Plans for a $4 billion retail and entertainment center was overwhelmingly approved by The Miami-Dade County Commission last week, the Associated Press reports.
"American Dream Miami," developed by Canadian conglomerate Triple Five, will feature shops, restaurants, hotel accommodations and amusement park amenities like an indoor ski slope, according to the report. Triple Five didn’t immediately return Retail Dive’s request for comment.
Set to cover 175 acres near the protected Everglades National Park, the project would eclipse the Mall of America in Minneapolis in size and scope to become the largest in the U.S., according to the report. But it still must garner 32 local, state and federal permits and address concerns about its effects on the environment and congestion.
E-commerce, technology, changing demographics and changing attitudes, plus decades of building too many second-rate malls have culminated in a tipping point for retail real estate development in the U.S. From 1970 to 2015, mall growth accelerated by 300% and retail think tank Coresight Research estimates that nearly a third of them need to be closed, mostly in the lower-end "C" and "D" classification.
Some 1,100 to 1,200 department stores, which anchor so many of those, will also close between 2017 and 2023, reducing the store count in the sector by one-fifth, according to a recent report from Coresight, and lower traffic, lower sales regional malls will take the brunt of that. The rise in digital sales and younger consumers' spending prioritization of experiences over goods is making all that more profound.
But that's not an issue for planned project in Miami. In fact, a Triple Five spokesperson, speaking to the A.P., didn't want to call it a mall.
"Unlike the hundreds of failing malls in the United States, the type of 'mall' approved by Miami-Dade County will not rely on either department store anchors or the now obsolete traditional mall format," Nick Egelanian, president of retail real estate consulting firm SiteWorks, told Retail Dive in an email. "Rather than attracting a 250,000 to 500,000 person trade area like most early malls, this facility will be capable of attracting millions of shoppers, including domestic and international tourists visiting South Florida."
Indeed, the over saturation doesn't mean new malls won't be built, just that they must be re-imagined as "consumer engagement spaces" that cater to consumers "less interested in owning things than in having experiences and accessing functionalities," according to global strategy and management consulting firm A.T. Kearney.
"There is a need to replace traditional anchors with attractions and evolve stores into experiences – and that’s what this property represents," A.T. Kearney Partner Michael Brown, author of the report The Future of Shopping Centers, told Retail Dive in an email. "Miami-Dade’s American Dream Miami project reflects the need for mall developers to create experiential destinations where families will come and spend hours engaging with the retailers, restaurants and service providers as well as the attractions within the complex."
Attributes of the planned property will be seen in malls all over the country in coming years, he also said, but Egelanian thinks opportunities for projects on this scale are limited. "Only a few developers can think this audaciously and only a few markets can support such a giant retail undertaking," he said. "We believe that this developer and this market are well suited to make this kind of project a big success."