Shopping for space, health systems look at old malls like in Helena

The towering Hickory Hollow Mall — a 1.1 million square foot retail space in southeast Nashville — was once the greatest Tennessee mall. But like many malls, it has been in a death spiral for more than a decade.

Today, the gigantic complex surrounded by hectares of parking is on the way to joining the ranks of shopping centers in transition to a booming economic sector: medicine. Vanderbilt University Medical Center has been so successful in reviving another mall that its health system, Vanderbilt Health, plans to add medical clinics to the former Hickory Hollow Mall, renamed a decade ago Global Mall at the Crossings.

“The possibilities for service offerings at a facility of this magnitude are endless,” said Dr. Jeff Balser, the CEO of the medical center, announced in March. What big city healthcare systems need most is something malls have in abundance: space and parking. They are convenient for patients and practitioners, while costing less than expanding an existing hospital campus.

Across the country, 32 enclosed malls house health care services in at least part of their footprint, according to a database maintained by Ellen Dunham Jones, professor of urban design at Georgia Tech. One of the first was Jackson Medical Mall in Mississippi, founded by Dr. Aaron Shirley in 1996. Nearly a third of these medical transformations have been announced since the start of the covid-19 pandemic.

The most recent additions include the Capital Hill Mall in Helena, Montana, where Benefis Health System is building a 60,000 square foot primary and specialty care clinic on part of the 13-acre site that was razed in 2019. In Alexandria, Va., Inova Health System is part of a billion dollar mixed use development on the Landmark Mall site, which includes plans for a full-service hospital and trauma center.

The lockdowns brought by covid – both mandatory and voluntary – have pushed many brick-and-mortar retailers already to the brink bankrupt. But medicine’s reuse of retail space is more than pandemic opportunism, according to a November article in the Harvard Business Review. The three the authors suggest the rise of telemedicine and the continued push towards outpatient procedures will make shopping malls increasingly attractive places for healthcare.

The proposal also makes sense for commercial property investors, especially as mall owners struggle. Some went bankrupt during the pandemic. Every mall owner is now looking for mixed-use opportunities, said Ginger Davis of Trademark Properties in Charleston, South Carolina.

In 2017, his company began redeveloping the Citadel Mall, whose anchor tenant is now the Medical University of South Carolina. Clinics and surgery centers are located in the former JC Penney department store.

“Right now they’re doing surgery where people were buying sheets and towels,” Davis said.

In many cases, the transition to medicine is to supplement what remains of retail. At Citadel Mall, a spouse with a partner undergoing outpatient surgery must remain on site. But browsing Target, Davis said, still counts as on-site.

“We believe this model can work in communities across the country that are struggling with similar malls that are underperforming,” she said.

Since 2009, Vanderbilt Health has added 22 specialty clinics to nearly half a million square feet of One Hundred Oaks, a shopping center still owned by investors. The mall retains big-box retailers on the ground floor, but the interior of the mall is now almost entirely medical.

In some of these transactions, such as Alexandria’s Landmark and Nashville’s Hickory Hollow malls, the local government purchased the mall property that the hospital system leases, so those parties no longer generate property taxes.

Some failing malls like Hickory Hollow in Nashville are in various neighborhoods that need increased access to health services. Surrounding zip codes had Nashville highest rates of covid infections at the start of the pandemic and they have some of the lowest rates of primary care visits, according to survey data from the NashvilleHealth Nonprofit.

Shopping center locations remain desirable. Many are still more convenient for dense populations and highways than when they were built nearly 50 years ago, before surrounding suburbs were filled in.

When retiree Jennifer Johnson moved to Nashville to be closer to her grandson, her family warned her not to see a doctor on Vanderbilt’s main campus, which is under constant construction. She quickly understood why.

“It’s a zoo,” she said. “First you have to go through the parking maze, which is under construction. Then you try to figure out which elevator you’re going to get to, which floor you’re going to get to.

At One Hundred Oaks, she said, “you can go straight up the escalator and straight down to the hallway – it’s easy.”

Despite the size and age of many malls, they are quite easy to navigate compared to many hospitals. In Charleston, the Citadel Mall uses a football style tagged footage on the floor to help patients find the right clinic (a detail on which its owner insisted and which he nicknamed the “secret sauce”).

In contrast, many hospital campuses confuse patients. Vanderbilt’s main site in Nashville’s West End has been expanded two dozen times since the construction of the first building in 1925.

“Most of these hospitals are in areas where there is simply no room to grow. And if you do, it’s so expensive,” said Andre McDonald, a former hospital administrator who leads health care consulting for accounting and consulting firm LBMC. “These buildings are old. They are obsolete. Their maintenance is very expensive.

Shopping malls are a great fit, at least for large healthcare systems, McDonald said. They can essentially move everything except the emergency room and intensive care unit — including surgery and imaging centers — and keep them together. While doctor’s offices are often scattered throughout a hospital district, in a shopping mall, if anyone needs an MRI, it’s just beyond the food court under the same sprawling roof.

“It just creates a much more efficient flow for the patient going through the healthcare system with whatever disability they may have,” McDonald said.

Vanderbilt’s renovation of the former Hickory Hollow mall will also create a job pool for medical technicians at Nashville State Community College, which has already has a location in what was previously a Dillard department store.

The mall has been virtually empty for years, which makes no sense to nearby resident Ricky Grigsby. The area around it is also booming.

“Someone has to do something with this,” he said. “It could be jobs for someone.”

Grigsby recently retired from Vanderbilt after a career spent managing surgical instruments for busy operating rooms on the main campus. Now he’s a patient like everyone else – looking for a more convenient place to receive care.

Consolidating care in suburban malls also makes sense because of surrounding demographics, Dunham-Jones said. These neighborhoods are no longer inhabited primarily by young families, who first flocked to the projected neighborhoods and shopping malls built in the 1970s.

“The adults are still in the suburbs, but the kids have grown up a long time ago,” Dunham-Jones said. And now those remaining aging parents are “pretty heavy consumers of health care.”

This story comes from a partnership that includes Nashville Public Radio and KHN.