Why Not Fill Abandoned Shopping Malls With Data Centers?

A few weeks ago I ducked out of The Daily Wire’s party at the RNC midterm convention in Dallas to hold my weekly All Access Livestream.

Most weeks I recruit one of my more impressive colleagues to discuss a recent story they had or whatever is making news that week. But that week I flew solo, ready to discuss the mood on the ground and offer my predictions on the midterms.

At some point I found myself talking about data centers, as we so often do these days. The humming behemoths used to power artificial intelligence that almost overnight became a hot button issue, not just for the midterms, but for all of American politics.

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Some, like President Donald Trump, unabashedly support data centers and the technology they power. Others, like Missouri Senator Josh Hawley, are critical of the impact they could have on communities, and wary of what AI will do for society.

And that’s just the tip of the iceberg. So it came as no surprise to me when, about halfway through the livestream, “Willie Beamen” entered the chat with this: “tell Trump to convert all the abandoned shopping malls into data centers.”

“That’s a phenomenal idea,” I said. “Willie Beamen, I might steal that and write an op-ed about it, but I’m going to give you credit.”

At The Daily Wire, we love our All Access members and we keep our promises. So I took Mr. Beamen’s question to Judge Glock, director of research and a senior fellow at the Manhattan Institute and one of the most reasonable voices on AI and data centers.

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Should we put data centers in abandoned shopping malls? It seems Willie might be onto something.

“The short answer is yes, it does make sense,” Glock says. “It is happening in places,” including the California mall where they filmed “Back To The Future.” Lifeline Data Centers converted the Eastgate Consumer Mall in Indianapolis into a partial data center in 2008, and it’s been running ever since.

Of course, there are some logistical issues, mostly related to the kind of heating and cooling infrastructure data centers require. It would also depend on the given mall, whether or not the floors could bear the weight of the servers. But by and large, Glock says that malls are pretty ideal sites for data centers.

“There’s a lot good about them. They are usually built far away from homes. They don’t need that big old parking, lot because data centers famously do not need that many employees, but the big old parking lot does mean that they’re not right next door to somebody that can complain about the noise or just the size of it,” Glock says, adding that the “parking lot or some other space could be used for a substation or whatever it is to bring in more power.”

There is a catch, however — and it caught me by surprise.

“People consistently overestimate how bad malls are doing,” Glock says. “There are a lot of what they call ‘gray malls’ out there, but we have not been building new retail or new malls for the past 16 plus years now. That actually means that the vacancy rates in these malls are pretty low.”

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The retail vacancy rate — that is, how many storefronts in shopping malls and strip malls are empty — has held steady at around 6% for the past few years. That’s down from just over 11% in 2017.

Mall values have climbed 13% since last year, the Wall Street Journal reports, “outperforming every other property type” as investors successfully fill abandoned store fronts with restaurants, gyms, escape rooms, and other non-retail businesses.

There are somewhere between 150 and 200 abandoned or mostly abandoned malls in the United States, and about 900 others that may not be going anywhere. Perhaps that’s why the CEO of Simon Property Group — one of the biggest investors in malls and retail spaces in the country — said in May that they couldn’t find any property in their portfolio “that makes sense for a data center.”

So maybe abandoned malls don’t hold the key to solving our data center problem. But the reason why — an unexpected mall renaissance — is a good reminder that, while technology and culture may be cyclical, certain things will always be with us. In this case, big, concrete buildings.

Data centers “are just big, ugly, concrete boxes,” Glock says. But “America is just filled with big, ugly concrete bodies. We interface with them. That’s called living in America. They give us all our stuff, we get all of our goods sold from Amazon from them, that’s how things work.”

We’ll crack this thing one day. Until then, become an All Access member and perhaps you too can have your policy suggestions explored here at The Daily Wire.

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