The Decline and Fall and (Possible) Reinvention of Northgate Mall

Although it was an unremarkable Thursday evening, Northgate Mall was buzzing. 

The Christmas decorations had recently been hung, imbuing the mall with an air of hope and expectation. Manufactured bushels of pine adorned in twinkling lights were suspended from the ceiling, appearing to levitate.

At the Flashlight Barbershop, men pooled in chairs, making the kind of jilted, intimate small talk not uncommon among guys whose attention is divided between a football game and checking their reflections in the mirror. On the wall, a list of rules: no cell phones, no profanity, no sagging pants. One customer defiantly chatted on his cell phone as the barber brushed the loose hairs off his neck.

Around the corner, at Esmerelda’s Cafe, a couple shared a panini. Nearby, a toddler rode the carousel two, three times in a row. At Wyatt and Dad Shoe Repair, a woman handed her clogs over to the cobbler with the cautious gentleness with which one might hand over a newborn baby.

On the surface, it seemed like business as usual at the fifty-eight-year-old North Durham shopping center. Though the corridors were thin with people and many of the storefronts sat vacant, the warm fluorescents made the mall feel populated, alive even. But roiling beneath loomed uncertainty over the future of Northgate—who would own it and what they would choose to do with the historic space.

Last month, a private equity firm called Northwood Investors got the legal go-ahead to begin foreclosure on the mall. Not even six months before, the firm had bought two promissory notes comprising the mall’s $62 million debt; Northgate Associates, the local company that owns the mall, defaulted. Now, if the mall either can’t reach an agreement with Northwood or pay off its debt, the mall could face foreclosure by the end of the year.

And that’s left Durham locals—some who only wander in during the holiday season, others who grew up as teenage mall rats in its geometric atrium—wondering what will become of the sprawling complex, which has been part of Durham’s fabric since 1960: Will Northgate be the latest casualty of the retail apocalypse, yet another suburban mall whose shoppers have turned to Amazon or urban retailers? Or can Northgate reinvent itself again, as it’s done several times in the past? And should the city begin eyeing that property for something else altogether—something designed for the twenty-first century, not a relic of a bygone era of American consumerism?

“This is extremely valuable land,” says Mayor Steve Schewel. “It’s located very near downtown. It’s located on an interstate highway. Whether or not it remains in the hands of a local family or whether or not it’s taken over by [Northwood], I think it’s going to be very important that that land be developed in a way that is beneficial to Durham. There are going to be a lot of important decisions made about that land, regardless of who the owner is.”

An invention of Austrian architect Victor Gruen, the shopping mall was born in 1956, envisioned as an alternative to Main Street. Northgate followed soon after—though developer W. Kenan Rand Jr., who had optioned the former tobacco field in 1949, originally intended that property for something else entirely: a Coca-Cola bottling plant. But he ran into opposition from people who, a half-century later, we might call NIMBYs. 

The land existed in the interstices between present-day Walltown and Braggtown. Then, there was an involved community that was not eager to see a bottling plant built in their neighborhood. According to a 1949 Durham Morning Herald article, the nearby residents protested at a Planning and Zoning Commission meeting, and Rand’s plans were thwarted.

Eight years later, Rand announced that he would build a shopping center on the site. In the time between the rejected plant proposal and his new announcement, construction on the interstate began just a short distance away, making the lot an ideal location for a mall.

In 1960, when it opened, the then-strip mall was among the first of its kind. It featured a Roses, Kerr Drug, and Colonial Stores Supermarket. Within two years, it doubled in size, adding a movie theater and restaurant in addition to twenty-two thousand square feet of store space. It would continue to expand incrementally over the next decade.

At a ceremony in 1974, Rand opened the enclosed mall we know today, complete with the carousel that still runs to this day. Among the new stores opening were Baskin-Robbins, The Curtain Shop, Chess King, Chick-fil-A, B. Dalton Booksellers, Slacks ‘n’ Things, Wrangler Wranch, and even a Spencer Gifts, which is also still there.

