Monday, October 15, 2012

Texas City retail centers struggle amid Tanger hype

TEXAS CITY — The buzz in town for the week will be the opening of the Tanger Outlets, which is set for Friday. But what does the opening of the massive shopping center mean for other big retail spots, including Mall of the Mainland, Gulfway Plaza in La Marque and other big-box centers in the mid county?

A few miles away from the 350,000-square-foot, 80-store Tanger Outlets center is the nearly empty 450,000-square-foot Mall of the Mainland.

As reported first in Daily News reporter Laura Elder’s Buzz Blog on Friday, Boxer Retail, which had planned to redevelop the struggling mall, is no longer involved.

Kennedy Wilson property management took control of the retail center in June and will manage the property until it is sold.

Pacific West Bank took possession of the mall two years ago and, after initially offering it for $15.4 million, slashed the price to $9.5 million.

Kennedy Wilson’s Douglas Hauser told The Daily News there are no longer plans to redevelop the mall.

Jimmy Hayley, president of the Texas City-La Marque Chamber of Commerce, said the next owner might not be involved in retail.

“Possibly the expansion of medical facilities,” Hayley said. “Or maybe College of the Mainland when it looks at expanding its campus or possibly getting a new campus — that may make a good location.

“There are great prospects for it. I don’t know what those prospects are right now. To say something’s going to happen tomorrow, no. But there is a good potential there.”

Hayley cited the city’s plans to develop a large nature park behind the mall as an enhancement.

Empty Boxes

Mall of the Mainland, however, isn’t the only retail concern for the city. Even with all the hype of Tanger Outlets, there are some big-box retail holes on the city’s west side.

What had been the Hobby Lobby store in the Mainland Crossing shopping center is temporarily a discount Halloween store, but the space will be empty again when the spooky season passes. And the Sam’s Club on the other side of the center across from Mall of the Mainland will soon be vacant. A new Sam’s Club is under construction across the freeway in La Marque.

That will leave two 90,000-plus-square-foot retail spots vacant in the center.

In the middle is the county’s mid-county annex, which houses the Galveston County Health District and its clinics, the Galveston Central Appraisal District and other county government offices. It was hoped that once that complex opened it would spur development in the area.

So far, aside from a breakfast-only restaurant, retail hasn’t rushed to the center.

The Galveston County branch of the Red Cross moved its offices to the center, and the University of Texas Medical Branch operates a large clinic there, along with a handful of small stores.

Closer to the center of town is the vacant former K-mart at Palmer Highway and state Highway 146.

H-E-B purchased the property and was rumored to be building a new concept store.

But the public affairs director for the company’s Houston division said nothing’s happening.

“Everything’s on hold,” H-E-B’s Cyndy Garza said. “We still own the property, and a decision on plans has not been made yet.”

That presumably carries over to rumored plans that H-E-B would expand its store at 21st Street and Palmer.

Housing Is Key

Until the housing market picks up, retail growth might be slow or stagnant. Tanger Outlets is developing in an area that was supposed to see houses built first as part of the Lago Mar master planned community.

Instead, retail developments, including a planned 60,000-plus square foot Buc-ee’s Travel Center, came first.

There are signs that housing is picking up, Hayley said.

The Pearlbrook subdivision, near state Highway 3 and the 25th Avenue Extension on the city’s west side, has 10 to 20 lots sold or houses under construction, Hayley said.

Out on the city’s north side, David Weekley Homes’ Grand Cay Harbour subdivision has as many as 10 sites under development, Hayley said.

“(Nationally), the foreclosure rate is down and interests rates are very low and make building or refinancing a home appealing,” Hayley said.

‘Gateway To Gulf’ Picking Up

In La Marque, construction is under way on the new Sam’s Club, next door to the Walmart shopping center at Interstate 45 and FM 1764. A couple of smaller businesses, including a new marine and boat store, are under construction along I-45.

Even after losing a couple of tenants to Tanger Outlets, Gulfway Plaza, the mainland’s first outlet mall, is still about 90 percent leased. However, not all the tenants are involved in retail.

There’s Boot Kickers bingo hall, which generates a lot of traffic. There is also the College of the Mainland’s cosmetology classes, a couple of fitness centers, a Mexican food restaurant, the Texas Parks and Wildlife Department’s game wardens offices and an engineering firm, along with some retail shops.

Hayley doesn’t discount the buzz created by Tanger Outlets and eventually Buc-ee’s as helping attract other development.

“I think we will see more development on that far west side near (Tanger),” he said. “You hope that leads to more development across the area.”

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