In the early morning in November, with a chill still in the air, three lines of cars inch across the open, cracked parking lot at the Sumter Mall in Sumter, S.C.
It’s still hours before the doors open at Belk, a department store with roots in the Southeast and the mall’s last remaining anchor tenant. The mall, which is about 60 percent vacant, has a hodgepodge of other tenants. Call center workers are parking or being dropped off for their shifts. People are making their way into a nearby Planet Fitness.
But on the other side of the parking lot, scores of young children dash out of cars and through a mall entrance. They’re not playing hooky; they’re going to school in a former J.C. Penney store. And if all goes according to plan, they will keep going there for years as the school adds more grades and takes over more of the mall each year.
Developers across the country are putting new schools in struggling malls, a growing trend that serves several purposes: increasing educational opportunity, revitalizing communities and reimagining the thousands of vacant retail spaces that make once-vibrant shopping centers a blight.
“We’ve definitely seen all kinds of alternative uses of malls — to redevelop, repurpose and reimagine them,” said Thomas Dobrowski, vice chairman of the capital markets group at Newmark, a real estate services company.
Mr. Dobrowski added that more mall owners were coming around to the idea of adding schools as retail tenants dropped out. “I remember malls where 10,000 to 15,000 square feet was devoted to schools,” he said. “Now, more higher education and schools are wanting to take vacant anchor boxes for full educational use. That could be 80,000 square feet and up.”
Nationally, mall vacancy rates were about 10.3 percent in the fourth quarter of last year, up from 10.2 percent in the pandemic, according to a report from Moody’s Analytics.
Community malls like the one in Sumter have been hit even harder as consumer tastes change. “Retailers that have traditionally been mall-based have been closing underperforming stores and are now looking to smaller-format open-air suburban centers for expansion,” the commercial real estate services firm CBRE said a recent report.
But at Sumter Mall, a combination of community initiative, philanthropic interest and pragmatism on the part of the mall owner, the Hull Property Group, has led to the creation of a new tenant, Liberty STEAM Charter School.
The school was started five years ago by Greg A. Thompson, a local businessman and philanthropist, who was seeking a way to bolster the fortunes of his hometown and help him attract workers. Liberty STEAM plans to add a grade a year, with a fourth grade coming in the fall.
“Our mission is to prove that we can give a world-class education to everyone and, in particular, to our disadvantaged children,” he said. In Sumter, only 30 percent of the students can read, write or do math at their grade level.
Liberty STEAM did not start in a mall. Initially, classes were held in an unused elementary school in an underserved part of Sumter, but the school quickly outgrew the space (though the building still houses kindergarten and first grade).
After looking for a larger space, Mr. Thompson, the founder and chief executive of the Thompson Construction Group, chose the enormous, mostly empty mall after failing to reach deals for more traditional school properties in the town, which has a population of about 43,000. It gives Liberty STEAM room to keep adding grades for the next decade, as well as other services for children.
“We want to focus on the whole child,” Mr. Thompson said. “As we grow the school, we’ve had conversations to have a doctor there. We want to have a little clinic and an eye doctor there, too.”
Mr. Dobrowski said the arrangement offered many advantages for schools and landlords. Malls are generally in highly trafficked areas, so they are easy to get to. And they can be a blank canvas for a school to reimagine how it wants the inside to look.
For owners, selling or renting the spot of a former anchor tenant to a school brings life to what was a dark, empty part of a vast mall, revitalizing 400,000 square feet or more of unused space. The conversions are also a great driver of good will in the community.
“You’re not going to get the same rent as a retail tenant or a medical office tenant,” Mr. Dobrowski said. “It has to be used more as, ‘How can I improve the community and ingratiate myself here?’”
In Sumter, Trevor T. Ivey, the executive director of Liberty STEAM, said moving into the mall aligned with the school’s mission of revitalization. “It’s important for people to understand that the mall fits in with the approach that we’re going to revitalize our community and renovate its buildings,” he said.
High Point Academy in Spartanburg, S.C., is an example of a school’s being part of a larger redesign. It operates in a space in an outlet mall that once housed a Waccamaw Pottery store, which was home to a church before the academy moved in. The mall now has a volleyball center and a medical office to supplement the school.
James M. Hull, founder of the Hull Property Group, which owns and manages the Sumter Mall and another three dozen malls in 18 states, said Liberty STEAM was the third school in one of the company’s malls. The other two are in Greenwood, S.C., and Augusta, Ga.
When he considered putting schools in his malls, he did so with an eye toward the overall return on the investment. “I am not doing any of this philanthropically,” he said. “I’m doing this because it’s in my best financial interest to be a good steward of the property.”
But for Mr. Thompson, who sits on Sumter’s Development Board, the investment in Liberty STEAM and the mall is part of an initiative to help revitalize the town and make sure his businesses can attract workers to the area and retain them.
“If we want to have sustainable success, we need to have educational success to create the work force of the future,” he said.
KIPP, the national charter school operator, has about a half-dozen schools in malls, with a high school being built inside a former Macy’s store in Nashville.
“We left the four walls and mixed it up on the inside,” said Marc Gauthier, founding principal at KIPP Antioch Global Middle and High Schools, which will run the high school in the Macy’s shell. “Where the men’s department was will be our weight room. Where the escalators once were, we’re drawing in some natural light. The bottom floor will be our science lab.”
Reworking the Macy’s was cheaper than building a high school on farmland, which was all that was available. “Having built ground-up buildings and knowing how expensive that is, it was attractive to already have a shell, the utilities, the zoning, the parking,” said Daniel Gennaoui, who was the chief financial officer for the KIPP schools in Nashville.
The renovation cost about $200 to $250 a square foot, whereas new construction would have been upward of $300 a square foot. “We’re very cost conscious,” he said. “Every dollar we spend on a school building is a dollar we’re not spending on a teacher or a program.”
Mr. Thompson said he wanted the school to serve as a model for improving education in the Southeast.
“More money doesn’t solve the problem,” he said. “The right vision, the right leaders and the right followers solves the problem.”
