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Annals of Commerce: The Terrazzo Jungle : The New Yorker

ANNALS OF COMMERCE

THE TERRAZZO JUNGLE

Fiftyyearsago,themallwasborn.Americawouldneverbethesame.
by Malcolm Gladwell
MARCH15,2004

ictorGruenwasshort,stout,and unstoppable,withawildheadofhairand eyebrowslikeunprunedhedgerows.Accordingto aprofileinFortune(andpeoplelovedtoprofile VictorGruen),hewasatorrentialtalkerwith eyesasbrightasmicaandamindasfastas mercury.Intheoffice,hewasfamousfor keepingtwoorthreesecretariesworkingfull time,ashemovedfromonetothenext,dictating nonstopinhisthickVienneseaccent.Hegrewup inthewelltodoworldofprewarJewishVienna, studyingarchitectureattheViennaAcademyof FineArtsthesameschoolthat,afewyears previously,hadturneddownafledglingartist namedAdolfHitler.Atnight,heperformed satiricalcabarettheatreinsmokefilledcafs.He emigratedin1938,thesameweekasFreud,when oneofhistheatrefriendsdressedupasaNazi StormTrooperanddrovehimandhiswifetothe airport.TheytookthefirstplanetheycouldcatchtoZurich,madetheirwaytoEngland,and thenboardedtheS.S.StatendamforNewYork,landing,asGruenlaterremembered,withan architectsdegree,eightdollars,andnoEnglish.Onthevoyageover,hewastoldbyan Americantosethissightshighdonttrytowashdishesorbeawaiter,wehavemillions ofthembutGruenscarcelyneededtheadvice.HegottogetherwithsomeotherGerman migrsandformedtheRefugeeArtistsGroup.GeorgeS.Kaufmanswifewastheirbiggest fan.RichardRodgersandAlJolsongavethemmoney.IrvingBerlinhelpedthemwiththeir music.GruengotonthetraintoPrincetonandcamebackwithaletterofrecommendation fromAlbertEinstein.Bythesummerof1939,thegroupwasonBroadway,playingeleven weeksattheMusicBox.Then,asM.JeffreyHartwickrecountsinMallMaker,hisnew biographyofGruen,onedayhewentforawalkinmidtownandranintoanoldfriendfrom
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Vienna,LudwigLederer,whowantedtoopenaleathergoodsboutiqueonFifthAvenue. Victoragreedtodesignit,andtheresultwasarevolutionarystorefront,withakindofmini arcadeintheentranceway,roughlyseventeenbyfifteenfeet:sixexquisiteglasscases, spotlights,andfauxmarble,withgreencorrugatedglassontheceiling.Itwasacustomer trap.ThiswasabrandnewideainAmericanretaildesign,particularlyonFifthAvenue, whereallthecarriagetradestorefrontswereflushwiththestreet.Thecriticsraved.Gruen designedCirosonFifthAvenue,StecklersonBroadway,ParisDecoratorsontheBronx Concourse,andelevenbranchesoftheCaliforniaclothingchainGraysons.Intheearly fifties,hedesignedanoutdoorshoppingcentercalledNorthlandoutsideDetroitforJ.L. Hudsons.Itcoveredahundredandsixtythreeacresandhadnearlytenthousandparking spaces.Thiswaslittlemorethanadecadeandahalfsincehesteppedofftheboat,andwhen Gruenwatchedthebulldozersbreakgroundheturnedtohispartnerandsaid,MyGodbut wevegotalotofnerve. ButGruensmostfamouscreationwashisnextproject,inthetownofEdina,justoutside Minneapolis.Hebeganworkonitalmostexactlyfiftyyearsago.ItwascalledSouthdale.It costtwentymilliondollars,andhadseventytwostoresandtwoanchordepartmentstore tenants,DonaldsonsandDaytons.Untilthen,mostshoppingcentershadbeenwhat architectsliketocallextroverted,meaningthatstorewindowsandentrancesfacedboth theparkingareaandtheinteriorpedestrianwalkways.Southdalewasintroverted:the exteriorwallswereblank,andalltheactivitywasfocussedontheinside.Suburban shoppingcentershadalwaysbeenintheopen,withstoresconnectedbyoutdoor passageways.Gruenhadtheideaofputtingthewholecomplexunderoneroof,withair conditioningforthesummerandheatforthewinter.Almosteveryothermajorshopping centerhadbeenbuiltonasinglelevel,whichmadeforpunishinglylongwalks.Gruenput storesontwolevels,connectedbyescalatorsandfedbytwotieredparking.Inthemiddlehe putakindoftownsquare,agardencourtunderaskylight,withafishpond,enormous sculptedtrees,atwentyonefootcagefilledwithbrightcoloredbirds,balconieswith hangingplants,andacaf.Theresult,Hardwickwrites,wasasensation:
JournalistsfromallofthecountrystopmagazinescamefortheMinneapolisshoppingcentersopening.Life,Fortune,Time, WomensWearDaily,theNewYorkTimes,BusinessWeekandNewsweekallcoveredtheevent.Thenationalandlocalpressworeout superlativesattemptingtocapturethefeelingofSouthdale.TheSplashiestCenterintheU.S.,Lifesang.Theglossyweeklypraisedthe incongruouscombinationofagoldfishpond,birds,artand10acresofstoresall...underoneMinnesotaroof.Apleasuredomewith parking,Timecheered.OnejournalistannouncedthatovernightSouthdalehadbecomeanintegralpartoftheAmericanWay.

