Replacing defunct shopping malls with open-air, lifestyle-oriented retail venues has become common throughout the United States. Mall demolition is expected to continue, with some projections suggesting that as few as 150 malls will still be in operation by 2032, down from the estimated 1,150 malls now operating nationwide. A report by Capital One Shopping Research stated that approximately 2 million square feet of mall space was demolished in 2023, and up to 87% of all large shopping malls may close over the next decade.
However, not all former mall sites can support private redevelopment into lifestyle centers. Despite many being located near transportation networks, the retail challenges that plagued these malls remain, leaving holes in their communities’ economic development landscapes. Other single uses, such as residential, may overly stress municipal services. A new balance of uses is needed for many of these sites.
The recent transformation of Burlington Center mall into The Crossings in Burlington Township, New Jersey, could serve as a model for industrial-led, mixed-use redevelopment at other failed mall sites located near interstate networks and population centers. The ongoing six-year, more than $600 million redevelopment is one of the few instances where a former regional shopping mall has been reimagined as a mixed-use development integrating industrial/warehouse product along with complementary retail, multifamily and hospitality uses.
The complicated, hurdle-filled journey might have ended differently if the developers, Burlington Township, and the community had not been able to work together and coalesce around a unified vision.
“Our plan was deliberate and intentional. It was based on critical feedback and input from the local community and key representatives to ensure that the development plan satisfied the region’s long-term vision and approach to redevelopment initiatives,” explained Dan Hudson, managing principal at MRP Industrial. “We believe The Crossings will serve as a national model for smart growth strategies that involve public-private partnerships working together to achieve goals that best meet the needs of the community.”
The Rouse Co. opened the 800,000-square-foot Burlington Center in the early 1980s to great fanfare. Its roster of national anchor tenants included Macy’s, JCPenney, and Sears. At its peak, the enclosed mall included more than 100 stores and restaurants, and its opening was credited with catalyzing subsequent commercial office and retail development between Burlington and Mount Holly townships.
Over time, however, local consumer shopping patterns shifted as newer retail options arrived in the immediate area. Multiple retail concepts associated with the mall failed, and Burlington Center experienced a steady decline made worse by a burdensome level of debt. The mall changed hands several times, including through foreclosure, before closing permanently in 2019.
Clarion Partners, a real estate investment management company headquartered in New York City, and Baltimore-based MRP Industrial, an active developer of warehouse/industrial buildings across the Northeast, acquired Burlington Center in early 2019 for $22 million with a vision to capitalize on its strategic location between the New Jersey Turnpike and Interstate 295. The team understood the robust demand for logistics product and knew that global, national and regional users would be drawn to the site by its critical transportation arteries, proximity to local ports and access to a substantial segment of the U.S. population. The challenge would be to incorporate other uses desired by the broader community into a comprehensive plan.
Clarion Partners and MRP Industrial have a history of collaborating, particularly in Burlington County, where they reconfigured a 135-acre former brownfield site into Burlington Industrial Park, a project generally regarded as the first institutional-grade industrial park introduced in the central New Jersey marketplace. The two groups have worked together to develop more than 8 million square feet of industrial product, encompassing 15 buildings across five business communities. An additional 700,000 square feet of industrial space is currently in the approval process and awaits construction.
The Clarion/MRP team outlined the advantages and benefits of an industrial-anchored redevelopment concept in numerous presentations to Burlington Township’s governing body and the public. The original concept plan was composed entirely of industrial/warehouse space, with the development team emphasizing the need to establish a strong foundation for the project with an asset class that was economically viable and could quickly utilize the vacant site.
After a series of meetings with township officials, the partnership realized that an all-industrial approach would likely be met with disapproval, so the group pivoted to a mixed-use approach. While reactions from local government officials turned generally favorable, it was considerably more difficult to obtain public support amid anti-warehousing opposition from a vocal minority within the community.
The community’s primary concern was the loss of retail space caused by Burlington Center’s closure. It became clear that focusing on a mixed-use concept with a retail component was essential to garnering local support. However, these conversations and early entitlements occurred as the country recovered from a global pandemic, resulting in substantial economic pressures on retailers.
