The mere mention of the words “vertical mall” is enough to start a debate. Can a developer afford the higher construction price tag? And the costs are particularly high — and the design particularly tricky — when adding other mixed-use components to the project, as is often the case in urban infill. Structural steel prices alone have risen as much as 50 percent in the past year and more concrete is also needed. And what about dealing with air rights?
But with greenfield sites all but disappearing and urban redevelopment heating up, mall builders are increasingly looking toward the sky. The latest project is the $1.7 billion Time Warner Center, which continues to stir up controversy, though the project's early results indicate Related Urban Development, part of The Related Cos., did a lot of things right (see story on page 12).
Less controversial, but nonetheless noteworthy for its ingenuity, is Atlanta's Tech Square at the Georgia Institute of Technology, where, as part of a 13.3-acre mixed-use research development, retail space, including a 55,000-square-foot Barnes & Noble, is topped by classrooms. Another example: Midtown Square Mall in Charlotte, N.C., which has a 15-story condominium tower atop a Home Depot EXPO Design Center and a Target. Developer Pappas Properties LLC, which won a $17 million, 10-year tax break for the projects, also plans to include restaurants and two parking decks.
Because each vertical mixed-use development is unique and expensive, good stewardship and deep pockets are required to get a project completed. Though many vertical malls get to the drawing boards, few actually make it to construction. “What usually prevents these from happening is the cost,” says James Auld, a partner at Altoon + Porter Architects LLP, which designed Taman Anggrek Mall and Condominiums, a 46-story mixed-use development in Jakarta, Indonesia. Buying more land (when available), he says, “is usually cheaper than stacking two uses on each other.” The massive Jakarta center includes everything from a Marks & Spencer store and a Starbucks Coffee outlet to an ice-skating rink.
Most of the U.S. projects are in cities, where construction can cost as much as 70 percent more than the $60-a-square-foot average in the suburbs, says David Manfredi, a principal at Elkus/Manfredi Architects Ltd His firm designed the 3.5 million-square-foot Copley Place in Boston.
Mixed-use design is more complicated, because each of the potential uses — retail, office and residential — requires their own support system. For example, a mixed-use development with restaurants must build a separate exhaust system and grease pit. Plus, each use is subject to different building codes.
Integrating the systems often leads to creative design solutions. When Elkus/Manfredi designed the 730,000-square-foot mixed-use 500 Atlantic Avenue in Boston, which houses retail, residential and hotel space, they placed the major exhaust shaft through the center of the building. “That's something you'll never find in the suburbs,” says Manfredi. “But the view and location are so terrific, that it makes the building more viable and we can afford to do it.”
Often, it's hard to integrate a vertical project into a neighborhood, says Howard Elkus, cofounder of the architectural firm bearing his name. Copley Place was especially complicated because it was built 30 feet above the surrounding streets over turnpike off-ramps and commuter lines. “It was the most challenging air-rights project in the world,” he says. “We had to somehow get people up in the air.”
Entranceways and walkways were created to move people through the project with retail actively engaging visitors along the way. Creating active edges along the project, where human activity and retail mix together, also was important to the project's success. “We had to make it appear that people would observe it as part of their natural pedestrian flow,” says Elkus.
Integrating the project with the neighborhood is essential to winning community approval in face of the growing “not in my back yard” syndrome. While consumers may enjoy the opportunity to shop near their homes, they don't want the disruption, traffic and obtrusive design the projects might bring. When McCaffery Interests Inc. was seeking approval for its mixed-use Development Market at Common Clarendon in Arlington, Tex., company officials had to endure 65 public meetings.
Neighborhood compatibility is one of the keys that makes the five-level 335,000 square foot shopping and entertainment complex known as Pacific Place in Seattle a success, say analysts. The storefronts and exterior design assimilate the project into the downtown neighborhood. Small outside stores provide entrances for shoppers into the larger mall where a 12,000-square-foot atrium bathes the center in natural light. Once inside, shoppers enter a loop that connects the department stores to the upper floors. The fifth floor features an 11-screen theater that can be accessed via a separate escalator.
The project, developed by Pine Street Development, cost $175 million to build and has built a strong track record in the six years since opening. Luxury retailers, such as Cartier and Tiffany & Co., populate the project's lower floor. And the project is part of a larger district of upscale retail that has been built in the city. Nordstrom opened a new department store across the street from the project and other upscale boutiques pepper nearby streets.
The key to success in any urban, mixed-use project, great or small, is to properly incorporate all of the components so they create a seamless whole. “You have to build it in such a way that the uses stand-out, but at the same time contribute to the synergy of the project,” says Tom Porter, a principal at Thompson, Ventulett, Stainback & Associates, the Atlanta firm that designed Tech Square.
The proper mixture of different uses is what makes the Time Warner Center succesful, says Manfredi, whose firm designed the retail and ground floor levels of the project. “Every single one of those uses is significant in its scale,” says Manfredi.
Shoppers enter the retail shops at street level, where visitors can take the escalator to more shopping and then up to the fourth floor where restaurants and the new Jazz at Lincoln Center reside. Residential and office space also have their separate entrances, but are easily connected to the cultural and retail uses. Whole Foods sits on the ground floor.
Retail Makes It Work
Although only 10 percent of Copley Place was retail, Elkus says it's enough to make the project work. “If you ask the layperson what the project was all about, they will tell you that it is the retail that makes it a great center,” said Elkus.
Peter Pappas, president and managing partner at Pappas Properties, says his firm puts the most attractive retailers at ground level. “We feel if we can get the right tenant mix on the first level then we have an opportunity to get additional rent on the properties.”
The real difficulty comes in layering hotels or residences on top of retail with parking below. For example, a typical residential unit in a mixed-use project can measure 24 by 27 feet, says Manfredi. But stores tend to have larger dimensions, which make it difficult to design structural systems, especially since most retailers want unobstructed views within their stores.
When Altoon + Porter designed Taman Anggrek, it placed 3,200 condominiums on top of a parking deck, which itself was on top of a 1-million-square-foot shopping center. How did the builders create a viable shopping center that can also support the above parking and condominiums? “It's a lot of concrete,” says Auld.
To support the residences, a project has to feature a heavy horizontal load, a support beam, on top of the retail to carry the residences. Such a heavy “transfer point” is expensive and requires more materials, such as concrete, the price of which has been rising (and in some regions, like the Southeast, has become increasingly hard to find).
“For many of these projects, the developers believe there is one part of the vertical mixed-uses that drives the project,” says Auld. “Often times, the column grid and the structural spacing are led by the main driver of that project.”
If the main feature of a project is office space, an architect designs column spacing on a rectangular grid, which works well with underground parking. However retailers on the ground floor usually prefer square-like column spacing.
“The good news is that in these urban project retailers are getting more flexible about their column dimensions,” says Auld.
Retailers can be sensitive about these structural issues, like water pipes from upstairs apartments and columns running through their space, but in the end it's hard to argue with the opportunities that being in mixed use projects provide. “I tell retailers ‘Isn't it great to be a block off Michigan Avenue and have 177 residents above your shop that you can access’,” says Edmund Woodbury, vice president of McCaffery Interests, which also is developing the Bernadin apartment complex in Chicago. Due to such considerations, McCaffery was able to sell 25,000 square feet of retail on the ground floor of the 171-unit project.
“The end gain of all this is that the retailers have higher sales and the owners get good returns on rent,” says Woodbury. “It's not about the pain.”