At State Avenue and I-635 in the heart of Kansas City, Kan., you will find a monument to political and business hubris — and a warning for the future.
The Indian Springs Mall once sat at this intersection. Two years ago, two decades after it began to lose shoppers and tenants, it was torn down.
Now it’s little more than 100 acres of gravel and concrete, a massive blemish in the heart of the community. Plans for building something else have come and gone. No one knows quite what to do or how to pay for whatever might be done.
“I know it’s frustrating for the community,” said Jon Stephens, economic development director for the Unified Government, who is working to find a project for the site.
The demise of the regional shopping mall is now such a common story, it’s close to banality. The local list continues to grow: Bannister Mall, Metcalf South, Mission Center Mall, the Great Mall of the Great Plains and Metro North have been closed, re-purposed, rehabbed.
On Tuesday, we learned the Independence Center mall faces foreclosure. Its owners apparently were unable to redeem $200 million in debt. Prairiefire, a shopping district in south Overland Park, also has struggled.
All of this came to mind last week when retailer Nordstrom said it will leave Oak Park Mall in Overland Park in 2021 and relocate to the Country Club Plaza.
The mall’s owners kept stiff upper lips, promising to find new tenants. But the pressure on retail brick-and-mortar stores is enormous and will only be worse three years from now. I know, it’s impossible to imagine an empty Oak Park Mall. It was impossible to imagine the end of Metcalf South, too, or Indian Springs. Yet both were torn down.
There are important lessons here for local leadership. It’s almost forgotten now, but Overland Park spent nearly $10 million to subsidize parking and other improvements to lure Nordstrom to Oak Park Mall.
The city’s bet probably paid off — Overland Park gets serious sales tax revenue from the shopping center. Generally, though, giving incentives to retailers is a loser’s game for the metro as a whole because new stores don’t bring many new buyers. They simply take them from other stores.
The result? Tax revenue shifts from city to city, but few new dollars end up in city treasuries overall. It’s called the “substitution effect,” and it means public retail incentives end up harming taxpayers.
The trend will only accelerate as more buyers opt for Amazon and other online alternatives. There is general agreement: The idea of a regional destination mall, which brings in shoppers from small surrounding communities, is likely gone forever.
That makes planning now for the future imperative. Overland Park and private developers must start thinking about what might happen at the Oak Park Mall site. That process should include contemplating the shopping center’s eventual demise.
That doesn’t mean paying off new retailers. It means making decisions based on an understanding that an eventual transition to other non-retail uses may be inevitable.
That reality should inform decisions on other suburban projects, such as the Brookridge proposal nearby. If Brookridge is used for homes and offices, what might be left for Oak Park?
The stakes are high. If Indian Springs can close, so can Oak Park. And if Oak Park can close, so can other retail attractions — even, say, the Country Club Plaza, where Nordstrom is headed next.
Ludicrous? No. There’s no inherent reason retailers on the Plaza would be immune to the pressures felt by other stores at other malls. The Plaza’s mix of restaurants and taverns makes it a destination now, but that could change quickly.
The Plaza is more fragile than most Kansas Citians know. That means Kansas City must be proactive now and link policy decisions in other districts to a coming transition along Brush Creek.
The alternative, we know, is 100 acres of gravel and concrete.