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Dead Mall Syndrome: The Self-Reinforcing Death Spiral of Retail
Submitted by Charles Hugh Smith from Of Two Minds
Dead Mall Syndrome: The Self-Reinforcing Death Spiral of Retail
Retail CRE is highly leveraged and loaded with staggering amounts of debt that rests on leases that are only as good as the retailers' profit-loss statements and solvency.
The decay of the "build it and they will come" model of commercial real estate is gathering speed for a simple systemic reason: the decline is self-reinforcing in several critical ways.
Before we start the analysis, let's ask a basic question: How much of the stuff and services purchased at retail outlets, malls, strip malls, etc. is absolutely necessary and how much is excess consumption?
Conventional "Growth by any means" Cargo Cultists such as Paul Krugman never ask this basic question, because the answer (very little is essential, most is excess consumption) undermines the entire narrative that all growth is good, even the most marginal, unsustainable, wasteful and fiscally imprudent.
I've captured the essence of retail in America with this photo:
Put another way: what if Degrowth is the future, for a variety of structural reasons? If so, the need for billions of square feet of commercial space will implode.
Degrowth, Anti-Consumerism and Peak Consumption (May 9, 2013)
Looming U.S. Retail Implosion: DeGrowth 2014 (December 4, 2013)
There are two primary self-reinforcing dynamics in retail CRE (commercial real estate): consumerist and financial. Let's start with the consumerist dynamic, which is composed of several interlocking feedback loops.
1. As the cost of big-ticket household expenses such as healthcare, energy, college, etc. rises while real income declines for the bottom 90%, households have less disposable income to spend on excess consumption--another tattoo, skinny-triple-mocha-fudge-lattes, 13th pair of shoes, etc.
I addressed the decline in real income yesterday in The First Domino to Fall: Retail-CRE (Commercial Real Estate).
2. The rise of eCommerce is eroding the desire to drive to the mall, strip mall, etc. when the goods can be delivered to one's door by the Brown Truck Store (Mark G.'s phrase).
3. As anchor chain stores and other key retailers reduce inventory and slash investment in maintenance and store improvement, the attractiveness of these physical places declines dramatically. Shopping in a decaying sepulchral cavern with little inventory on the shelves is not very appealing.
4. As chains close anchor stores in malls, foot traffic declines and the feeding chain of smaller retailers starves. The "cool/fun" factor of a mall declines exponentially with store closings. It's just not much fun to stroll through a huge space filled with closed storefronts and few other shoppers. In fact it can be a quite depressing experience.
The financial self-reinforcing dynamics are equally pernicious. Correspondent Chris H. (U.K.) recently described the precarious dependence of property valuations on long-term leases:
The book value of the properties is based on the attainable rents. If just one property in the portfolio has to settle for a lower long-term rental rate, that will devalue the entire 'book to market' portfolio. Just a few low 'book to market' evidence-based valuations and the whole sector could collapse.
One way to dodge that bullet is to not offer any long-term leases. Another is to entice major tenants to sign high-value leases with various guarantees (that the mall will maintain a certain occupancy rate, etc.).
The primary point here is that CRE is highly leveraged and loaded with staggering amounts of debt that rests on leases that are only as good as the retailers' profit-loss statements and solvency.
As Mark G. noted in his overview After Seven Lean Years, Part 2: US Commercial Real Estate: The Present Position and Future Prospects, the standard commercial real estate loan is not a 30-year mortgage; it's a short-term mortgage ( 5 to 10 years) with a huge balloon payment that's due at the end of the term--a balloon payment that requires refinancing.
That need to refinance will force lenders to examine mall owners' leases and the valuations that are based on high occupancy and lease rates. As anchor tenants vacate and smaller tenants close up in their wake, how many of these retail properties will justify their previous valuations? What happens to these properties when the balloon payment can't be paid because the owners cannot refinance?
There are three other financial factors to consider:
1. Many of the healthiest malls are "premium outlets" that cater largely to foreign tourists and the dwindling class of upscale American households. Should a global recession occur, tourism will take a hit, along with the ability of foreign tourists to buy thousands of dollars of luxury brand handbags, etc.
2. Since the top 10% of U.S. households is heavily dependent on bonuses, ownership of stocks, real estate appreciation, etc. for their income gains, a rollover in equities and residential real estate would negatively impact the "wealth effect" that has powered their five-year long shopping spree.
