What might the future hold for Highland Mall?
Austin Business Journal - by Kate Harrington ABJ Staff
http://www.bizjournals.com/austin/stories/2009/04/20/story1.html?b=1240200000^1812383#
Ask anyone who’s lived in Austin for more than 10 years, and chances are they will be able to recall the days when Highland Mall was the city’s premiere shopping destination.
Arguably now closer to the nadir of its existence, the mall has suffered the closing of two of its anchors and declining occupancy. More recently, it’s been sued by subsidiaries of Dillard’s Inc. and been the target of a politically and racially charged protest.
According to information from Simon Property Group Inc., the mall’s occupancy stood at 60 percent at the end of 2008. Simon [NYSE: SPG] and General Growth Properties Inc. [NYSE: GGP] co-own the mall, which spans about 1 million square feet on about 80 acres.
Nationally, enclosed shopping malls built in the 1970s and 1980s are rapidly giving way to open-air lifestyle centers, said Erin Hershkowitz, a spokesperson for the International Council of Shopping Centers. Before the current credit crunch, many malls had even started incorporating open-air elements in spaces that large anchors had vacated, she said.
Simon representatives declined to comment on the mall’s future. Jim Graham, senior director of public affairs for General Growth, said the company has no specific plans that it can share.
The Austin Business Journal asked local real estate experts to speculate and visualize what could be done on Highland Mall’s site if the property were to become available for redevelopment. Here’s what they said.
Andy Sarwal | Lead developer, East Avenue Investment Group LP
“Look at the immediate surroundings in every direction, and it’s generally what people refer to as Class B,” Sarwal said. “It could be Class B office or retail space, or Class A industrial. I don’t anticipate seeing Highland Mall transform into the next Domain or Mueller or La Frontera.
“Each of those other three projects have unique calling cards that would be too close to Highland Mall to duplicate, yet too far away to directly piggyback on.”
But its size means the property has the flexibility to be transformed for one large, single user or for multiple users, he said. And the site’s attributes, including its size and proximity to freeways and a future rail stop, could make it an ideal home for a user with a primary need for connectivity and a central location, Sarwal said.
Jim Sussman | Austin principal, STG Design Inc.
“In considering visionary makeovers, one concept is to create a Central Texas Medical School complex on this site,” Sussman said.
A medical school complex on the Highland Mall site could be shared by entities such as the University of Texas, Texas A&M and Baylor University, he added. A medical center redevelopment could also incorporate nursing schools, R&D facilities, medical office buildings, minor emergency outpatient clinics, hotels, and complementary retail and dining, Sussman said.
“With the possibility of multiple front doors serving each major entity, each school can become a micro-city unto itself, allowing both autonomy and the benefits that the critical mass of the entire development might provide. Rooftops could be developed as sky gardens and/or photovoltaic sunflower fields; at the ground level, healing gardens and green space.”
Travis Waldrop | Retail specialist and investment sales broker, NAI Austin
“I think it would be a good candidate for another residential mixed-use development in the short term,” Waldrop said of the Highland Mall site. “Long term, it might have some office viability, but our office market has some challenges. … We’re delivering a large amount of space that’s right now having some occupancy problems.”
A mixed-use project that started with retail and residential might mimic other mixed-use Austin projects, such as The Triangle or The Domain, he said, and provide much-needed infill housing. While inconsistent performance of the retail dollar in that area has led to tenancy problems, Waldrop said a mixed-use center between the Crestview Station project and Mueller — and near a confluence of major roads — could draw users and perhaps an educational component similar to Mueller.
Daniel Roth | Principal, Southwest Strategies Group
“The property could be repurposed, but I don’t see it long term as a mall,” Roth said. “The question is what would it be in its new purpose. Our specialty, and I think something a lot of people would look at, is mixed-use — maybe with retail pushed to the edges. It’s big enough to maybe have some residential and some office. I think there may be some possible ways that public entities could be interested in a property like that. We’re the home of state, county and city government, and lots of public education facilities. If it was handed to me tomorrow, I’d be approaching all those entities as well as retailers and residential.”
Crestview Station and Mueller are models for the type of mixed-use development that could occupy the Highland Mall site, he said.
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Does that not sound strange to anyone else??? I could understand rebuilding it in the same place, but moving it? Smells fishy...
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