SouthdaleMallstillexists.ItissituatedoffI494,southofdowntownMinneapolisand westoftheairportabigconcreteboxinaseaofparking.TheanchortenantsarenowJ.C. PenneyandMarshallFields,andthereisanAnnTaylorandaSunglassHutandaFoot Lockerandjustabouteveryotherchainstorethatyouveeverseeninamall.Itdoesnot seemlikeahistoricbuilding,whichispreciselywhyitisone.Fiftyyearsago,VictorGruen designedafullyenclosed,introverted,multitiered,doubleanchortenantshoppingcomplex withagardencourtunderaskylightandtodayvirtuallyeveryregionalshoppingcenterin

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Americaisafullyenclosed,introverted,multitiered,doubleanchortenantcomplexwitha gardencourtunderaskylight.VictorGruendidntdesignabuildinghedesignedan archetype.Foradecade,hegavespeechesaboutitandwrotebooksandmetwithone developerafteranotherandwavedhishandsintheairexcitedly,andoverthepasthalf centurythatarchetypehasbeenreproducedsofaithfullyonsomanythousandsofoccasions thattodayvirtuallyeverysuburbanAmericangoesshoppingorwandersaroundorhangs outinaSouthdalefacsimileatleastonceortwiceamonth.VictorGruenmaywellhavebeen themostinfluentialarchitectofthetwentiethcentury.Heinventedthemall.

neofGruenscontemporariesintheearlydaysofthemallwasamannamedA.Alfred Taubman,whoalsostartedoutasastoredesigner.In1950,whenTaubmanwasstillin histwenties,heborrowedfivethousanddollars,foundedhisowndevelopmentfirm,and, threeyearslater,putupatwentysixstoreopenairshoppingcenterinFlint,Michigan.A fewyearsafterthat,inspiredbyGruen,hematchedSouthdalewithanenclosedmallofhis owninHayward,California,andoverthenexthalfcenturyTaubmanputtogetherwhatis widelyconsideredoneofthefinestcollectionsofshoppingmallsintheworld.Theaverage Americanmallhasannualsalesofaroundthreehundredandfortydollarspersquarefoot. Taubmansmallsaveragesalesclosetofivehundreddollarspersquarefoot.IfVictorGruen inventedthemall,AlfredTaubmanperfectedit.Onedaynotlongago,IaskedTaubmanto takemetooneofhisshoppingcentersandexplainwhateveritwasthatfirstdrewpeople likehimandVictorGruentotheenclosedmallfiftyyearsago. Taubman,whojustturnedeighty,isanimposingmanwithawrysenseofhumorwho wearsbespokethreepiecesuitsandpeersdownattheworldthroughhalfclosedeyes.Heis thesortofoldfashionedmanwhoreferstomerchandiseasgoodsandapparelassoft goodsandwhocanglanceatacouturegownfromhalfwayacrosstheroomandcome withinafewdollarsofitsprice.Recently,Taubmansfortunestookaturnfortheworse whenSothebys,whichheboughtin1983,ranafoulofantitrustlawsandheendedup servingayearlongprisonsentenceonpricefixingcharges.Thenhiscompanyhadtofend offahostiletakeoverbidledbyTaubmansarchrival,theIndianapolisbasedSimon PropertyGroup.But,onarecenttripfromhisManhattanofficestotheMallatShortHills,a halfhoursdriveawayinNewJersey,Taubmanwasinhighspirits.ShortHillsholdsa specialplaceinhisheart.WhenIboughtthatpropertyin1980,therewereonlyseven storesthatwerestillinbusiness,Taubmansaid,sittinginthebackofhislimousine.Itwas adisaster.Itwasdonebyalargecommercialarchitectwhodidntunderstandwhathewas doing.Turningitaroundtookfourrenovations.BonwitTellerandB.Altmantwoofthe originalanchortenantswerereplacedbyNeimanMarcus,Saks,Nordstrom,andMacys. Today,ShortHillshasaveragesalesofnearlyeighthundreddollarspersquarefoot accordingtotheGreenbergGroup,itisthethirdmostsuccessfulcoveredmallinthe country.WhenTaubmanandIapproachedthemall,thefirstthinghedidwaspeeroutatthe