3. Much of the "growth" reported by retailers has resulted from poaching existing store sales: The American Model of "Growth": Overbuilding and Poaching (November 19, 2013).
Once the wheels fall off this model of "growth," chains will enter a cycle of closing marginal stores to boost profits. That will place additional pressure on retail properties as once-reliable chain tenants exit marginal properties en masse.
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Yeah, and apartments in NYC are selling for $70m. I guess all is well with the economy.
It all makes sense.
Gold is real cheap and available down the street, so no-one wants it, natch.
Not like NY shoeboxes. Ittybitty urban flats are a great investment because they're neither rare, long-lasting, tough to produce, nor hard to find. For THOSE, you're gonna need a healthy decade or so of labour, PLUS all the capital you can scrape together, AND a loan from your friendly neighbourhood bankster, for access to their many years' worth of shadow inventory. They aren't the best built, these days, but you do get what you pay for after all. They're common, BUT they're expensive, so it all works out.
Look how easy investing is turning out to be, in the new world order! You just buy (well, borrow) what's expensive, popular, and common. And you skip the stuff that's hard to make, uncommon, and obscure.
'Contrarian' is like, SOOOO last century.
As predicted its all imploding. How many "for lease" signs have we seen in vacant strip malls? How long before the owners are forced into bankruptcy? No jobs. Disposable income shifted to the real necessities. And property taxes? Who is going to support the tax base? Yup, you and me. And where are we going to shit that money from? Gas budget? Food budget? Milk and hamburger will be replaced with Spam and wiener water soup.And then its downhill from there.
I'm with John Williams of shadow stats. Hyper inflation in 2014. But only in the necessities. The rest of your assets? Home, cars, fishing boat, ect. Massive delflation. And then wage and price controls which leads where? Massive shortages and 50% unemployment.
Or am I being optimistic??
I haven't stopped crying since weiner water soup.
I hear it really helps with the transition to dry pet food.
What's that pervert doing in my soup?
Weiners?.... Spam water soup. With dandelion greens.
Agreed. I have to be careful when reading the comment section of stories here. Often I have to stifle a "LOL".
"Agreed. I have to be careful when reading the comment section of stories here. Often I have to stifle a "LOL"."
Awww for chrissakes WHY stifle the LOL ???!!!
The government will bail out the property holding companies, just like they bail out anything and everything that's not a working person. Half of the reason that retail's in freefall is because all of these assholes are sitting on property demanding sky high rent that's difficult if not impossible to keep up with. Go price this stuff and run the numbers; I dare you. I figured out that I'd have to move $40K of product per month just to break even with the rent. Forget about a light bill or eating or anything else. And that's not even a proper mall, I was pricing open spots in a small town strip malls...
That's the trillion dollar question -- where will the money come from?
Answer: financial repression, inflation, private pension confiscation; and, creative new taxes that don't require income like Obamacare, energy (carbon) taxes, water taxes, Federal taxes on real estate, and mileage taxes on vehicles on top of raising federal gasoline taxes.
That last one will really piss off all the suckers who bought hybrids thinking they were going to save money. BTW, the mandated alcohol biofuels is really a double hidden tax because we already subsidize it and we get 10-15% less fuel mileage with it, so you are also paying 10-15% more in Federal and state fuel taxes with each extra gallon you must use.
Have you priced Spam lately? It's not as cheap as you think, $3.33/lb at the local big box store. Cheaper then hamburger though.
"where do I short?"
Have you tried the stock market? Sears, JCP, Best Buy, Radioshack,
"Retail CRE is highly leveraged and loaded with staggering amounts of debt that rests on leases that are only as good as the retailers' profit-loss statements and solvency."
The games with P&L and financials are pretty well documented. I dunno about (long term) solvency - suspect NOT. But if - IF - leases and rents are being paid short term then that suggests there is liquidity. I guess that's what hurts my head - I think these retailers ought not to be liquid and thus they should have crashed
Unless...debt, MOAR debt?!
Seems like there's a ton of "subprime" CRE finance out there. At least with residential subprime, it's people's homes which they have some incentive to stay in. If a corporate obligation can be voided through BK, there's no incentive at all to stay in a commercial property or make the payments. Once the trickle of defaults reaches a certain level, it's going to trigger another wave of defaults, depending on how highly leveraged these deals really are.
This all seems vaguely familiar.
One of the bigger malls in my area is, for the most part, a place for the geriatrics to walk hither and yon before the late morning folks show up. Then, when the late morning folks show up, are comparing prices to see how much cheaper it is to buy online, often the case---------so they leave with little to nothing.
