THE old Rackspace headquarters was stuffed to the gills. In 2007 the company, which offers cloud-computing and web-hosting services, had more than 1,000 employees in downtown San Antonio. People were crammed at folding tables in the hallway. They often had to go to a different building or shuttle around the lifts to talk to people in other departments.
Still, when Graham Weston, the company’s co-founder and chairman, suggested that they move into a shopping mall, staff were sceptical. The mall was vacant. Its site, the encircled suburb of Windcrest, was slightly grotty, not least because of the huge dead mall right off the highway.
Building a campus from scratch, however, would have taken several years at least. Anyway, the place was cheap. “Nobody wants a mall any more,” says John Engates, the chief technology officer. Except Rackspace, and others like it, who have come to see a dead mall as a blank canvas. In 2008 it opened its new headquarters, and won a prize for community economic development. Now it has more than 3,000 workers on site, with plans to hire hundreds more by the end of the year.
Plenty of enclosed malls are, of course, still thriving. And after several abstemious years, shoppers are perking up. In February, according to the Commerce Department, retail sales were 1.1% higher than they had been in January—higher than expected, and a welcome sign of recovery.
But many American malls had run into trouble before the recession started, and the country’s nascent recovery is not likely to revive them. America’s retail sector is probably overbuilt; in the fourth quarter of 2011, according to the National Association of Realtors, its vacancy rate was 16.9%. Malls are vulnerable to systemic shocks; if an “anchor” stores closes, or if vacancies linger, other vendors quickly suffer. And many of the malls that were built in the heyday of the genre are starting to look shopsoiled. The new fashion is for mixed-use developments, or the outdoor malls that are designed to look like a friendly downtown shopping district. In some cities, people are returning to actual downtown shopping districts, as new urbanists always dreamed they would.
The result is that even if Americans are heading back to shops, they may not be heading to malls. That has left many cities and suburbs with dead and dying malls on their hands: boxes of blight surrounded by acres of hot asphalt.
Some of these will be used as canvasses for graffiti. Some will be razed. Others, happily, will find another purpose. One strategy is to turn the mall itself into a mixed-use development. The Natick, a high-end mall in Boston, has added condominiums. Another idea is to bring in unconventional tenants. In Cleveland, Ohio, part of a mall has been given over to indoor gardens, with the idea that it might be a model for other urban agriculture programmes. Schools and universities are another settler group. The University of the Incarnate Word has leased part of another mall in San Antonio. Vanderbilt, in Tennessee, has leased some space to open a clinic; patients are given pagers so that they can get a snack from the food court while they wait. Hundreds of high-school students in Joplin, Missouri, are taking classes in a converted mall after the town’s high school was destroyed in a tornado last summer.
These projects may be more sensible than enclosed retailing. Universities and offices do not depend on passers-by as shops and restaurants do. But turning these spaces to fresh purposes requires some expense and experimentation.
Rackspace, for its part, has spent more than $100m gutting and redoing the space. Windows were carved into the walls, and skylights installed. Workers were getting lost, so the conference rooms are now grouped by category rather than numbered. If someone makes it to the game-show zone, he can usually figure it out from there. There is, at the moment, an internal debate over whether to preserve the fountains. Allan Nelson, the facilities manager, warns that overenthusiastic “Rackers” would try to go swimming in them.
And the idiosyncrasies of the space have spurred some creative thinking. Freestanding conference rooms adorn the walkways, their glass walls cut from the old shopfronts. A loading dock has been converted into a presentation room, with a rolling industrial door so that groups can spill over outside. Workers can take a break from their desks to work at a bistro table, or check in at the human-resources kiosk, or play catch in the vaulted interior. “I don’t think people think about it as a mall any more,” says Mr Engates. Some might think about it as an example. (credit The Economist)