Friday, July 22, 2011

A Tale of Two Malls (and a city revitalization effort)

I know Pat has put a few posts up recently on pro-business vs. pro-free-enterprise and this seemed to fit that theme. I blogged a couple of years back on the demise of Forum 303 Mall. In it's place, they built Forum 303 Crossing. It's an industrial park that was part of a public-private deal to revitalize the mall area. The City of Arlington paid to demolish the old mall and made a property tax deal for the new structure. The Dallas Business Journal even gave it an award in 2009. It cost about $23 million to develop with the City of Arlington on the hook for about $7 million of that in demolition costs and property tax cuts.

About 5 miles north on TX-360 is another dying mall: Six Flags Mall. At the time of Forum's demolition, Six Flags Mall had a Dillard's Clearence Center (which moved to Six Flags Mall from Forum 303 the year before Forum closed), Kaplan College, a half-dead food court, a movie theater, and about 40% occupancy on their interior stores. That shot up to about 90% occupancy when Forum closed down but the bulk of those new tenants had already either went elsewhere or closed completely in the two years between Forum's closing and its demolition. But a lot of people were hopeful that the upcoming new Cowboys Stadium in Arlington would revitalize the area including Six Flags Mall. I was highly skeptical about that claim since across TX-360 the Jerrydome was situating itself right next to a Six Flags and the Rangers Stadium. How would it revitalize the area more than attractions that are open much more often during the year?

Yesterday I had some free time in Arlington so I decided check out both properties. My first stop was Six Flags Mall. I don't know if you noticed but the high in the Metroplex has been over 100F for 19 days straight. There was no air conditioning on in the interior of Six Flags Mall. The old Sears wing was roped off. I counted 4 in-line stores remaining. Kaplan College is gone. The food court likely died around that time (except for Italia Express which somehow hangs on). Dillard's is still alive and is air conditioned, but the latest I heard they were planning to move the Clearance Center to Irving Mall. The movie theater is also still alive and well. So at this point Six Flags Mall is a mostly dead carcass. As an added bonus, I looked up the property at the Tarrant County Tax Assessor's website. The current owner hasn't paid the property taxes on the site in about three years when it last changed hands.

Onto Forum 303 Crossing. The first thing I noticed? Kaplan College now has its campus at the Crossing. The next thing I notice? There's not another tenant there. I looked them up and found that the Crossing was sold recently for $16 million. 16 should stick out to you because its the result you get when you subtract 7 from 23.

So for $7 million the City of Arlington demolished an old abandoned property to put in a new shiny mostly-abandoned property whose only tenant dealt a crushing blow to another nearby property when it left. This move resulted in zero new jobs and zero new revenue for Arlington. Would Six Flags Mall have died on its own anyway? Absolutely, but the city certainly sped up the process. Did the Cowboys Stadium revitalize any or Arlginton? Yes. Every strip mall walking distance from the stadium is now at full capacity. There's also a new Wal-Mart near the stadium that is very busy every time I've seen it. But the revitalization didn't reach as far as Six Flags Mall and likely never will.

I'd like to point out that I don't intend this one case to be a condemnation of such public-private partnerships. They can work. And many times they do work. But I do think it's important to point out that there are risks when a government enters into such agreements. And when such arrangements do fail the government is often the partner left holding the bag.

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