Texas responses to mall ebb key on new uses for land, adding entertainment

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 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Now the bustle of shoppers has been replaced by the din of construction — led by Beck, whose company is clearing the way for a new $3.5 billion development of restaurants, offices and housing.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,” Beck, 43, said. “We’re simply re-purposing 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.

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.

“Dining and entertain-

ment 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.

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.

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 morning, dozens of schoolchildren escorted by teachers and parents trooped through an entrance 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.

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.

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.”