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parkinggarage.ItwasjustbeforenoononarainyThursday.Thegaragewasalmostfull. Lookatallthecars!hesaid,happily. TaubmandirectedthedrivertostopinfrontofBloomingdales,onthemallsnorthside. Hewalkedthroughtheshortaccesscorridor,paused,andpointedatthefloor.Itwasmade upofsmallstonetiles.Peopleusedtousemonolithicterrazzoincenters,hesaid.Butit crackedeasilyandwasdifficulttorepair.Women,especially,tendtohavethinsoles.We foundthattheyareverysensitivetothesurface,andwhentheygetononeofthoseterrazzo floorsitslikeaskatingrink.Theyliketowalkonthejoints.Theonlydirectcontactyou havewiththebuildingisthroughthefloor.Howyoufeelaboutitisveryimportant.Then helookedupandpointedtothesecondfloorofthemall.Thehandrailsweretransparent. Wedontwantanythingtodisrupttheview,Taubmansaid.Ifyourewalkingonthefirst level,heexplained,youhavetobeable,atalltimes,tohaveanunimpededlineofsightnot justtothestoresinfrontofyoubutalsotothestoresonthesecondlevel.Theideaisto overcomewhatTaubmanlikestocallthresholdresistance,whichisthephysicaland psychologicalbarrierthatstandsbetweenashopperandtheinsideofastore.Youbuy somethingbecauseitisavailableandattractive,Taubmansaid.Youcanthaveany obstacles.Thegoodshavetobeallthere.WhenTaubmanwasdesigningstoresinDetroit, inthenineteenforties,herealizedthateventhebestarcades,likethoseGruendesignedon FifthAvenue,werentnearlyasgoodatovercomingthresholdresistanceasanenclosed mall,becausewithanarcadeyoustillhadtogetthecustomerthroughthedoor.People assumeweenclosethespacebecauseofairconditioningandtheweather,andthats important,Taubmansaid.Butthemainreasonisthatitallowsustoopenupthestoreto thecustomer. Taubmanbeganmakinghiswaydownthemall.Helikesthemaincorridorsofhis shoppingmallstobenomorethanathousandfeetlongtheequivalentofaboutthreecity blocksbecausehebelievesthatthreeblocksisaboutasfaraspeakshoppinginterestcan besustained,andashewalkedheexplainedthelogicbehindwhatretailersliketocall adjacencies.TherewasBrooksBrothers,whereamanmightbuyasixhundreddollarsuit, rightacrossfromJohnston&Murphy,wherethesamemanmightbuyatwohundreddollar pairofshoes.TheBoseelectronicsstorewasnexttoBrookstoneandacrossfromthe SharperImage,soifyougotexcitedaboutsomeelectronicgizmoinonestoreyouwere stepsawayfromgettingevenmoreexcitedbysimilargizmosintwootherstores.Gucci, Versace,andChanelwereplacednearthehighestenddepartmentstores,NeimanMarcus andSaks.Lotsofdevelopersjustrentouttheirspacelikeyoudcutasalami,Taubman explained.Theyrentthespacebasedonwhetheritfits,notnecessarilyonwhetheritmakes anysense.Taubmanshookhishead.HegesturedtoaLegalSeaFoodsrestaurant,wherehe wantedtostopforlunch.Itwasoffthemainmall,atthefarendofashortentryhallway,and itwasdownthereforareason.AwomanabouttospendfivethousanddollarsatVersace doesntwanttocatchawhiffofsautedgrouperasshetriesonaneveninggown.Moreto
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thepoint,peopleeatatLegalSeaFoodsonlyduringthelunchanddinnerhourswhich meansthatifyouputtherestaurantinthethickofthings,youdhaveadeadspotinthe middleofyourmallformostoftheday. AtthefarendofthemallisNeimanMarcus,andTaubmanwanderedin,exclaimedover atrayofmensties,anddelicatelyexaminedthestitchinginthewomenseveninggownsin thedesignerdepartment.Hi,mynameisAlfredTaubmanImyourlandlord,hesaid, bendingovertogreetasomewhatstartledsalesassistant.TaubmanplainlylovesNeiman Marcus,andwithgoodreason:wellrundepartmentstoresaretheenginesofmalls.They havepowerfulbrandnames,advertiseheavily,andcarryextensivecosmeticslines (shoppingmallsare,atbottom,deliverysystemsforlipstick)allofwhichgenerate enormousshoppingtraffic.Thepointofamallthereasonsomanystoresareclustered togetherinonebuildingistoallowsmaller,lesspowerfulretailerstoshareinthattraffic. Ashoppingcenterisanexerciseincoperativecapitalism.Itisconsideredsuccessful(and