Suburbia is often credited with giving rise to the American mall. As consumers moved out of city centers—a white flight aided by the postwar economic boom, an influx of automobiles, and the construction of the interstate highway system—they needed alternative locations to coalesce. Between 1960 and 1990, Durham’s population nearly doubled, but its downtown was decimated by poorly managed urban renewal policies.

But other factors played a role, including the Cold War. According to historian Timothy Mennel, Cold War anxieties fueled the design of the enclosed mall, which was typically miles from concentrated urban centers, fortified by concrete and steel, and climate-controlled, protecting against a potentially harsh, post-nuclear-holocaust environment outside. In fact, many of the earliest malls were built with underground tunnels and fallout shelters.

But the mall emerged from the Cold War in other ways, too. Part of how American capitalism exerted its dominance over communism was through a campaign of consumption, emphasizing the breadth of choices available through the free market. The rise of consumption became central to the rise of Northgate: Between 1975 and 2000, the mall continued to expand, adding a food court, another screen at the movie theater, and thousands of square feet in retail space. To shop was as American as apple pie.

In early 2000, when sleek competitor The Streets at Southpoint opened in South Durham, Virginia Rand Bowman—Rand’s daughter, who became the managing general partner of Northgate Associates in 1985—expressed optimism about Northgate’s prospects, especially given its history in the Bull City.

“People don’t give track record much credit, but it does play a role,” she told the Triangle Business Journal. “We’ve been going strong for over thirty years, and we’re not going to roll over just because there’s some new competition out there.”

But even its track record couldn’t save Northgate from overarching economic trends. A decade before the Great Recession, malls were beginning to lose traction, especially those, like Northgate, that weren’t seen as “high-end” and, therefore safe. (In 1998, Good Housekeeping warned readers of violent crime at these shopping centers in a feature titled “Danger at the Mall.”)

Crime was only part of the equation. So, too, was the proliferation of big-box discount stores like Walmart. And so was the proliferation of malls themselves—there were simply too many of them. Tax incentives encouraged the construction of malls even when there wasn’t demand for them. Americans were over-retailed—and though there were broad economic gains in the 1990s, during that same decade, the buying power of the middle class eroded, and with it, malls’ popularity.

At that time, it was difficult to tell whether those dark clouds amounted to a temporary lull or portended a permanent demise. Northgate, which heralded the fact that it had an Old Navy and a Disney store, was still going strong throughout the nineties. But soon after the turn of the century—and a year after the Southpoint mall opened its doors—Northgate decided it was time to reinvent itself.

In early 2001, according to court documents, Bowman and Northgate Associates took out a property-secured loan for $58.5 million. Six years later, they took out a second loan for $27.5 million.

Soon after taking out the first loan, Northgate spent $6 million on a “facelift,” and then $13 million more on a full makeover, expanding the movie theater and shopping areas and entertainment venues. That investment didn’t appear to pay off. The story of the mall over the last decade and a half has been a story of closures: from Belk to Macy’s, Office Depot to Guitar Center, Harris Teeter to S&K Menswear. (While Sears declared bankruptcy earlier this year and announced that more than 180 of its stores would close, the Durham location has so far been spared.)

And so, to walk through Northgate today is to walk through a post-apocalyptic landscape, like walking through a world that is already over: a world where teenage indiscretion involved shoplifting a personality from the shelves of Spencer’s Gifts and Hot Topic. A world where “cucumber melon” was a calling card for tween girls. A world where the first day of school demanded a new outfit. A world that promised that the American dream was within reach, you just had to buy it.

The shopping mall, like an appendix, is a vestigial organ of American capitalism. Once emblematic of the abundance of consumer choice, it has been rendered nearly obsolescent.  

Today, the decline of malls is often attributed to irrelevance in the post-recession, Amazon-retail economy, or the blossoming of newer and shinier mixed-use complexes. There’s also the reality that malls like Northgate have become tawdry and uncool. Once the primary watering hole for teenage social savannas, they’ve fallen victim to desertification: Fewer teens frequent malls with each passing year. 

