Masters Theses

Date of Award

8-1984

Degree Type

Thesis

Degree Name

Master of Science

Major

Planning

Major Professor

Kenneth B. Kenney

Committee Members

George E. Bowen, James A. Spencer

Abstract

The development of commercial real estate enterprises within the peripheries of new regional shopping malls is a common occurrence. Although this phenomenon has been widely recognized, few studies have attempted to establish a relationship between the construction of new regional shopping malls and subsequent commercial development around them. This thesis examines the extent to which new regional shopping malls act as catalysts to satellite commercial development. It investigates the tendencies of regional shopping malls to induce or accelerate satellite commercial enterprise construction, particularly when located in pioneer areas, and identifies the reasons why entrepreneurs may perceive regional shopping mall peripheries as attractive for the development of their commercial enterprises.

The literature is reviewed in order to delineate the nature of the framework under which commercial real estate location, site selection, and development decisions are made. It suggests that these decisions are based on certain priming actions of urban areas, the characteristics and locational requirements of various types of commercial enterprises, and entrepreneurial strategies. The roles of regional shopping malls in the processes of suburbanization and retail decentralization are described, and the primary and secondary impacts they may have are identified.

The focus of the thesis is an empirical study which examines the development of a regional shopping mall located in metropolitan Atlanta--Cumberland Mall--and its influence over the ensuing construction of commercial enterprises within the periphery. Prior to its development in 1973, the study area was of pioneer market status. Fieldwork revealed that, by March 1981, a total of 84 commercial enterprises existed in the adjacent corridor. This included seven shopping centers, four office parks, one mixed-use development, five large, freestanding retail enterprises, 63 strip commercial establishments, and four other commercial enterprises. Associated with this new development was a rise in the land values of properties surrounding Cumberland Mall, as well as a boom in the numbers of property sales transacted, commercial rezonings granted, and building permits issued since the 1972 announcement of plans for the mall.

Survey research was used to trace the history of locational decisions that were made regarding the development of commercial enterprises within the Cumberland Mall periphery. Personal interviews were conducted between November 1980 and March 1981 with the local public officials who were involved in these decisions, as well as with a sample of the entrepreneurs whose firms had developed commercial enterprises in the study area. The opinions of the interviewees pertaining to the development of the Cumberland Mall corridor as a whole as well as particular commercial enterprises are analyzed.

The local public officials who were interviewed indicated that they had expected the study area to eventually become a very strong commercial center due to the proximity of growing residential areas and the availability of excellent accessiibility resulting from the presence of two Interstate freeways and one U.S. highway. They were pleased but surprised at the rapidity with which such development occurred. Cumberland Mall was credited with being the catalyst in this phenomenon.

According to the responses of the entrepreneurs who were interviewed, the decisions to develop individual commercial enterprises in the study area were based on the policies and practices of the respective firms, the locational requirements and operational characteristics of the proposed enterprises, and the various features of the study area as well as the vicinity. Of particular importance was the shared versus generative nature of the business of each enterprise. The commercial complexes (including shopping centers, office parks, and a mixed-use development) tended to be more generative-oriented, while the smaller retail outlets were characterized by shared business, thereby exhibiting a greater dependency on the prior existence of a well-established market area. This dependency resulted in a need to be located near other commercial enterprises in order to take advantage of agglomeration and external economies by drawing upon their customer traffic for potential business. Cumberland Mall represented a major source of such traffic. The office parks were noted as deriving fewer benefits from the presence of the mall than the retail enterprises due to the nature of their operations.

The subject entrepreneurs felt that the announcement of plans for the mall or its presence (according to the time when each enter prise was built) was a significant factor in the locational, site selection, and development decisions for their commercial enterprises; and further, that the mall continued to be beneficial. Specifically, Cumberland Mall was influential because of the following: 1) the fact that it opened up the study area to commercial development by reducing the market uncertainties there; 2) its role as an economic anchor for the vicinity; 3) its luring of similar commercial enterprises, which provided the opportunity to reap agglomeration economies; 4) the identity and prestige it conveyed upon the study area; 5) the high volume of traffic that it generated; 6) its perception as a "bonus" in an already-good area; 7) its role as a nucleus of a growing commercial corridor; and 8) the amenities it offered. In reflection, virtually all of the entrepreneurs were extremely satisifed with the locations and success of their enterprises (although they observed that traffic congestion was getting out-of-hand). The interviewees contended, however, that the influence of Cumberland Mall (and other regional shopping malls in general) must be assessed in the perspective of the existing geographic, economic, demographic, temporal, and real estate market setting. Metropolitan Atlanta was regarded as superior in these aspects during the study period.

The research findings have several urban planning implications. An awareness by planners and other local policymakers of the major secondary (as well as primary) impacts that a new regional shopping mall can have in terms of its ability and tendency to stimulate and accelerate satellite commercial development within its periphery should prompt actions to encourage (or discourage), plan for, and accommodate such development. In addition, a comprehension of the factors considered by entrepreneurs in the locational, site selection, and development decisions made with respect to commercial enterprises, as well as the reasons why regional shopping mall peripheries may be perceived as desirable for these enterprises, should provide indicators concerning the nature and timing of peripheral commercial development. Plans may then be prepared and policies enacted regarding the following: growth management strategies; impact assessment; phasing of development; land use planning; transportation improvements; the provision of adequate and appropriate community facilities and services; zoning and building regulations; taxation measures; signage and curb cut controls; and performance standards.

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