A Retail Lease on Life In Germany's 'Rust Belt'

Can long-term economic success be achieved by beating steel mills into shopping malls? If not, it won't be because Oberhausen, the city that was once the cradle of Germany's industrial Ruhr region, hasn't tried.

You might say it's Christmas at the "Mall of Europe." About 100,000 shoppers a day stroll the gleaming corridors of CentrO, a new shopping center built on the site of an old Thyssen steel works at the center of town.

CentrO is thoroughly German, from the frequency and swiftness of its bus and street-car connections to the selection of pig's knuckles and sausages for sale in its food halls. But the problem it is attempting to solve is one faced by developed countries around the world: How to create high-value service jobs to make up for a declining base of manufactured exports. The loss of manufacturing jobs is especially acute here. The city of a quarter-million inhabitants has a jobless rate of about 14 percent.

In 1758, Oberhausen was the site of the first modern iron-smelting works in the Ruhr. Germany evolved into the most manufacturing-oriented economy in the industrial world, with the Ruhr as its production heartland.

But between 1960 and 1985, Oberhausen lost 30,000 steelworks jobs. With CentrO, the city hopes to become known for shops as well as smokestacks.

The mall is not, strictly speaking, the largest shopping center in Europe, but it is the Continent's largest mixed-use complex including retail shops.

With a few exotic exceptions - Eddie Bauer, The Gap - CentrO's lineup of stores is the same found in any German town - including Oberhausen itself. Its basic concept of two-story, cruciform enclosed shopping area - a veritable cathedral of consumption - is familiar to virtually every American and not unknown in Germany.

Not just shops

But CentrO is more than just shops: It represents the relatively new concept, for Germans, of shopping as entertainment. A spokeswoman expresses the ideal: "It's not, 'Oh, gosh, I have to go into the city center to buy something,' but, 'Oh, fantastic, I can take the family along and we can shop and get something to eat and go to the movies.' "

The mall, which opened in September, includes an 11,500-seat arena suitable for a Yehudi Menuhin concert to benefit UNICEF (coming Dec. 24) and ice hockey (Dec. 26); cinemas; a 30-restaurant "gastronomy complex"; and a couple of hotels and gas stations. A huge aquarium and a marina are on the drawing boards. There is even a plan in the works for a "model neighborhood" of prefabricated houses, including a provision for would-be buyers to try them out on a rental basis before buying.

Better jobs needed

However grateful locals are for every job at CentrO, even mopping floors, the service sector must provide higher-value jobs if it is ever to truly replace lost manufacturing work. Coca-Cola has announced that in the next couple of years it will move its German headquarters from nearby Essen to a site near CentrO.

At issue is not only a transformation from manufacturing to service employment, but a restructuring of the retail sector from traditional city centers to American-style malls. This has implications not only for the retailers but for the very life and vitality of the city centers.

City governments in France, Italy, Spain, and even free-wheeling Britain are taking or considering action against the proliferation of suburban malls.

"Our members are overwhelming small and mid-size firms in city and district centers," says Thomas Werz, spokesman for the retailers' association HDE in Cologne, Germany. "We would be very cautious in our dealings with green-fields shopping centers."

Oberhausen officials, having embraced "structural change" with enthusiasm, counter that theirs is no "green-fields" complex, chewing up virgin land, but one very near the city center. And city spokesman Helmut Kawohl counters complaints that CentrO is merely sucking retail business from neighboring cities with studies showing that in fact, locals for years tended to shop out of town and are now returning. Developers also hope to woo "shopping tourists" from Belgium and the Netherlands; their purchases, even of consumer goods, count as "exports."

Ulrich Heilemann, vice president of the Rhine-Westphalian Institute for Economic Research in Essen, is skeptical of CentrO - not about its commercial success as a retail center, but as a model for the whole region. "We can't just live from consumption."