This is all true, but there’s a caveat: Malls catering to rich people are still doing fine. Malls catering to everyone else are dying—a testament, perhaps, to growing inequality. While luxury malls like Southpoint flourish, one-third of the approximately eleven hundred enclosed malls across America are dead or dying, according to a 2017 study.

Many of these dying malls have been converted into medical offices and clinics, megachurches, cultural community hubs, and community college campuses. Northgate, with its diverse, middle-class clientele, seems headed in that direction.

A Department of Motor Vehicles license agency sits between the New York Jewelry shop and Khen’s Tailor Shop. Reinvestment Partners temporarily inhabits a storefront during tax season, providing free tax assistance to local residents. Revolve Church meets weekly at the cinema. And the Durham Public Library houses its North Carolina collection and Maker Lab at the mall.

The fact that Northgate is and has always been locally owned—and connected to the community it serves—remains one of its strongest attributes. The introduction of Northwood Investors could change all of that, marking a turning point in the mall’s history.

“Northgate Mall has been locally owned forever; basically since it started, it’s been owned by Ginny [Rand Bowman] and her family,” Schewel says. “They’ve been really extraordinary citizens of Durham. As a local mall, they have really contributed so much to the life of our city. So many local events are sponsored out of Northgate, and they help so many of our nonprofits. So I do have concern that a developer without that commitment to our community might not make the same sort of contributions.”

Northgate Associates and Northwood Investors did not respond to repeated requests for comment.

Groups like Northwood Investors—which, in June, purchased the $62 million in debt that remained from the loans Northgate took out in the 2000s—have become familiar characters in the transformation of Durham, a sign that outside money is here to stay.

Northwood is behind the new Palladian Apartments, the residential component of a burgeoning “corporate center” on the I-40 between Durham and Chapel Hill. Its portfolio also includes the office building at 555 Mangum and the downtown “living experience” Van Alen.

What its presence will mean for Northgate remains unclear.

Despite the uncertainty, things are still happening at the mall—just not always things that you’d think of as happening at a mall. Duke Health is proceeding with plans to locate offices and clinics in the former Macy’s. The Durham Public Library plans to lease space there until the renovation of its main branch is completed in early 2020.

And while Northwood could foreclose within a few weeks, store managers say Northgate Associates has assured them that they can expect to keep their leases for at least another year. That’s hardly a long-term guarantee, but for many of Northgate’s small business owners, the American dream is still alive at the mall.

Esmerelda Ayala immigrated to New York City from Honduras twenty-four years ago. She worked in restaurants for the decade she lived in the Big Apple, and then for the first six in North Carolina.

Eventually, she left her job in order to focus on her dream: opening up a restaurant, Esmerelda’s Cafe, across the way from Pretzel Twister and near a corridor of clothing stores. The cafe serves coffee, tea, baked goods, soups and, most famously, paninis. Ayala hopes to eventually include Honduran food on her menu.

“A lot of people go to Southpoint because it’s bigger and seems fancier, but Northgate feels more family-oriented,” says Brandon Rogers, a twenty-four-year-old who grew up riding the carousel and now works part-time at both GameStop and Sears. “Plus, it’s the oldest mall in Durham. It’s sad that people have left it. But I am still here.”

Tony Wyatt and his brother used to work with their father in a successful chain of shoe repair stores in the nineties. After their dad retired, they founded their own chain, Wyatt and Dad Shoe Repair, and opened their second store in the Northgate Mall in May 2017.

Wyatt says they’ve already doubled their business.

“I don’t know what [the new owners’] intentions are, but I do know the mall is still signing new leases, so apparently they aren’t trying to tear it down,” Wyatt says. “I think it’s going to be good when the dust settles. I’m very optimistic that it’s going to be very good and that the mall is going to turn around.”

Being in the shoe repair business, Wyatt is used to being told that an industry is dying. He doesn’t traffic in such anxiety.

“I read articles in newspapers in the 1920s and things like that, and the argument was constantly: Well, cheaper shoes are putting shoe repairs out of business. And that’s not the case, the demand is still there,” Wyatt says. “Most of our customers do come for us, because there’s nobody else around. I think it is the same for malls like Northgate. The demand is still there.”

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