The weekends, it pretty much boils down to the teenie boppers hanging out with fo schizlle and swagalicious #texting coolest buds 4 feet away nose buried in da phone running into shittzle.
The food court is by and large the busiest place every day.
Otherwise, if I wanted to could pretty much take my Yukon and drive down any hallway to the store front of my choice without running anyone over.
Malz fell suddenly out of favor over ten (fifteen?) years ago after overbuilding, Target and Walmart superstores selling cheap Chinese imports, and other exogenous changes, perhaps even including the earliest Internet shoppers like Amazon. Just the Internet as an information source on products reduce trips to the mall just to browse and comparison shop.
Then again perhaps a successful mall attracts its own parasites, and soon the area is so congested its attractiveness is reduced and it strangles itself.
Perhaps they can be repurposed to grow organic vegetables, chickens and eggs, and last but not least (medical) marijuana.
Screw the (medical) part - just another bullshit end run around really stupid laws. I don't smoke - haven't for 30 years, but the present maryjane scene is so fucking stupid as to boggle the mind - a great metaphor for the whole rotten system.
(And yes, I DID inhale...)
PS _ re the advise to short RSH - it's up over 16% today...
I've been following this turkeyt for over 6 months. In the long run, its dead.
In the long run, we all are, and you can really get busted trying to short some of these dying retailers. Sears, et al. Lots of luck trying to time the dying throes.
My two malls, 70 miles aweay in the county seat 'big' city of 70,000 or so, are both doing poorly - the deal about the food court being the busiest and the halls empty is right on. Anchor stores going, kids roaming, no real customers and no real goods worth a shit - all present. I went in one two weeks ago, partly because they ARE wheelchair friendly and wife is there now (cancer) and wanted to go to a particular calandar store. We went, we shopped, we bought 3 calandars, we left. My impression of the place, which used to be pretty vibrant circa 1998-2005 or so, was morgue. There used to be a 5 or 6 movie complex next to the food court - gone, and with it a hell of a lot of traffic. Nordstorms - gone. Borders - well, you know, and still empty. Sears still there, but not exactly crowded.
It is just grim. We need to rethink these spaces. I'm thinking "Makers" - 3 d printers and/or all kinds of small scale MANUFACTURING that works indoors. Local orientation, local people, the revival of local economy. The spaces are dying - but there is a potential rebirth there. We need the vision and courage to sieze the day...
SO Expand the Food Court... DUH think Positive :)
I will say if you built your mall on $30 a square foot rents....but sales are down so the tenants can't pay that and survive...then the new tenant will only pay $15 a square foot...it kind of blows your pro forma and the value of your shopping center...so you either lose it to the bank...or you lose some of your Capital....Commercial Real Estate 101
Its important to realize that the past years (decades, actually) of our "growing" economy was based on building debt. That party is over. Net/net is wasn't real growth.
In regard to retail space, a few years ago a retail analyst made the statement that we were "over-stored." So among others, we've had a retail space bubble for quite a while now.
We simply have too much retail space. The policies for the past 4-5 years were attempts to keep the party going - nothing more.
If we'll just let things normalize - downsizing can be painful - we'll eventually get over the hump. But not until.
"We simply have too much retail space. The policies for the past 4-5 years were attempts to keep the party going - nothing more."
Funny - - - the Chinese and the US - - - residential and commercial real estate far more than needed or sustainable. Eventually there is a price to be paid, and we are nearing the check out. Please turn out the lights as you leave.
Craig
This whole discussion reminds me of magical Dubai.
Probably we never get to go, and its going to change a lot before I get there whenever.
I've seen 2 or 3 evolutions of malls in Los Angeles over the decades.
Its all been inflated beyond reason and now someone has to pay the piper.
I've seen ghost towns in California, they sprout up everywhere.
That's why FEDs' policies are so destructive. It's allowing the continued misallocation to stupid shit we don't need.
One man's "excess consumption" is another man's "reward for successful competition and hard work."
Ergo, no such thing as excess consumption.
The plebs should be careful, however, to understand that this logic doesn't apply to them. That's why we must regulate their sugar and trans-fat intake.
Best not to be a pleb.
I would say it depends on if you consumed with money you earned, or if you borrowed money to buy consumptive goods.
If you just keep borrowing more and more to buy more and more stuff that does not generate a return, that consumption is excessive.