themallownermakesthemostmoney)whenthemaximumnumberofdepartmentstore customersareluredintothemall. Why,forinstance,aresomanymalls,likeShortHills,twostories?Backathisoffice,on FifthAvenue,Taubmantookapieceofpaperanddrewasimplecrosssectionofatwostory building.Youhavetwolevels,allright?Youhaveanescalatorhereandanescalatorhere. Hedrewescalatorsatbothendsofthefloors.Thecustomercomesintothemall,walks downthehall,getsontheescalatoruptothesecondlevel.Goesbackalongthesecondfloor, downtheescalator,andnowshesbackwhereshestartedfrom.Shesseeneverystoreinthe center,right?Nowyouputonathirdlevel.Isthereanyreasontogoupthere?No.Afull circuitofatwolevelmalltakesyoubacktothebeginning.Itencouragesyoutocirculate throughthewholebuilding.Afullcircuitofathreelevelmallleavesyouattheoppositeend ofthemallfromyourcar.Taubmanwasthefirsttoputaringroadaroundthemallwhich hedidathismallinHaywardforthesamereason:ifyouwanttogetshoppersintoevery partofthebuilding,theyshouldbedistributedtoasmanydifferententrypointsaspossible. AtShortHillsandatmostTaubmanmallstheringroadrisesgentlyasyoudrivearound thebuilding,soatleasthalfofthemallentrancesareonthesecondfloor.Weputfifteen percentmoreparkingontheupperlevelthanonthefirstlevel,becausepeopleflowlike water,Taubmansaid.Theygodownmucheasierthantheygoup.Andweputourvertical transportationtheescalatorsontheends,soshoppershavetomakethefullloop. Thisistheinsightthatdrovetheenthusiasmforthemallfiftyyearsagothatbyputting everythingunderoneroof,theretailerandthedevelopergained,forthefirsttime,complete controlovertheirenvironment.Taubmanfussesaboutlighting,forinstance:hebelievesthat nexttotheskylightsyouhavetoputtinylightsthatwillgoonwhenthenaturallightfades, sotheduskdoesntsendanunwelcomesignaltoshoppersthatitistimetogohomeand youhavetorecesstheskylightssothatsunlightneverreflectsoffthestorefrontglass, obscuringmerchandise.Canyouoptimizelightinginatraditionaldowntown?Thesame
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goesforparking.Supposethattherewasadowntownwherethebiggestdrawwasamajor departmentstore.Ideally,yououghttoputthegarageacrossthestreetandtwoblocksaway, soshoppers,ontheirwayfromtheircarsandtotheirdestination,wouldpassbythestoresin betweendramaticallyincreasingthetrafficforalltheinterveningmerchants.Butina downtown,obviously,youcantputaparkinggaragejustanywhere,andevenifyoucould, youcouldntinsurethatthestoresinthathightrafficcorridorhadtheoptimaladjacencies, orthatthesidewalkwouldfeelrightunderthethinsolesofwomensshoes.Andbecausethe storesarearrayedalongaroadwithcarsonit,youdontreallyhaveamallwherecustomers canwanderfromsidetoside.Andwhathappenswhentheygettothedepartmentstore?Its fourorfivefloorshigh,andshoppersarelikewater,remember:theyflowdownhill.Soits goingtobehardtogeneratetrafficontheupperlevels.ThereisatendencyinAmericato waxnostalgicforthetraditionaldowntown,butthosewhofirstbelievedinthemalland understooditspotentialfoundithardtolookattheolddowntownwithanythingbut frustration. InDetroit,priortothenineteenfifties,thelargedepartmentstores,likeHudsons, controlledeverything,likezoning,Taubmansaid.Theyweregeneroustolocalpoliticians. Theyhadenormousclout,andthatswhywhenSearswantedtolocateindowntownDetroit theyweretoldtheycouldnt.SoSearsputastoreinHighlandParkandonOakland Boulevard,andbuiltastoreontheEastSide,anditwasabletogetsomeotherstoresto comewiththem,andbeforelongtherewerethreeminidowntownsinthesuburbs.They usedtocallthemhotspots.Thishappenedmorethanhalfacenturyago.Butitwasclear thatTaubmanhasneverquitegotoverhowirrationaltheworldoutsidethemallcanbe: downtownDetroitchasedawaytraffic.

