A day after revealing a failed terrorist plot to blow up a shopping mall in Columbus, Ohio, Attorney General John Ashcroft addressed chief executives from several major retailers at the National Retail Federation’s Washington headquarters late Tuesday afternoon. And while the NRF’s annual board meeting — and Ashcroft’s appearance — had been planned for a while, the meeting couldn’t have been more timely.

Although the NRF barred journalists from its offices to talk to Ashcroft, after the meeting several industry leaders said the Ohio threat was discussed, as was the Bush administration’s antiterrorism efforts and the Patriot Act, passed just weeks after the Sept. 11, 2001 attacks, which greatly expanded law enforcement’s reach.

This story first appeared in the June 16, 2004 issue of WWD. Subscribe Today.

Allen Questrom, chairman and chief executive officer of J.C. Penney, said Ashcroft’s message to retailers was “that security is number one on the agenda. Terrorism is our new war. It’s the Third World War for America and I think that’s everybody’s focus.”

As for the safety of malls, Questrom said nothing can be 100 percent secure. “You have to attack the [terrorist] cells to try and find them. They didn’t find the [Columbus suspect] in a mall, they found him in the process of thinking and designing a way to attack a mall.

“At Penney’s, we’ve put a lot of attention on having employees be aware in our stores of suspicious packages, people who look suspicious.”

When asked if the federal government is doing enough to protect malls, retailers and the general public from terrorism, Paul Charron, chairman and ceo of Liz Claiborne, Inc., said: “As long as there aren’t any successful attacks we have to believe they are doing enough. But as soon as there’s one attack, we’ll all say they haven’t done enough.”

Charron added, “It seemed to me he’s [Ashcroft] pretty damned serious about doing everything he can.”

Daniel Butler, vice president of retail operations for the NRF, noted that since 9/11 retailers and shopping centers are limiting access to rooftops, enforcing parking regulations and increasing the use of cameras and off-site digital remote monitoring, which allows security to observe multiple locations from a centralized location. Malls, retailers and law enforcement agencies at the local, regional and national level are trying to communicate more effectively and share information, he added

A spokesman for the International Council of Shopping Centers said the industry takes its cues from the terror alert code levels issued by the Department of Homeland Security.

“The level hasn’t increased due to this alleged plot,” he said, referring to Monday’s news from Ohio. “We’ve only been to code orange.”

At the orange level, shopping centers may implement any of the following: search vehicles as they enter parking lots, suspend deliveries and increase patrols by local police departments. In the event of a red alert, the ICSC said malls might limit the number of entrances used and employ magnometers to search bags. Security personnel could be augmented with help from local police departments.

In 2002, the latest year for which statistics are available, shopping centers spent an average of $1.30 per square foot on security, excluding municipal police departments with substations, according to the ICSC. “That is a baseline figure,” the spokesman said. “Larger centers and iconic centers are going to spend more.”

Harvey Kushner, head of the criminal justice department at Long Island University, said that, since 9/11, “very little has been done by malls to upgrade security for a variety of reasons, mainly money. The lessons learned from 9/11 haven’t been accepted by shopping mall owners.”

One of Kushner’s concerns is the quality of security guards that malls are hiring. “You cannot run security with minimum-wage employees,” he said. “The turnover rate [in security] at shopping malls is one of the worst of any industry.”

Kushner said malls are waiting for the other shoe to drop before they implement more serious measures. “It’s a disaster waiting to happen,” he explained. “It’s very hard to get in front of stockholders and say, ‘The scant amount of profit we have is going to be used on security.’”

Asa Hutchinson, undersecretary for border and transportation security at the Department of Homeland Security, urged shopping center owners to invest more in security to protect against potential terrorist attacks, in a CNN interview Tuesday evening.

Homeland Security officials did not return several calls by press time. But Hutchinson stopped short of calling for drastic measures, such as installing metal detectors in shopping centers. “Any place people gather is something al-Qaeda could target and pose a risk to,” said Hutchinson. “The private sector has to invest in security as we look to mall owners and we share intelligence with the private sector. That is part of today’s new reality.”

The executive director of one of the largest open-ended real estate funds, who requested anonymity, said that mall owners are reluctant to take certain security measures because of liability concerns. The other reason is cost. Security is paid for by common area maintenance charges, or CAM, the brunt of which are carried by the smaller stores rather than by the anchors.

“CAM charges have become so high due to increases in insurance and security costs,” the director said. “The in-line tenants are choking. A lot of capital is passed through CAM, including renovations and capital improvements.”