Put them out of their misery.
"One of the bigger malls in my area is, for the most part, a place for the geriatrics to walk hither and yon before the late morning folks show up. Then, when the late morning folks show up, are comparing prices to see how much cheaper it is to buy online, often the case---------so they leave with little to nothing. "
Stores could turn into a showcase for products, like a car dealership. I remember several stores in the 1980's that were like this. You didn't buy any of the items in the store. You would see the product you want, they would take down your information, and you receive it in the mail. The prices were much lower because the stores didn't keep any inventory.
This is not a minor event. The 1% already control the food supply thru 7 private corporation, they control the supply chain and decide who works and who does not, they control energy distribution, they have eliminated the "mom and pop" local based economy and supply chain, now goes all the brick and mortar as everyone orders "cheaper" over the internet. Yet they also control the internet and now are acting out protest as electronic currency moves in. They no longer need to "disappear" anyone through investment in a "security" force, just click and you can't order anything and you no longer exist. No due process, no alternatives. Good luck. Is Zerohedge worried?
Conventional "Growth by any means" Cargo Cultists such as Paul Krugman never ask this basic question, because the answer (very little is essential, most is excess consumption) undermines the entire narrative that all growth is good, even the most marginal, unsustainable, wasteful and fiscally imprudent.
At least the folks here at ZH realize that the reason the economy is in the shitter is because our policy makers listen to self serving idiots like Krugman.
" ... the reason the economy is in the shitter is because our policy makers listen to self serving idiots like Krugman."
I wish that was the only reason. It is equally, or perhaps more, because we listened to idiots like Saint Ronnie (the Wrong), slick Willie Clinton, and the great God of Austrian Economics, Milton Friedman. Having worshiped at the altar of Mammon, we should know what to expect. Perhaps we are the idiots for listenting to any economic "guru" as though they knew shit from shinola.
Craig
Maybe not as much as you seem to think.
Friedman as not an Austrian economist, he was Chicago School, which is somewhere in-between. Reagan investigated a gold standard with a committee with the likes of Paul Craig Roberts and Laffer but they were stiff armed by the FED. Reagan also got shit for raising some taxes, but was promised $3 in spending cuts for every $1 in taxes raised by the Dem liars controlling both houses. They lied, so after the tax increases the cuts were never made.
The mall bubbles burst.
Excellent post!
CHS is a smart guy. You should read some of his books...
Looking for something to short? Try Paul Krugman
There are a couple strip malls around me in decline, and I've been noticing that most of these strip malls are at 50% vacancy, which can't be good.
All but the newest malls in the highest income areas have come to resemble thirld world souks. Sleazy jewelers operating out of kiosks. Pickpockets and shoplifters, merchandise that has picked through, sold and returned perhaps more than once. Food courts that are more about obtaining visa's for the franchisees and money laundering than being an actaull restaurant. In short they have become a large financial criminal operation.
Apparently we shop at the same mall.
Kiosk row has become a suburban version of Bartertown. All it needs now is Tina Turner and a sax player.
Ah... domino in motion. Slow motion, I would add, so that most do not notice.
BRIC are trains, moving along behind the American economy, which is itself in slow process of becoming a train wreck - - - an obstical in the path of those speeding trains . . . and who believes that they will not crash after us? After all, they are just followers, making a bet on how to live.
Of course, there may be survivors. Better to get off this train before it is too late. But, of course, like me, you are probably too late to exit. And, like me, you probably were excited to get on, oh so many years ago. It has been a fun ride. We have no one to blame but ourselves. We insisted... we participated... we played the lottery game, and like almost all lottery players we will lose.
Enjoy.
Craig
SHORT: PRU TRV. This is where they get the long term refi.
TIME FOR TIMMAH, TO FOAM THE RUNWAYS.
So you think it will be a soft landing eh?
Que up the fire trucks and body bags, nobody gets out of here alive.
The only real question in all of this is - why is Amazon allowed to destroy local economies without any resistance from any lawmakers whatsoever? Even if Amaon pays local sales taxes it still has unfair advantages over millions of local stores that are now closing. Remove Amazon monolith - and economy will do better, much better.
AMZN is essentially a ponzi. It has ever made a dime except for Bezos and the VCs. It WILL collapse at some point.
The whole point of AMZN is to crush most of the competition and then raise prices.