To move the project forward, the Clarion/MRP team committed more than $8 million toward subsidizing the retail portion of the site, which involved purchasing adjacent ancillary parcels and constructing the road network and utility infrastructure for immediately available speculative pad sites. The team believed this investment would spark interest from retailers that otherwise could not have justified the capital investment necessary to open new stores. Furthermore, the team was confident that initial success with quick-serve pad restaurants would increase site visibility and open the project to broader retail uses as the market recovered.
While a general anti-warehouse sentiment exists in New Jersey, partly due to increased truck traffic, the Burlington Center site had become a magnet for unwanted activity and vagrancy. Burlington Township officials recognized the chance to address this problem with a fresh approach that combined much-needed housing with a commercial outlet for new retailers and restaurants. The solution replaced a sense of nostalgia for the old mall with ownership stakes in progress and new reactivation.
After more than three years of collaboration with all stakeholders and extensive revisions to the site plan and building designs, The Crossings received full support from elected officials.
“The Crossings project demonstrates how taking a committed partnership approach, combined with thoughtful planning, can lead to successful outcomes for all stakeholders, including the municipality, residents, tenants and investors,” stated Elliott Byers, senior vice president at Clarion Partners. “It can serve as an example for other companies to study … one that positively impacted and brought new energy into an entire community.”
To realize the master-planned vision for the industrial-anchored redevelopment strategy, the Clarion/MRP team had to acquire several neighboring land parcels from both private and public parties, in addition to the acquisition of the Burlington Center site. In total, the team acquired six separate parcels: a 138-acre farm along I-295 adjacent to the mall property, 86 acres across Bromley Boulevard, an Exxon fuel station, a commercial rental center along the Mount Holly Road frontage, an abandoned township road that divided the site, and a functioning county jughandle (an off-ramp that veers to the right, allowing vehicles to make safer, more controlled left turns). The total acquisition price approached $52 million.
Each of the aggregated parcels unlocked a strategic objective for the redevelopment, but the jughandle was critical to the success of the retail pad sites because it represented an optimal retail corner property with visibility sufficient to attract restaurant patrons. As that final assemblage transaction unfolded, it was determined that the New Jersey Department of Transportation (NJDOT) had originally purchased the parcel with taxpayer funds, meaning the State House Commission had to approve the sale. The development team worked closely with Burlington Township, Burlington County, NJDOT and the state district attorney’s office to obtain approvals, establish the land value and draft the contract to transact the property lawfully.
With the master plan in place, in the summer of 2020 the development team embarked on construction of the first industrial building, totaling 635,000 square feet, in the Westampton Township portion of the redevelopment assemblage. Ahead of construction completion, Walmart preleased the entire building. Concurrent with the development of the first building, the Clarion/MRP team commenced demolition of the former mall and mass grading of the entire assemblage.
The development of two additional speculative industrial buildings followed shortly thereafter. A 940,000-square-foot warehouse and a 750,000-square-foot warehouse delivered in the fall and winter of 2023, respectively. The Clarion/MRP vision was realized again, with a full-building prelease of the larger warehouse to shipping and logistics company Maersk, due to the project’s strategic location, access to labor and site features. Each building features securable truck courts and above-market overhead doors, trailer drop parks and auto stall counts.
As leasing efforts continue for the 750,000-square-foot building, planning has begun for the fourth and final industrial development on the site — a 210,000-square-foot warehouse/industrial building to be constructed on the pad-ready site between the two existing warehouses.
Each industrial building was constructed with sustainable design features that maximize energy and water resource utilization, benefiting both the environment and tenant operating costs. Two of the buildings will receive LEED Silver certification, and the planned 210,000-square-foot structure is anticipated to do the same.
At the core of The Crossings’ design was an emphasis on creating sensible traffic flows for the various uses, both on- and off-site. This required nearly $3 million worth of off-site road improvements, such as county roadway expansion with additional travel lanes and full-phase intersection upgrades, including new signalization, additional turn lanes and pedestrian walkway accommodations. Enhanced landscape buffers and architectural walls facilitated transitions between industrial and retail uses, limiting the public’s ability to intermix with the industrial traffic flow. Furthermore, the retail portion incorporates four separate access points to public roads, providing excellent interconnection to the surrounding areas.
