It's a Mall World After All

Madrid is a city full of single-lane roads, crowded cafés and neighborhood bread shops. Some streets are devoted almost entirely to shoe stores, others to books or electronics or trendy club wear. On Sundays, in a tradition dating back 500 years, the entire Rastro neighborhood becomes a vast outdoor flea market, where shoppers can get anything from a rug to a kitchen set to an automobile wheel. So does Madrid really need an American-style megamall — one that comes with a 250-m ski run?

A developer called Mills Corp., based in Arlington, Virginia, is betting yes, with a...