Monday, June 26, 2017

a Vision of Shopping’s Future

DALLAS — Scott Beck, the chief executive of a local real estate company, remembers riding his bike as a child to Valley View Center, a shopping mall in North Dallas. Cars filled the vast parking lot and anchor stores like Bloomingdale’s, J. C. Penney and Sears teemed with customers.
Now, the bustle of shoppers has been replaced by the din of construction — led by Mr. Beck, whose company is clearing the way for a new $3.5 billion development of restaurants, offices and housing.
“We’re not trying to repurpose the mall,” Mr. Beck, 43, said. “We’re simply repurposing the land.”
Many malls across America have hit tough times, squeezed by changing demographics and competition from e-commerce, discount stores and newer malls with more diverse offerings. Morningstar Credit Ratings recently called the changes in the industry a “seismic shift” and warned of more financial pain ahead. Hundreds of department stores, mall anchors for decades, are expected to shut their doors this year.
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The exterior of a Sears at Valley View Center in Dallas. It was the first and the last store at the mall, which is to be the site of a new $3.5 billion development. CreditAllison V. Smith for The New York Times
Several shopping centers in Texas give a peek into how mall owners and developers are responding. In spots where the shopping activity has slowed, the response is clear: Move away from strictly shopping, and expand the mix to include more restaurants and entertainment, or health care and education. Or, in the case of Valley View Center, start over from scratch.
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“Dining and entertainment is the new anchor — not Sears, not Macy’s,” said Allan Davidov of Misuma Holdings, based in Beverly Hills, Calif., which is transforming two shopping centers in Austin, Tex.
At Grapevine Mills, a popular shopping destinations in North Texas, the “experiential” formula is a major part of the marketing strategy.
Owned by Simon Property Group, one of the country’s biggest retail real estate owners, Grapevine Mills feels almost like an amusement park. In addition to more than 200 retail outlets and restaurants, it has a Sea Life aquarium, a Legoland and a Round One Bowling and Amusement, which includes 24 lanes of bowling, billiards, video games and a karaoke studio.
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Ember Kirkland ate ice cream at Grapevine Mills Mall in Grapevine, Tex., one of 16 Mills-branded shopping centers nationwide. CreditAllison V. Smith for The New York Times
What was once a J.C. Penney Store is now Fieldhouse USA, a 106,000-square-foot indoor sports complex with nine volleyball and nine basketball courts.
The mall, about two miles from Dallas/Fort Worth International Airport, is one of 16 Mills-branded shopping centers nationwide. Gregg Goodman, president of the Mills division of Simon Property, said Grapevine Mills drew from a “very wide distance,” including surrounding states, with a strategy focusing heavily on families and intended to encourage repeat visits and longer stays in the mall.
On a recent Friday morning, dozens of schoolchildren escorted by teachers and parents trooped through Entrance Five to visit the aquarium and Legoland.
“You get the kids here, the parents here, everybody’s happy,” said Stephanie Zafiridis, a preschool teacher from nearby Flower Mound.
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Two sisters, Julie, 8, left, and Jessica Lacy, 9, explored Sea Life Aquarium at Grapevine Mills. Experiences are part of the marketing formula for the destination shopping center, which has more than 200 stores, a Legoland and a bowling alley. CreditAllison V. Smith for The New York Times
About 200 miles to the south in Austin, Highland Mall is getting a different kind of makeover. It is being reincarnated as the 11th campus of Austin Community College, under a nearly $900 million public-private initiative that has stirred new life into the surrounding North Austin neighborhoods.
Highland Mall opened in 1971 as Austin’s first enclosed suburban mall, but, like Valley View Center in Dallas, it was ultimately outflanked by competition from newer malls. It closed in 2015.
In 2009, RedLeaf Properties paired up with Austin Community College to convert the mall buildings into a campus to ultimately serve up to 20,000 students. The first phase opened in 2014 in a former J. C. Penney anchor store and serves about 6,000 students per semester.
The campus, four miles from downtown Austin and the Texas Capitol, will serve as the center of an 81-acre development that will include retail stores, offices, about 1,200 residential units and three new parks connected by jogging trails. The overall vision, said Matt Whelan, the founder of RedLeaf, was to transform a dying mall “into an academic-anchored mix-use area where people could learn, people could work, could live, and play and recreate.”
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The Legoland Discovery Center in Grapevine Mills. ‘Dining and entertainment is the new anchor — not Sears, not Macy’s,’ one developer said. CreditAllison V. Smith for The New York Times
The vision Mr. Beck had for Valley View Center in Dallas is even more ambitious.
The project is called Dallas Midtown and is often described as a city within a city. Renderings show clusters of office and residential towers overlooking parks and other green space. It is expected eventually to include boutique shopping, high-end restaurants, two luxury hotels, a branded surgical center, a 10-screen movie theater, an athletic club and a 20-acre park that Mr. Beck described as “our version of Manhattan’s Central Park.”
That is a far cry from the Valley View that opened in 1973, riding a wave of retail expansion and grabbing national attention when a shoe store at the mall offered a free eight-ounce steak with any purchase of $5 or more.
About a decade later, Galleria Dallas popped up as a competitor. And while the two coexisted for many years, the Galleria eventually won out.
“What effectively happened over the subsequent 15 to 20 years thereafter is that you had two malls,” Mr. Beck said. “The new shiny object, which was the Galleria, sucked the best tenants out of the Valley View Mall.”
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Ehryn Jones, 2, lounging in a pool of Legos at Legoland in Grapevine Mills. ‘You get the kids here, the parents here, everybody’s happy,’ a recent visitor said. CreditAllison V. Smith for The New York Times
Today, Sears is the only remaining store, though not for long. It is scheduled to close in two weeks, and a black-and-yellow “Store Closing” banner hangs just under the roof near the entrance.
The rest of the mall, much of which has been closed off for demolition, was virtually devoid of foot traffic, except for a pair of security guards and a few other pedestrians. Colter’s Barbecue, which has operated at the mall for more than two decades, had served only four or five customers by the middle of the afternoon. “When we opened in 1995,” recalled the manager, Santos Castro, “we had four registers open all day.”
Louis Schultz, 71, a retired Navy officer, walked down a near-deserted corridor after seeing a movie at the AMC theater.
“You can walk around and it’s like a ghost town,” Mr. Schultz said. “It’s an area that just sort of got neglected.”
Mr. Beck said he had mixed emotions about all the changes, as he remembered Valley View in its glory days and looked ahead to the vast new development about to replace it.
“What I’m excited about,” Mr. Beck said this week, “is being able to restore this portion of Dallas to the stature that it really had when I was a kid, and the opportunities it brings to the surrounding neighborhoods.”

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