There will be a change, as there always has been, in the mix of purposes of visitation to a mall. It used to be that a mall was a fantastic novelty, we brought retailers who were not present in the local market, "national" retailers in say Muncie, IN. With the passage of time, the same set of national retailers that everybody knows are in every community. Because there is a same-ness about malls, there is a natural migration toward different uses. and We're just at a phase now where for the first time there is the opportunity to create a new kind of use that is based on information and electronic, interactive media which we haven't had before.

SPEED: How do you see that affecting the problem, if that's what it is, of "sameness." Some people would say that "sameness" is a form of the homogenization of culture. Are "new uses" of the mall sufficient to overcome this problem?

Holiday: As to homogenization of culture, when information is free- flowing, there is a natural trend toward homogenization (! -ed.) Free access to information, let's call it "boundary-less" access to space and to retail offering is going to tend toward homogeneity. On the other hand, one of the things that the community realizes about the mall is that it is a hub of commerce, a meeting place for a community. It is the largest indoor space, certainly on a rainy day. It's one of the places to go where a whole range of activities can be satisfied.

SPEED: The "town square" metaphor.

Holiday: Exactly. Quite apart from the homogenization, the distinctive local context which a mall delivers provides for a uniqueness of culture in the local context that you don't get from surfing the Internet from home. There's no geographic context to the Internet. There is therefore no local community, it's all based on interest group lines.

SPEED: What Usenet used to be --

Holiday: A community that is boundary-less. It is an interest based community. Its dimension is in interest, not in geographic proximity. The community context of the local region offers distinctive variance to Internet communities, because its relative to physical proximity, that is an important dimension of human community. Always has been and always will be.

SPEED: There is, however, a significant difference between a publicly- owned place and a privately owned space which may or may not serve the social function of the town square. There are civil rights and responsibilities which govern social life in true public spaces, but not private ones.

Holiday: That's absolutely true. First of all, the community context of the regional shopping center will be unabashedly commercial. The difference between free-market and public sector presence is only the difference between your choice or manner of voting. In "truly public" sectors, as you call them, the only influence you have over those spaces is in your choice of elected representatives, and you are by the way forced to pay for that infrastructure in the form of taxes. Where the government's ownership is coercive, ours is voluntary. In the free- market context, you vote with your dollars and choose by attendance and expenditure, whether or not to support that particular environment.

SPEED: On the other hand truly public spaces don't have private security forces. There are constitutional --

Holiday: You have to admit that there are a lot of services which can be provided in the commercial context which cannot by provided by public sector. Our job is to provide as many as possible, and to provide them in an entertaining environment. Our social function is hopefully to make the retail information infrastructure as entertaining as possible.

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