lanningandcontrolwereofevengreaterimportancetoGruen.Hewas,afterall,a socialistandhewasViennese.Inthemiddleofthenineteenthcentury,Viennahad demolishedthewallsandotherfortificationsthathadringedthecitysincemedievaltimes, andintheresultingopenspacebuilttheRingstrasseameticulouslyarticulatedadditionto theoldcity.Architectsandurbanplannerssolemnlyoutlinedtheirideas.Therewere apartmentblocks,andpublicsquaresandgovernmentbuildings,andshoppingarcades,each executedinwhatwasthoughttobethehistoricallyappropriatestyle.TheRathauswasdone inhighGothictheBurgtheatreinearlyBaroquetheUniversitywaspureRenaissanceand theParliamentwasclassicalGreek.ItwasallpartoftheofficialVienneseresponsetothe populistuprisingsof1848:ifAustriawastoremakeitselfasaliberaldemocracy,Vienna hadtobephysicallyremadealongdemocraticlines.TheParliamentnowfaceddirectlyonto thestreet.ThewallsthatseparatedtheliteofViennafromtheunwashedinthesuburbs weretorndown.And,mostimportant,aringroad,orRingstrasseagrandmallwasbuilt aroundthecity,withwidesidewalksandexpansiveurbanviews,whereVienneseofall backgroundscouldminglefreelyontheirSundayafternoonstroll.TotheViennesereformers
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ofthetime,thequalityofciviclifewasafunctionofthequalityofthebuiltenvironment, andGruenthoughtthatprincipleappliedjustasclearlytotheAmericansuburbs. NotlongafterSouthdalewasbuilt,GruengavethekeynoteaddressataProgressive ArchitectureawardsceremonyinNewOrleans,andhetooktheoccasiontolashoutat Americansuburbia,whoseroads,hesaid,wereavenuesofhorror,flankedbythegreatest collectionofvulgaritybillboards,motels,gasstations,shanties,carlots,miscellaneous industrialequipment,hotdogstands,waysidestoresevercollectedbymankind. Americansuburbiawaschaos,andtheonlysolutiontochaoswasplanning.WhenGruen firstdrewuptheplansforSouthdale,heplacedtheshoppingcenterattheheartofatidy fourhundredandsixtythreeacredevelopment,completewithapartmentbuildings,houses, schools,amedicalcenter,apark,andalake.Southdalewasnotasuburbanalternativeto downtownMinneapolis.ItwastheMinneapolisdowntownyouwouldgetifyoustartedover andcorrectedallthemistakesthatweremadethefirsttimearound.Thereisnothing suburbanaboutSouthdaleexceptitslocation,ArchitecturalRecordstatedwhenitreviewed Gruensnewcreation.Itis
animaginativedistillationofwhatmakesdowntownmagnetic:thevariety,theindividuality,thelights,thecolor,eventhecrowdsfor Southdalespedestrianscalespacesinsureabusynessandabustle.Addedtothisessenceofexistingdowntownsareallkindsofthings thatoughttobethereifdowntownwerentsonoisyanddirtyandchaoticsidewalkcafs,art,islandsofplanting,prettypaving.Other shoppingcenters,howeverpleasant,seemprovincialincontrastwiththerealthingthecitydowntown.ButinMinneapolis,itisthe downtownthatappearspokeyandprovincialincontrastwithSouthdalesmetropolitancharacter.

OnepersonwhowasntdazzledbySouthdalewasFrankLloydWright.Whatisthis,a railroadstationorabusstation?heasked,whenhecameforatour.Youvegotagarden courtthathasalltheevilsofthevillagestreetandnoneofitscharm.Butnoonemuch listenedtoFrankLloydWright.Whenitcametomalls,itwasonlyVictorGruensvision thatmattered.

