Evaluating development and community benefits of shopping malls : A case study using input/output analysis

Purpose – The purpose of this paper is to focus on the real estate development and community interaction aspects of US shopping malls. The existing research on shopping mall development and redevelopment can more comprehensively address the importance of malls to the communities in which they are located. Existing shopping mall research focuses on lease valuation, tenant location, retail agglomeration economies, retail demand externalities and intangible asset value. Largely, neglected areas of research are the community and economic contributions of shopping malls. These are critical issues given the age of shopping malls worldwide, the need for adjacent area redevelopment and requirement of large public subsidies for infrastructure construction. Design/methodology/approach – This paper investigates the critical role of shopping malls as town centres and catalysts for area development and redevelopment. A review of the existing research on shopping malls and retail economic contributions to communities is addressed along with how mall redevelopment can be a catalyst for the revitalization of urban core and suburban areas. Methodology on the measurement of shopping centre economic and employment impacts using input/output (IO) modelling is reviewed and analysed. Findings – IO modelling is an effective tool to evaluate publically supported infrastructure to accompany shopping mall and retail redevelopment. As an example of an IO analysis of construction and mall operations economic impacts, the paper presents a case study of the proposed $2 billion Mall of America (Bloomington, Minnesota) expansion employing IO modelling. Originality/value – The paper demonstrates the community benefits and economic justification for public support for mall revitalization and provides a reliable analytical tool for quantifying the benefits of mall redevelopment to the community.