Amenities integrated into the project design include a nearly mile-long, 10-foot-wide multipurpose walking path that connects to an existing path network. In addition, two charging stations were installed outside each warehouse building to promote electric vehicle usage. The development team also secured an on-site NJ Transit bus stop and shelter to provide transportation options for business park employees.
More than 160 trees and 1,300 pieces of shrubbery were installed, in addition to an on-site wetland basin with thousands of wetland grass plugs, adding vegetation to the former mall site once dominated by asphalt and concrete.
Leveraging more than 150,000 consumers residing within a 6-mile radius of the site, Ferber Company, a retail development company selected by MRP Industrial and Clarion Partners, simultaneously developed several free-standing buildings on the speculative pad sites suitable for quick-service restaurant and other retail uses. Two years after pad site development, Freddy’s Frozen Custard & Steakburgers, Raising Cane’s Chicken Fingers, Panera Bread and Sleep Number are operational and outperforming projections. Discount Tire is also expected to commence construction soon.
Negotiations are in the final stages for a 150-room full-service hotel with conference and meeting facilities. Once developed, this will add another use contemplated by the master plan for The Crossings.
To date, activity at The Crossings has generated approximately 700 jobs, and the industrial projects alone have injected nearly $7 million into the Burlington and Westampton township budgets through permit and Council of Affordable Housing fees. At the conclusion of all development and leasing activities, The Crossings will support nearly 1,400 new jobs, including 900 in the warehouse/industry sector and 500 in retail/hospitality. Furthermore, The Crossings will generate more than $5.4 million annually in property tax revenue for the local community — a consequential turnaround from a once “dead mall” that offered little tax revenue due to its diminished value.
Burlington Township Mayor E.L. “Pete” Green witnessed the decline of Burlington Center mall, and his administration was intimately involved in decisions and approvals that led to the site’s reinvention as The Crossings. “As a central gathering place for so many years, it was painful for everyone to watch [the mall’s] demise. We took our time to support the new vision, because it was critical to get it right the first time,” he said.
“The original proposal for an outlet mall, an asset class that lost favor nationally, never materialized, and this paved the way for the new [industrial-anchored] mixed-use strategy incorporating a range of essential product types to produce long-term value,” Green added. “The lesson we learned is the importance of collaboration, transparency and trust to arrive at a result that serves many important stakeholders and stands the test of time. The Crossings has breathed new life into a once-abandoned site, and this has been a rewarding and immensely satisfying journey that benefits many audiences.”
The redevelopment of Burlington Center into The Crossings can serve as a model for other redevelopment projects with strategic suburban locations throughout the country. Such sites must possess strong regional labor pools, developed infrastructure that supports intraregional connectivity and access to neighboring core and secondary markets, and moderate demand for housing or the expectation of population stability or growth.
By articulating a clear vision supported by market fundamentals, the Clarion/MRP team gained consensus and the support of governmental leadership. The reactivated site returned opportunity, jobs, tax revenue and activity to the community that surrounded the once-shuttered mall. As retail demand consolidates away from the regional malls of decades past, communities can now envision an opportunity for the next generation of mixed-use projects led by industrial and warehouse development.
Brian Peterson, senior vice president at MRP Industrial, was the primary development officer responsible for The Crossings.
Addressing the Housing CrisisA July 2023 article in Forbes noted there is a shortage of 6.5 million homes in the U.S., observing that “while residential is in short supply, shopping malls suffer from a problem of abundance. … Because retail has historically followed rooftops, most malls are already in dense population centers — the exact places most in need of housing.” Reports indicate a housing shortage of 200,000 to 300,000 units exists in New Jersey. Jefferson Apartment Group, which recently purchased land from MRP Industrial as part of The Crossings’ master plan, aims to help alleviate this problem by building a 500-unit multifamily development spanning 20 buildings and consisting of one-, two- and three-bedroom apartments and townhouses. Amenities will include two stand-alone clubhouses, two courtyards with swimming pools, a playground, and a dog park. Incorporating a multifamily component into The Crossings satisfied Burlington Township’s affordable housing obligations, as 20% of the units are designed for COAH- (Council of Affordable Housing) eligible residents. The development of affordable housing should also help to attract and retain industrial employees by offering logistics workers a rare opportunity to live within walking distance of their place of employment. |