Like modern town centers, malls have become a major part of America’s social fabric. In addition to providing shopping, many malls have morphed into lifestyle centers with movie theaters and restaurants that are destinations for the entire family. Young mothers and senior citizens have also staked a claim, with the former pushing infants in carriages and the latter forming fitness groups across the country. Most mornings around 8 a.m. packs of Gray Panthers in sweat suits and sneakers can be seen doing laps past Victoria’s Secret and Gap.

It’s no wonder a terrorist threat to a mall has the potential to strike more fear in Americans than many other targets. After all, it could happen in Anytown, U.S.A.

Shopping centers are also a major engine of the economy, accounting for $1.98 trillion in sales in 2003 and employing 17.6 million people, according to the ICSC.

Butler said the NRF sees a correlation between organized retail crime and terrorist activity and has funded organized crime initiatives.

“Any place you have people gathering in large numbers is an appealing target to terrorists,” said Butler. “It’s a soft target and in this case [in Ohio] I think they were looking for some place that wasn’t expected. The element of surprise is something terrorists look for and retailers try to minimize that.”

The ICSC said the industry is making its own efforts to train personnel. In July, heads of corporate security at shopping centers are scheduled to participate in terrorism security training at the headquarters of the Federal Bureau of Investigation in Quantico, Va. The ICSC holds an annual security conference and, in the past, has invited Israeli security consultants to speak. The Department of Homeland Security offers a baseline course several times a month in various locations.

Chris Grniet, vice president of security, consulting and engineering services at Kroll Inc., said shopping malls in general have been improving security standards in recent years, but how far to go has become a topic of debate.

“The battle has been raging about closed-circuit TV,” he said. “Unless malls all put up a disclaimer, they may be treading on the rights of privacy of the American public.”

Grniet said that in general, malls with higher crime rates ultimately fail, and crimes such as robbery and abductions indicate a poor security program. Shopping centers have also been adept at keeping news of crime out of the press.

“Major family destinations that rely solely on people’s safety and security — bad things don’t happen there,” he said. “Malls may try to keep this type of stuff quiet, but the more publicity that’s made of these credible or noncredible threats, the more people will be on alert.”

The Columbus terror plot follows a report in April that a Los Angeles mall was the possible target of an attack.

Westfield Shoppingtown in Century City, Calif., was one of the largest of the Los Angeles malls listed as a possible target in April as word spread of an unspecified mall attack near the vicinity of a federal building. The threat turned out to be a hoax. Katy Dickey, a spokeswoman for the property, declined to comment on what, if any, measures have been put in place since April. “The safety of our properties, employees and customers is always a priority for Westfield,” she said. “It doesn’t take a threat of an incident to take security very seriously.”

David Contis, chief operating officer of Los Angeles-based Macerich Co., a developer of 70 malls in the U.S., said he works closely with Department of Homeland Security and other federal and state authorities. “We have been assured that we will be immediately notified if and when there is a specific threat related to a shopping mall,” he said.

There have been some false alarms but most people say, better safe than sorry. South Coast Plaza, the tony luxury mall in Costa Mesa, Calif., evacuated a portion of its center recently because of an unidentified brown box located outside the Ron Herman store, according to Ron Herman, owner of that and four other namesake units in Southern California. “[South Coast Plaza] told all of our people to leave the store,” he said. “The mall police and Costa Mesa police came by — they called the bomb squad and evacuated more of the mall. This box ended up having sweatshirts in it going to one of the stores. The delivery guy dropped it off his cart and it didn’t have a packing slip.”

Susan Schaeff, general manager of The Shops on Lane Avenue in Upper Arlington, Ohio, in close proximity of Columbus and of Ohio State University, said center officials can evacuate the 200,000 square feet of selling space within seven minutes of a warning.

“When a warning goes out, there is not one inch of the property that doesn’t hear it,” said Schaeff. “We use a certain word that is communicated to each store, which then is responsible for guiding employees and customers to exits and then to security command posts.”

The renovated shopping center is both an indoor and outdoor complex boasting such stores as an Ann Taylor Loft, Talbots, Talbot Petite, Coldwater Creek and Casual Corner as well as a Wild Oats organic grocery store and several restaurants.

Shopping centers will continue to walk a fine line until they find what the public is willing to accept in order to feel safe.

Edie Weiner, a futurist with Weiner, Edrich, Brown Inc., said, “A big part of our maturing process over the coming years will be seeing how much we can tolerate and continue to keep our freedoms. Our choice is to run up enormous tabs in trying to protect everything, or coming to grips with the fact that we’re not going to be able to that. I’m not being an apologist for the malls, but there’s no way that we can secure all of the properties through which terrorism can be accomplished.”

— Sharon Edelson, with contributions from Kristi Ellis and Joanna Ramey, Washington and Kristin Young, Los Angeles

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