http://www.caller.com/news/2008/feb/...me-mall-their/
Prospective mall tenants reassessing their plans
By Beth Wilson
Saturday, February 9, 2008
CORPUS CHRISTI — Developers planning a Westside outdoor mall won't close on the land this month, saying the land deal is on hold indefinitely until prospective tenants gain confidence in the economy.
Ryan Gaston, with Hawkins Cos., one of the two developers involved in the project called Crosstown Commons, said they won't buy the land until tenants confirm they'll move in.
"We're still working on it," he said. "You have to have tenants to build a lifestyle center."
The project planned for 227 acres at Crosstown Expressway and Holly Road stirred community debate last summer with the developers' request for tax incentives from the city, the first such request for retail development. The City Council approved a deal in June granting up to $40 million in incentives based on size of the development.
Gaston said the developers still plan to build the mall, which had been expected to start construction in July.
"We've got millions of dollars in this project and that's not money we expect to lose," he said.
He couldn't give an updated schedule, but said construction is expected to start three to six months after closing on the land.
City Manager Skip Noe said this delay isn't surprising, given the talk about a recession and the need for nationwide economic stimulus.
"We'd prefer that things worked more quickly, but we understand we can't control the national economy," he said.
The city's incentive agreement gives the developers seven years to build the mall. Developers won't receive tax incentives until the mall starts bringing in sales and property tax. Therefore, the city wouldn't be out anything but future revenue if the mall isn't built.
Gaston said retailers nationwide are reassessing their expansion plans, causing many of those interested in this project to wait.
"They're basically saying give us some time so we can work through what's going on with the economy," he said.
He would not name any of those interested tenants.
In June, closing on the land appeared imminent and developers said quick action by the City Council would be crucial.
The closing has been delayed several times and was expected this month.
Gaston sent a letter dated Thursday to Mayor Henry Garrett, mentioning the national retail industry's struggles and how they contributed to the need for another extension on the land deal.
The letter says representatives will be in town in the next few weeks to give further updates on the project.
Matthew Cravey, president of Cravey Real Estate Services, which represents the land sellers, said the sellers are willing to wait as long as tenants appear interested.
"At this point, we've decided to stick with these people and let them work out their situation than to start all over with somebody else," he said.
Cravey said there wasn't a cost associated with this latest extension, which doesn't set another deadline.
Several City Council members reached Friday, including Garrett, said they hope the project comes through.
"I hope the economics do work out," said Councilman John Marez. "It's a great deal for Corpus Christi, for our residents and for our visitors who'd come and bring their retail dollars here."
Council members Melody Cooper and Michael McCutchon said they want to hear from the developers.
"It's not a good sign," Cooper said. "That certainly would be a shame if it didn't go through."
McCutchon and Garrett said no matter the harsh economic times, the project must be of the magnitude promised and not be whittled to a strip center with big-box stores.
"It's a good thing they're being careful to make sure they bring us a quality product to town," McCutchon said.
Joe Cisneros, president of the Corpus Christi Hispanic Chamber of Commerce, which supported the project and the incentives, said he doesn't see this delay as a sign of trouble.
"If there's a lesson here, it's strike while the iron is hot," he said, explaining that the time spent last summer debating the issue made the project more susceptible to a changing economy and competition from other retail developments that announced plans since then.
Terry Carter, president of the Corpus Christi Chamber of Commerce, took an opposite view, saying the delay shows the city and developers acted too hastily. Carter and the chamber have been critics of Crosstown Commons, saying the incentives would be an unfair competitive advantage over existing shopping centers built without incentives.
"You need to take the time necessary to understand all the details including the economic assumptions and projections," he said.
Contact Beth Wilson at 886-3748 or
[email protected]
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