ictorGruensgrandplanforSouthdalewasneverrealized.Therewerenoparksor schoolsorapartmentbuildingsjustthatbigboxinaseaofparking.Nor,withafew exceptions,didanyoneelseplantheshoppingmallasthecenterpieceofatidy,dense,multi usedevelopment.Gruenwasrightaboutthetransformativeeffectofthemallonretailing. ButinthinkingthathecouldrenactthelessonoftheRingstrasseinAmericansuburbiahe waswrong,andthereasonwasthatinthemidnineteenfiftiestheeconomicsofmall buildingsuddenlychanged. AtthetimeofSouthdale,bigshoppingcenterswereadelicatecommercialproposition. OneofthefirstbigpostwarshoppingcenterswasShoppersWorld,inFramingham, Massachusetts,designedbyanoldbusinesspartnerofGruensfromhisFifthAvenue storefrontdays.ShoppersWorldwasanopencentercoveringseventyacres,withfortyfour stores,sixthousandparkingspaces,andatwohundredandfiftythousandsquarefoot JordanMarshdepartmentstoreandwithintwoyearsofitsopening,in1951,thedeveloper wasbankrupt.Abigshoppingcentersimplycosttoomuchmoney,andittooktoolongfora
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developertomakethatmoneyback.Gruenthoughtofthemallasthecenterpieceofa carefullyplannednewdowntownbecausehefeltthatthatwastheonlywaymallswould evergetbuilt:youplannedbecauseyouhadtoplan.Then,inthemidfifties,something happenedthatturnedthedismaleconomicsofthemallupsidedown:Congressmadea radicalchangeinthetaxrulesgoverningdepreciation. Undertaxlaw,ifyoubuildanofficebuilding,orbuyapieceofmachineryforyour factory,ormakeanycapitalpurchaseforyourbusiness,thatinvestmentisassumedto deteriorateandlosesomepartofitsvaluefromwearandteareveryyear.Asaresult,a businessisallowedtosetasidesomeofitsincome,taxfree,topayfortheeventualcostof replacingcapitalinvestments.Fortaxpurposes,intheearlyfiftiestheusefullifeofa buildingwasheldtobefortyyears,soadevelopercoulddeductonefortiethofthevalueof hisbuildingfromhisincomeeveryyear.Anewfortymilliondollarmall,then,hadan annualdepreciationdeductionofamilliondollars.WhatCongressdidin1954,inanattempt tostimulateinvestmentinmanufacturing,wastoacceleratethedepreciationprocessfor newconstruction.Now,usingthisandothertaxloopholes,amalldevelopercouldrecoup thecostofhisinvestmentinafractionofthetime.AsthehistorianThomasHanchettargues, inagroundbreakingpaperinTheAmericanHistoricalReview,theresultwasabonanza fordevelopers.Inthefirstfewyearsafterashoppingcenterwasbuilt,thedepreciation deductionsweresolargethatthemallwasalmostcertainlylosingmoney,atleastonpaper whichbroughtwithitenormoustaxbenefits.Forinstance,inafrontpagearticlein1961 ontheeffectofthedepreciationchanges,theWallStreetJournaldescribedthefinancesofa realestateinvestmentcompanycalledKratterCorp.Krattersrevenuefromitsrealestate operationsin1960was$9,997,043.Deductionsfromoperatingexpensesandmortgage interestcameto$4,836,671,whichleftahealthyincomeof$5.16million.Thencame depreciation,whichcameto$6.9million,sonowKrattershealthyprofithadbeenmagically turnedintoalossof$1.76million.ImaginethatyouwereoneoffiveinvestorsinKratter. Thecompanyspolicywastodistributenearlyallofitspredepreciationrevenuetoits investors,soyourshareoftheirearningswouldberoughlyamilliondollars.Ordinarily, youdpayagoodchunkofthatintaxes.Butthatmilliondollarswasntincome.After depreciation,Kratterdidntmakeanymoney.Thatmilliondollarswasreturnoncapital, anditwastaxfree. Suddenlyitwaspossibletomakemuchmoremoneyinvestinginthingslikeshopping centersthanbuyingstocks,somoneypouredintorealestateinvestmentcompanies.Prices rosedramatically.Investorswereputtingupbuildings,takingoutasmuchmoneyfromthem aspossibleusingaccelerateddepreciation,thensellingthemfourorfiveyearslaterata hugeprofitwhereupontheybuiltanevenbiggerbuilding,becausethemoreexpensivethe buildingwas,themorethedepreciationallowancewasworth. Underthecircumstances,whocaredwhethertheshoppingcentermadeeconomicsense forthevenders?Shoppingcentersandstripmallsbecamewhaturbanplannerscall
