Is The Mall Dead?

There's something growing in the New Jersey Meadowlands, the marsh just nine miles west of Manhattan—and it isn't the gentle ferns that the bucolic name suggests. Instead, what's emerging is a man-made behemoth, the largest and most expensive mall ever built in the United States. Originally slated to open this month, Xanadu is now scheduled for completion next summer. Lawsuits, political grandstanding and construction delays have nearly doubled the mall's cost to $2.3 billion. When it's finished, the half-mile "retailtainment" center will be a Vegas-meets-Disneyland pleasure dome with the country's tallest Ferris wheel and first indoor artificial ski slope. There will also be a two free-fall skydiving jumps, indoor surfing, a mini-city for kids, a digital media river on the ceiling—and, oh, some 200 shops.

The scale and scope of the project would be breathtaking in its own right. But what makes Xanadu extraordinary is the fact that it is emerging just as the American mall—that most quintessential of American institutions—is in its dying throes, if not already dead. Moribund malls have not gone unnoticed amongst industry analysts and Web sites like Deadmalls.com that feature photos of hundreds of now-abandoned sites. But what were once just worrying signs appear to have finally flat-lined. Last year was the first in half a century that a new indoor mall didn't open somewhere in the country—a precipitous decline since the mid-1990s when they rose at a rate of 140 a year, according to Georgia Tech professor Ellen Dunham-Jones, coauthor of the forthcoming book "Retrofitting Suburbia," which focuses on the decline of malls and other commercial strips. Today, nearly a fifth of the country's largest 2,000 regional malls are failing, she says, and according to the International Council of Shopping Centers, and a record 150,000 retail outlets, including such mall mainstays as the Gap and Foot Locker, will close this year. Xanadu, whose officials declined NEWSWEEK's requests for comment, has named just nine tenants for its 200 spaces.

So what's the cause of this malaise? After all, malls have been part of the national landscape for more than 50 years, spawning their own indigenous culture (mall rats), native cuisine (Cinnabon) and home-bred pop sensations from Tiffany to Timberlake. Prior diagnoses have pinned the mall's decline on retail cannibalization, the repopulation of cities and suburban gang problems. The current economic skid certainly isn't helping to fill shops and attract vendors.

"The mall at the end of town is dead. Amen," says Bill Talen, a.k.a. Reverend Billy of the Church of Stop Shopping, a secular movement dedicated to exorcising consumerism from everyday life. The reverend's tactics may be unusual—he's been known to leap on shop counters in order to "exorcise" cash registers—but his message of modest spending is increasingly mainstream. This month's Buy Nothing Day—an annual holiday from shopping sponsored by Adbusters magazine (it's the day after Thanksgiving)—is expecting to attract millions of participants, according to Kalle Lasn, the co-creator of the event that is now in its 16th year. His magazine, meanwhile, has grown from a local Vancouver zine to a $9 international glossy that's mainstream enough for Whole Foods supermarkets, and it has more than 100,000 paid subscribers.

Just as people are flying from malls, many are landing at a series of offbeat, alternative trading posts. The Salvation Army has seen sales jump 15 percent at some locations, while The Freecycle Network, a clearing house for second-hand goods has grown from 40 people to around 6 million since its founding in 2003. Each day, the group says, it keeps 500 tons of stuff out of landfills and in use. Another second-hand movement, known as The Compact, where members commit to buying nothing new for an entire year (underwear excluded), has grown from 10 friends to 10,000 members since 2004. Even those who are still buying new are viewing shopping through a changed lens: almost 40 percent of people between the ages of 18 and 30 prefer to use brands that are "socially conscious"—environmentally safe and produced through fair labor—according to research by Alloy Media and Marketing, a youth-focused ad agency.

"It's about manners," explains Donna Daniels, a former Duke University anthropologist now at Iconoculture, the retail consultancy. For years, she and her colleagues have been tracking the rise of what they call the "socially frugal" consumer class—people who buy less to escape attention and respect the constraints of others rather than because they have a cash-flow problem. Other experts, including pollster John Zogby, point to a "great transition" in the needs and expectations of average Americans, particularly those under the age of 30. In his recent book, "The Way We'll Be," Zogby argues that the same people who might well have become mall rats just a few years ago are learning to "make do with less and find a subdued peace in the process."