One of America’s first malls, Northgate is still a commerce center.

When designer Victor Gruen created the first mall about 50 years ago, its design was revolutionary: a fully enclosed shopping center with storefronts all facing toward the building’s interior—all surrounded by a parking lot. Gruen’s vision that malls would become the gathering places of modern America was lost in the construction frenzy that would lead to huge shopping meccas in nearly every U.S. community. In fact, by the time he died in 1980, he reportedly disavowed the modern mall, which had led to the demise of many small businesses.

Today, nearly 20 percent of the 2,000 largest malls in the United States are failing, according to an interview in Newsweek with Ellen Dunham-Jones, author of “Retrofitting Suburbia,” a collection of case studies of suburban property redevelopments and the director of the architecture program at Georgia Institute of Technology.

Only three enclosed shopping malls have been built in the United States since 2005; none were built in 2008 and only one is planned to open in 2009. A driving force in the decline of the American shopping mall as we know it is a realization that the model is not sustainable, either economically or environmentally. Centralized shopping is not about to disappear from the American landscape, however.

Malls built over the last few decades are being refurbished into so-called lifestyle centers, a term created by developers to describe what may be the world’s oldest location for retail commerce: an urban mixed-use community. More and more, the nation’s dead malls—as they are known in the parlance of an Internet subculture that has sprouted up to track the fate of failing mall properties—are being turned inside out. Buildings are taking a new form as vibrant, walkable neighborhood centers that are tied into the street grids of surrounding neighborhoods and by connections to public transit and bike and walking paths. Some envision these new spaces as a major force toward the re-urbanization of the United States.

Seattle’s Northgate Mall—one of the first malls designed by Gruen—is an example of this. The mall, built on top of Thornton Creek, a stream that was diverted to an underground pipe, recently underwent a multi-million-dollar remodel project that added 100,000 square feet, two plazas and several family restaurants to the aging property. Now that the mall re-model is complete, neighborhood residents and shoppers are once again flocking to Northgate Mall. And, for the first time in 50 years, this section of Thornton Creek will emerge above ground into a series of bioswales designed to slow its flow and remove pollutants before the water reaches Puget Sound.

The surrounding neighborhood—a mix of apartments and older homes to the south and east and box stores to the north—is undergoing change as well.