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catalytic,meaningthatdeveloperswerentbuildingthemtoserveexistingsuburban communitiestheywerebuildingthemonthefringesofcities,beyondresidential developments,wherethelandwascheapest.Hanchettpointsout,infact,thatinmanycases thegrowthofmallsappearstofollownodemographiclogicatall.Cortland,NewYork,for instance,barelygrewatallbetween1950and1970.YetinthosetwodecadesCortland gainedsixnewshoppingplazas,includingthefourhundredthousandsquarefootenclosed CortlandvilleMall.Inthesametwentyyearspan,theScrantonareaactuallyshrankby seventythreethousandpeoplewhilegainingthirtyoneshoppingcenters,includingthree enclosedmalls.In1953,beforeaccelerateddepreciationwasputinplace,onemajor regionalshoppingcenterwasbuiltintheUnitedStates.Threeyearslater,afterthelawwas passed,thatnumberwastwentyfive.In1953,newshoppingcenterconstructionofallkinds totalledsixmillionsquarefeet.By1956,thatfigurehadincreasedfivehundredpercent. ThiswasalsotheerathatfastfoodrestaurantsandHowardJohnsonsandHolidayInnsand mufflershopsandconveniencestoresbegantomultiplyupanddownthehighwaysand boulevardsoftheAmericansuburbsandasthesedevelopmentsgrew,othersfollowedto shareintheincreasedcustomertraffic.Mallsledtomalls,andinturnthosemallsledtothe bigstandaloneretailerslikeWalMartandTarget,andthenthepowercentersofthreeor fourbigboxretailers,likeCircuitCity,Staples,Barnes&Noble.VictorGruenintended Southdaletobeadense,selfcontaineddowntown.Today,fifteenminutesdownanavenue ofhorrorfromSouthdaleistheMallofAmerica,thelargestmallinthecountry,withfive hundredandtwentystores,fiftyrestaurants,andtwelvethousandparkingspacesandone caneasilyimaginethatonedayit,too,maygivewaytosomethingnewerandbigger.

nce,inthemidfifties,VictorGruensatdownwithawriterfromTheNewYorkersTalk oftheTowntogivehisthoughtsonhowtosaveNewYorkCity.Theinterviewtook placeinGruensstylishofficesonWestTwelfthStreet,inanoldStanfordWhitebuilding, andonecanonlyimaginethereporter,rapt,asGruenheldforth,eyebrowsbristling.First, Gruensaid,Manhattanhadtogetridofitswarehousesanditslightmanufacturing.Then,all thesurfacetrafficinmidtownthetaxis,buses,andtruckshadtobedirectedinto undergroundtunnels.Hewantedtoputsuperhighwaysaroundtheperimeteroftheisland, buttressedbyhugedoubledeckerparkinggarages.Thejumbleoftenementsandtown housesandapartmentblocksthatmakeupManhattanwouldbereplacedbyneatrowsof hundredandfiftystoryresidentialtowers,arrayedalongaribbonofgardens,parks, walkways,theatres,andcafs.
Mr.G.loweredhisbrowsandglaredatus.Youaretroubledbyallthosetunnels,areyounot?heinquired.Youwonderwhether thereisroomfortheminthepresentundergroundjungleofpipesandwires.Didyouneverthinkhowabsurditistoburybeneathtonsof solidpavementequipmentthatisboundtogoontheblinkfromtimetotime?Heleapedfromhischairandthrustanimaginarypneumatic drillagainsthispolishedstudyfloor.Ratatattat!heexclaimed.Nightandday!Tearupthestreets!Thenpavethem!Thentearemup again!Flingingasidetheimaginarydrill,hethrewhimselfbackinhischair.InmyNewYorkofthefuture,allpipesandwireswillbe strungalongtheuppersidesofthosetunnels,aboveacatwalk,accessibletoengineersandpaintedbrilliantcolorstodelightratherthan appalltheeye.

