As covered in past Present Value posts on retail, data, and disruption and emerging retail trends, the American retail landscape has experienced significant shifts driven by evolving consumer preferences, the rapid growth of e-commerce, and the structural impacts of the COVID-19 pandemic. Traditional retail spaces, mainly enclosed shopping malls, are increasingly facing economic stress. By Q4 2023, the national mall vacancy rate reached 8.6 percent, an indicator of structural change in consumer behavior. In response to these market pressures, the town center concept has re-emerged as a critical community and economic development tool. Defined by the Urban Land Institute as dense, walkable, mixed-use environments that integrate retail, office space, residential units, and civic amenities, town centers prioritize placemaking, social equity, and economic resilience. These hubs aim to enhance livability, advance equity, and expand access to economic opportunity.
Community development plans increasingly reflect this shift. In Alexandria, Virginia, the Eisenhower West Small Area Plan explicitly calls for mixed-use nodes to support employment, retail, and residential growth. Lancaster, Pennsylvania’s comprehensive plan highlights town centers as essential to revitalizing underutilized spaces, aligning with sustainability and inclusivity goals. Montgomery County, Maryland’s Thrive 2050 Plan connects mixed-use town centers to long-term economic competitiveness and climate resilience.
Several case studies highlight the evolution of this model:
In Westlake, Ohio, Crocker Park has evolved over time into a vibrant mixed-use district, transforming 120 acres into two million square feet of retail, residential, and commercial space. With national retailers, offices, residences, and structured parking, it functions as a lifestyle center and community hub. Avalon in Alpharetta, Georgia, scaled this model to 90 acres, introducing high-end retail, Class A office space, a hotel, and 800+ housing units. Public plazas, trails, and cultural programming anchor the experience, supported by public-private infrastructure agreements. Retrofits like Mashpee Commons in Massachusetts converted a 1960s strip mall into a traditional village center with mixed-use blocks and New England-style architecture, redeveloped incrementally with flexible zoning.
Studies have shown that mixed-use developments with integrated public spaces can enhance adjacent property values compared to single-use retail spaces. For instance, the redevelopment of Belmar in Lakewood, Colorado, led to an annual increase of over two million dollars in local tax revenues due to new business activity and residential development.
Beyond commercial and residential benefits, town centers offer significant open space and recreation advantages. Integrating trails, plazas, and green infrastructure supports community wellness, encourages outdoor activity, and improves environmental quality. A 2023 study found that residents in high-density, pedestrian-friendly areas had 43 percent lower obesity rates than those in car-dependent suburbs. Communities with town centers also benefit from lower crime rates and higher civic participation than those without.
Developing successful town centers requires coordinated policy, planning, and capital strategies.
Zoning Reform – Municipal zoning codes must be updated to allow flexible uses, eliminate excessive parking minimums, and support density. Form-based codes help ensure high-quality design while allowing adaptive reuse. Arlington, Virginia’s Columbia Pike Form-Based Code catalyzed town center developments along a former retail corridor with over 1,000 new residential units and active ground-floor uses.
Financing – Revitalizing malls into town centers also requires innovative financing beyond traditional debt. Public-private partnerships and Tax Increment Financing (TIF) can reduce risks and align public and private interests. In a typical TIF structure, local governments use the incremental rise in property values following redevelopment to repay bonds or reimburse developers for infrastructure improvements. The redevelopment of Belmar in Lakewood, Colorado, used layered TIF and metropolitan district financing to transform the mall into a town center with housing, retail, and public amenities.
Sustainability Standards – Further, municipalities should require all large-scale redevelopments to meet LEED Gold or WELL standards and integrate climate adaptation measures. The redevelopment of Assembly Row in Somerville, Massachusetts, showcases integrated sustainability, with district energy systems, car-free zones, and 40 acres of green and open spaces incorporated into the master plan.
Tracking Outcomes – City and State planning departments should also track outcomes and share data on vacancy rates, energy savings, public amenity use, and related job creation. Tracking and sharing data can help evaluate the economic and fiscal impacts of town center developments, enabling adjustments to policy and design.
While successful examples exist, institutional and regulatory barriers remain.
Town centers contribute to climate action goals by reducing vehicle miles traveled and enabling compact urban form. Research from National Renewable Energy Laboratory indicates that mixed-use developments, through integrated design and shared infrastructure, can lead to notable energy savings compared to standalone building uses. As sustainability becomes embedded in development policy, communities are turning to adaptive reuse strategies and requiring green infrastructure—such as permeable paving and urban canopy standards—to reduce environmental impacts and enhance project performance. For developers and municipalities alike, integrating these elements into town center design not only supports climate goals but also strengthens the commercial viability of retail environments by improving the public realm and attracting consistent foot traffic.
The return of town center models signals more than just a shift in retail real estate – it marks a broader rethinking of community growth. The places offer a way to stitch together economic, social, and environmental goals in a single, place-based strategy. With the right mix of planning, policy, and financing, communities can transform underutilized sites into active, resilient hubs that meet residents’ evolving needs. Whether retrofitting a conventional mall or building a new mixed-use node from scratch, town centers provide a compelling model for community development.
Anjana Balaji, Senior Analyst | Abalaji@econsultsolutions.com
Anjana Balaji is a senior analyst at ESI. She earned her Master’s in applied economics from Johns Hopkins University in 2023 and earned her Bachelor’s in economics from Stella Maris College in 2020. Previously, she worked as a research assistant with ESI. Ms. Balaji’s interests include sustainable development and global renewable energy policies.