How will it protect itself from direct distribution? Perhaps if Google takes over the delivery market, absorbing / replacing FedEx, UPS, etc and the USPS dies off, then Google and Amazon can merge, and the cost of direct ordering from the manufacturer will be offset by excessive delivery fees, artificially making Amoogle the better choice, even at the increased prices.
alibaba
GAMAZON
The Amazon model is more efficient than the big box and mall model, just like the WalMart model was more efficient than the Mom and Pop model. The next efficiency will come with tweaking of the logistics model. Rather than bulk shipments from suppliers and warehousing by Amazon, the ideal Amazon model would rely on drop ship from their suppliers. This removes the warehousing and works toward just in time replenishment concepts. Complete components are eliminated from the distribution chain. A simultaneous efficiency improvement will be applied to the brown trucks, probably in the form of drop ships to post offices and a whole new drop ship outlets in neighborhoods (the reverse of the UPS store) where customers come to pick up their goods ... like at their grocery store.
Dropships?
"Hang on we're in for some chop"
How long will that last? Other than some specialized goods that require ultra-expensive manufacturing processes, such as semiconductors, most things can be locally produced through additive manufacturing via automation, at lower prices. The only things that may have value could be energy and raw materials.
The only real question in all of this is - why is Amazon allowed to destroy local economies without any resistance from any lawmakers whatsoever?
Robots. Massive warehousing. Its the new future economy requires 30% of the labor force. Amazon is buying mass media so its becoming a closed-loop system. No exit.
30 percent? I would be surprised if it is more than 5 percent, excluding the "public sector".
The banks and government take my money. Walmart and Amazon give it back to me in savings. Why are the banks and our public servants allowed to destroy the local economies without any resistance from the people. Fuck the lawmakers, they're the problem.
Online retailing is the what Walmart was to the death of mom and pop brick and morter stores. Amazon is beating Walmart at their own game, albeit with a different platform. A much more convenient platform for consumers. In a free market, you've got to let the best idea prevail. If not, all you'll end up with is a centrally planned economy decided by politicians. We've already seen that with too big to fail banks. Hows that working out?
as always with real estate, depends on location
http://www.ocregister.com/lansner/past-515860-dropping-vacancies.html
the OC is doing fine so make sure to pick your spots wisely
DC or near military (still open) or nuclear power plants should be safe. The police will be rough and ready.
I never feel so fit and healthy as when I go to the mall and look around. Great ego boost.
Seconded. Know exactly how you feel.
I'm also glad to not be a single-mom.
And speaking of single moms my local mall no longer has three cash-4-gold shops as I previously reported....we now have FOUR of them!!! And of course this is just the inside of one (formerly bustling) mall.
Who decides what is "excess consumption"? A cranky old man? The government? The church? Or the individual?
I don't doubt his basic thesis. But judgment about what is "excess" leads to turning over that judgment to the State. The USSR had detailed plans of consumption and they didn't include "excess". Nor did they include necessary items, either.
Looks like a nice buy for some Chinese Mogul....and empty crime infested piece of RE.
Chinese Mongolian?
There's a Strip Club near me - seems to be doin' a brisk biz.
Don't see the problem here. Adapt and overcome or go extinct. Personally, I think we could do without at least 50% of the retail that's out there.
Dead, soon to be ghost. Been there before in the 70's. This time will be worse cause this is a Depression that won't be denied.
akk, the malls suck! Wildly overpriced crap, fewer and fewer choices. Our malls are mostly all crappy, overpriced clothing stores. No big electronics stores,
no pet shops, just about nothing but really bad fast food, and overpriced clothing. You can get a tiny cupcake for 4.00. Woo, woo. It would be nice to see
the entire Simon mall chain go bankrupt.
titty malls! fuck yeah!
So how is the CMBS where all this shit was packaged performing?
I live in LA, we have a weird mini-mall culture of closed shops, massage parlors, medical pot shots and 7-11 stores with a few ethnic food joints mixed in, I'm guessing the pot shops and jerk joints are keeping the lights on.
The only viable employers in LA are govt
And fuck Starbuck's while we're talking retail.
Starbucks can suck on my left nut - shit in a cup for the price of a meal.
"Bad for retail."
Plenty of vacant storefronts by me. One place offered free haircuts to get people.
Retail probaly going like gangbusters near financial centers and Washington DC.
Last downturn DC was booming with all lobbyist money pouring into the area.
People working and living in the edge are talking about a new form of government. This is a warning signal to those in DC because when people lose everything the lose it.