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PostwarAmericawasanintellectuallyinsecureplace,andtherewassomething intoxicatingaboutGruenssophisticationandconfidence.Thatwaswhattookhim,so dramatically,fromstandingatNewYorkHarborwitheightdollarsinhispocketto Broadway,toFifthAvenue,andtotheheightsofNorthlandandSouthdale.Hewasa Europeanintellectual,anmigr,and,inthepopularmind,theEuropeanmigrrepresented vision,thegiftofseeingsomethinggrandinthebanalityofpostwarAmericanlife.Whenthe Europeanvisionaryconfrontedadrabandcongestedurbanlandscape,hedidnttinkerand equivocatehelevelledwarehousesandburiedroadwaysandcameupwithathrillingplan formakingthingsright.Thechiefmeansoftravelwillbewalking,Gruensaid,ofhis reimaginedmetropolis.Nothinglikewalkingforpeaceofmind.AtNorthland,hesaid, thousandsofpeoplewouldshowup,evenwhenthestoreswereclosed,justtowalkaround. ItwasexactlylikeSundayontheRingstrasse.Withthebuildingofthemall,OldWorld EuropehadcometosuburbanDetroit. WhatGruenhad,aswell,wasanunshakablefaithintheAmericanmarketplace.Malls teachus,heoncesaid,thatitsthemerchantswhowillsaveoururbancivilization. Planningisntadirtywordtothemgoodplanningmeansgoodbusiness.Hewenton, Sometimesselfinteresthasremarkablespiritualconsequences.Gruenneededtobelieve this,asdidsomanyEuropeanintellectualsfromthatperiod,dubbedbythehistorianDaniel Horowitzcelebratorymigrs.Theyhadfledaplaceofchaosandanxiety,andin Americanconsumerculturetheysoughtabulwarkagainstthemadnessacrosstheocean. TheywantedtofindinthejumbleoftheAmericanmarketplacesomethingasgrandasthe ViennatheyhadlosttheplacewheretheunconsciouswasmeticulouslydissectedbyDr. FreudonBerggasse,andwhereshrinestoEuropeancivilizationtotheGothic,the Baroque,theRenaissance,andtheancientGreektraditionswereerectedonthe Ringstrasse.ToAmericans,nothingwasmoreflatteringthanthis.Whodidntwantto believethattheactoflevellingwarehousesandburyingroadwayshadspiritual consequences?Butitwas,intheend,toogoodtobetrue.ThiswasntthewayAmerica workedatall. Afewmonthsago,AlfredTaubmangaveaspeechtoarealestatetradeassociationin Detroit,abouttheprospectsforthecitysdowntown,andoneofthethingshetalkedabout wasVictorGruensNorthland.Itwassimplytoobig,Taubmansaid.Hudsons,the Northlandanchortenant,alreadyhadaflagshipstoreindowntownDetroit.Sowhydid GruenbuildasixhundredthousandsquarefootsatelliteatNorthland,justatwentyminute driveaway?Satelliteswerebestatahundredandfiftythousandtotwohundredthousand squarefeet.Butatsixhundredthousandsquarefeettheywerelargeenoughtocarryevery merchandiselinethattheflagshipstorecarried,whichmeantnoonehadanyreasontomake thetrektotheflagshipanymore.VictorGruensaidthelessonofNorthlandwasthatthe merchantswouldsaveurbancivilization.Hedidntappreciatethatitmadealotmoresense, forhisclient,tosavecivilizationatahundredandfiftythousandsquarefeetthanatsix
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Annals of Commerce: The Terrazzo Jungle : The New Yorker

hundredthousandsquarefeet.ThelessonofAmericawasthatthegrandestofvisionscould bederailedbythemostbanalofdetails,likethesizeoftheretailfootprint,orwhether Congresssetthedepreciationallowanceatfortyyearsortwentyyears. When,lateinlife,Gruencametorealizethis,itwasapowerfullydisillusioning experience.Herevisitedoneofhisoldshoppingcenters,andsawallthesprawling developmentaroundit,andpronouncedhimselfinsevereemotionalshock.Malls,hesaid, hadbeendisfiguredbytheuglinessanddiscomfortofthelandwastingseasofparking aroundthem.Developerswereinterestedonlyinprofit.Irefusetopayalimonyforthose bastarddevelopments,hesaidinaspeechinLondon,in1978.Heturnedawayfromhis adoptedcountry.HehadfixedupacountryhouseoutsideofVienna,andsoonhemoved backhomeforgood.Butwhatdidhefindwhenhegotthere?JustsouthofoldVienna,a mallhadbeenbuiltinhisanguishedwords,agiganticshoppingmachine.Itwasputting thebelovedindependentshopkeepersofViennaoutofbusiness.Itwascrushingthelifeof hiscity.Hewasdevastated.VictorGrueninventedtheshoppingmallinordertomake AmericamorelikeVienna.HeendedupmakingViennamorelikeAmerica.
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