Despite recent closings, some think Valle Vista Mall's Still Sitting Pretty

HARLINGEN - In the midst of construction, steady growth and improvements all over the city, mention of aging Valle Vista Mall raises a question mark with many Harlingen residents. With customers and even some stores turning to new venues like the outlet mall in Mercedes and the brand-new Kohl's shopping center just west of the mall, many here have been left to wonder what will become of Harlingen's mall.

But among the big names in city government, business and real estate, optimism reigns.

Mayor Chris Boswell said he is pleased with the mall's progress.

"I have to congratulate and applaud Valle Vista Mall for investing over $5 million to improve the appearance and look of the mall," he said Saturday.

A spokesman for Harlingen's Economic Development Corporation and three longtime city business leaders say there is not even the slightest possibility that Valle Vista will close, despite a national recession. There remains a need for a major shopping mall in Harlingen, say former Harlingen Area Chamber of Commerce President David Allex and real estate agents Connie de la Garza and Tip Johnston.

"I don't look for that mall to fold anytime in the future," Johnston said. "In fact, I look for it to come back, once the general area comes back up. That's got to be one of the best corners in South Texas."

Business decline at Valle Vista has been a talking point in past political campaigns, but local business figures say city leaders made a wise move pledging $1.2 million in sales tax reimbursement for mall improvements.

Investing tax money in Valle Vista Mall will pay off in the long run, Allex said.

"I have a lot of confidence in our City Commission and mayor," he said. "I know they wouldn't put money in something they thought would go belly up."

Johnston, a longtime real estate broker, said, "I don't think there's anything wrong with the city trying to keep that property as a viable retail center. It's one of the best corners in the Valley.

"Simon Properties owns that property. They're a huge outfit."

De la Garza, a former Harlingen mayor, airport board member and longtime real estate agent and property appraiser, sees the city's participation in mall improvements as a solid decision.

"I don't have any problem with it," he said. "There's no question in my mind that the investment that the city made, along with the Simon Group, is good for the overall economy."

Competition from booming malls in Brownsville and McAllen, and especially Simon's own bustling Rio Grande Valley Premium Outlets at Mercedes is tough.

Malls cannot become stagnant, De la Garza said.

"Competition is very, very keen in the Valley and all over the nation and these upgrades have to be made to keep up with the competition," he said. "That ensures that Valle Vista Mall will be around a lot, lot longer."

A statement issued by mall owner Simon's public relations firm, Dancie Perugini Ware, lists improvements at Valle Vista:
* The Food Court is being updated with new furniture.
* Saltillo tile throughout the center was replaced with neutral-colored tile.
* New doors and entrances and new uplighting is being installed at all entrances.
* Family friendly restrooms with amenities such as toilets suitable for children and diaper vending units have been installed.
* New soft seating areas were added in front of anchor stores and the center court with a variety of fabric and leather chairs and settees.
* New skylights have been installed. Cantera columns were replaced with modern metal finishes.
* Security officers were equipped with Segway vehicles for quick and quiet movement around the mall and parking lots.
Simon had the parking lot repaved in 2008, too.

Although interior and exterior improvements are almost complete, the departure of two more stores brings the total of vacant retail spaces to more than 15 of the mall's 80-plus retail spaces.

The now-vacant stores include Mervyns and Steve & Barry's, which left the mall last year.

Marshalls will move to the new Kohl's shopping center and open there in the fall. The Rex electronics store is closing its location and is likely to be gone by the end of January.

Rex stores corporate headquarters in Dayton, Ohio, did not provide information on the number of its stores that have closed. However, there are many stories from local newspapers on the Internet about local Rex outlets shutting their doors.

A 99-cent store next to longtime anchor Sears also left the mall last year.

Despite those closings, new stores have opened in the mall, Johnston said.

Boswell praised the "aggressive efforts to bring new stores, including (apparel retailer) Aeropostale, Perfumania and Circuit City."

Boswell said another apparel retailer, Forever 21, has indicated a desire to take over the lease of Mervyns.

Simon Properties would not release the square footage of the currently vacant retail areas at Valle Vista Mall, nor would it disclose the mall's total square footage.

A statement from Simon Properties said it is "committed to bringing our shoppers a diverse variety of services and products to fulfill their needs, including the tool sale in our parking lot."

A truckload tool sale in the mall parking lot offering inexpensive merchandise "has come to Valle Vista Mall for several years now and is very popular with our customer base," the statement added.

Simon Properties CEO David Simon said in a Jan. 7 Wall Street Journal article that the company plans to hold firm on its mall rental rates as much as possible, despite the recession.

"If we have an existing lease with a national retailer, there is no concession being granted," Simon said.

"Renewal and new leases are subject to negotiation," he said. "Are those negotiations more difficult because of the environment? Naturally, yes."

If Simon Properties is charging rents that are too high for the local market, Johnston said, he believes they will adjust.

But the retail outlook for the city is good, he said.

"For whatever reason, our retail's been looking good for the past several months, compared with some other parts of the Valley," Johnston said.

Bill Martin, chief executive officer of the Harlingen Economic Development Corporation, said Harlingen is showing very positive economic growth, with 10 percent sales tax growth in the past year.

Besides the multimillion-dollar improvement program at Valle Vista backed by a promise of $1.2 million in city reimbursement from sales tax revenue increases, new developments such as Harlingen Corners half a mile west of the mall are solid indicators that the city is growing, Martin said.

"The community invested in infrastructure at the new Harlingen Corners shopping center and, of course, Kohl's is open, the steakhouse is open, Bed, Bath & Beyond and that other portion should open this spring," Martin said.

When a city invests in infrastructure, private investment follows, he said.

The same type of cooperation brought Lowe's and Texas Roadhouse and is bringing in a new Denny's restaurant, Martin said.

Harlingen's growth is slower than cities right on the border, he said. But it is steady growth, not as sensitive to peso devaluations in Mexico.
"Instead of 80 to 100 percent growth every 10 years, we've got 40 to 50 percent growth," he said.

Allex said that when he helped to attract Valle Vista Mall around 1970, the city was providing local shoppers.

"We brought in 3,000 manufacturing jobs in two years," he said, referring to companies such as Levi Strauss & Co. and Fruit of the Loom, which have since moved overseas or closed.

If there is a slowdown at Valle Vista, it is because the local economy and the national recession have impacted shopping, Johnston said.

Harlingen is getting many other new stores and restaurants, Johnston said. The city's investment in Valle Vista only makes sense, he said.

Even though there is a national recession and a lot of retail chain stores are closing their doors, this is no time to throw in the towel, De la Garza said.

"A lot of retail is shutting down, but because they're shutting down doesn't mean you cut back on improving what you have," De la Garza said.

Long-term prospects for Valle Vista are good, Johnston said.

"Do I think it's going to close? No," Johnston said. "Do I think other people are eventually going to come in to the mall? Yeah, it's just a good location."