We can swap those store clerk service jobs for manufacturing jobs if we'll just buy more American made goods. Often it takes a lot of searching to find those American made goods but in many cases it can be done.
In the Barrons roundtable section this week Marc Faber has some interesting comments on service jobs.
Wall Steet will always outsorce to the cheapest. Perhaps Africa is next. The US is becoming a welfare consuming state.
The Fed prints the money and buys US debt until the US dollar dies.
My idea of a mini-mall - lap dance store, pot store, liquor store... Screw those monolithic pieces of crap that sell nothing but shit, stop at my mini-mall - you'll always leave happy, relaxed and satisfied....
From what I've seen all the abandoned mini malls quickly become home to numerous Massage Parlors, Starbucks', We-Buy-Gold, Pay-Day-Advance, and Camel-Toe-Yoga studios.
All the malls around me have a bunch of "fillers". Nail shops, cheap dress shops with little merchandise and at least 2-3 un leased spaces.....unheard of 5-6 years ago. The strip center in my very upscale town has not been 100% leased since 1008
New businesses are anything that caters to the welfare SS disability crowd.
"We take EBT cards" or "Obama phones here"
That's the very mall where I bought my latest Sony device:
http://www.theonion.com/video/sony-releases-new-stupid-piece-of-shit-tha...
The Mall of America is the most visited mall on the planet. Been there once and it is not necessary to go back.
I have 2 books that I really believe to be necessary when the collapse occurs.
My clinical parasitology book and my Handbook of Chemistry and Physics. Good to have the knowledge available.
There is still lead drain pipe in Rome with the emperor's stamp on them.
the fed owns the biggest mall around here. god damned slum lords is what they are.
Years ago I used to lots of clothing at the mall, at Eddie Bauer. Great quality stuff that seemed to last forever.
Then they decided that turning their high quality merchandise into shoddy far-offshore crap was a good business strategy. They thought the customers wouldn't notice.
Then the customers stopped coming.
Then they were repeatedly in dire financial straights.
Then this iconic American business was bought by some private equity gunslingers from California.
Now, based on a recent (and stupid) purchase, their crap would have to improve substantially to even qualify as shoddy.
It ain't rocket science.
Funnest picture I've seen, probable because I have relatives who do exactly that, also because I've known this for the last 30 years, if people stopped buying crap the economy and peace would end.
Take a simple thing like a Cast Iron Skillet it has lasted thru my parents day to day use including. camping, being run over by a truck. And now it has got to be close to 70 years old and still shows no sign of wear, but my relatives go thru Teflon practically every year.
And toasters ...OMG don't get me started.
"How about Japanese style brothels, gambling joints and sushi shops??"
Oh, hey, speaking of which, did you guys know alcohol was banned through the 1920's then legalized during the great depression? The government ran out of money, so the cuntery had to stop. That will probably repeat itself. We can't afford to put millions of stoners in jail for life, so expect weed and maybe prostitution and a few other things to be legalized or decriminalized soon.
our malls are dead out here too, even at Christmas time. their best use to ME? indoor walking trails in our 110 degree weather. nice and air conditioned, not too many people, lots of pretty things to look at. I don't even bring my wallet inside with me.
We're now a GoodWill shopping family!
Speak of the devil...
Sears closes flagship store in Chicago:
http://www.huffingtonpost.com/2014/01/22/sears-closing-flagship-store_n_...
Of Two Minds CHS has been writing along the same line, of an economy that is all but dead, and ready to kick the bucket any day now, for a few YEARS. Gerald Celente wannabe.
What should we do with Malls?
Make them Soverign Nations. Turn the Parking lots into farming. Give them mineral and water rights so they can have self sustained water and sewage systems. Make the various indoor space into living & entertainment. Every thing inside is tax free, income and sales. No child left behind because everyone there is home schooled by parents who give a damn. No cars required unless you go outside of the walls. Guns required to shoot the zombies as they crawl over the perimeter security structures.
No welfare but voluntary charity is okay (that way when a deadbeat family does not pull its weight the community can withhold support). Leadership is drawn by lot and changes every few years.
Hey, this might even work for Detroit...............
After the Khmer Rouge burned all the books in the National Library in Phnom Phen they literally turned it into a pigsty. Maybe the Fed could take a mega mall somewhere and open up a hunting park while they're at it. Probably not in CA though. Would have to be TX for sure.
Most A and B malls are at their highest value per square foot in history
Good to convert empty malls to hospitals and clinics when we all 'sick and tired'.