Ghost Mall? Retail Bagpipes Sound a Dirge for Highland Mall

Retail bagpipes sound a dirge for Highland Mall

Aerial view of Highland Mall
Aerial view of Highland Mall (Photo courtesy of General Growth Properties)

"Highland Mall is the most centrally located shopping center in Austin," declares the current fact sheet from mall manager General Growth Properties. That wasn't always the case. Now surrounded by the city that's grown around it, it was a destination when it opened in 1971 as Austin's first "suburban" retail mall. Since then, while Highland itself has grown, so have the city's competing shopping options. Aside from newer, traditional malls like Barton Creek Square or Lakeline, more urbanist, deluxe destinations like the nascent Mueller redevelopment and the Domain have cropped up, drawing stores and anchor tenants from the aging center. Nowadays, only a fraction of the 5,900 parking spaces at Highland are full, and hundreds of thousands of its million-plus square feet of retail area lie empty. With the recent announcement that Dillard's two men's and women's stores will be closing this year, the future of Highland Mall seems dim.

Warnings have sounded about the mall's flagging fortunes for years. A 2008 analysis commissioned by Capital Metro regarding its planned Highland Mall commuter rail station – the linchpin to any future redevelopment of the area – politely noted the mall "has shown some signs of decline," facing competition from newer retailers. It also acknowledged the 2006 closure of anchor store JCPenney "resulting in higher than normal vacancies" in that end of the mall. (That space now houses FEMA staging operations for Central Texas, firing the antenna of conspiracy theorists locally and across the Web.)

The store vacancies plaguing the former Penney portal – now sealed up and somewhat sadly rechristened the children's "fun zone," with the addition of an often-still toy train ride – have metastasized. All four stores across from the food court – prime retail space – are shuttered. National retailers such as J.Crew and Banana Republic have fled to the Domain, replaced by interchangeable discount retailers with names like Fame and Flo. There are some survivors: The gothic heart of Hot Topic still thumps with prepackaged teenage rebellion; Anchor Blue continues its brisk business of selling new T-shirts that look like old T-shirts; and the constantly churning Forever 21 moves enough swaths of club-ready pseudo-couture to qualify as a minianchor itself. Still, the signs are unmistakable: On a recent walk-through, I counted more than 30 closed stores. (It's hard to get an exact number, as so many empty storefronts sit next to one another, often covered up together.)

The vacancies, coupled with the changing demographics of the surrounding north central neighborhood, have created a self-perpetuating perception of Highland as a "ghetto mall" (as one snarky online analysis called it). Online commenters at Yelp.com – usually more discerning than the Internet's anonymous worst – say, "If you are Latino or African-American between the ages of 13 to 18, this mall is for you," or, "If I want to be mugged, I'll go to Highland Mall." (The mall has its nostalgic defenders too, naturally, considering Austinites younger than 35 grew up along with it.)

Some infamy stems from a YouTube clip of a single confrontation at Highland Mall that, as of last look, has been viewed 155,621 times. Captured on a cell phone, the "fight" consists of about 10 seconds of shadowboxing between two young men, but the large, predominately black crowd – out and about during a rainy UT 2007 Texas Relays weekend – drew wider media attention.

In a 2008 article recounting that the largely black Relays crowd felt unfairly targeted, the Austin American-Statesman reported that the mall closed early on Relays weekend in 2007 and beefed up security for 2008 Relays weekend. While Highland Mall's popularity with minority youth and young adults hasn't fundamentally altered the mall's fabric (aside from the addition of a few retailers offering hip-hop designers), the situation is reminiscent of a Chris Rock joke: "Every town has the same two malls: the one white people go to and the one white people used to go to."

"Jointly owned by GGP and Simon [Proper­ties], the mall's future will depend on the ability of these partners to cooperatively develop a redevelopment strategy," continues the Cap Metro study. "Without further investments it is unlikely that the mall will be competitive." But the prospects of this are slim, as GGP is experiencing drastic problems of its own: the looming prospect of bankruptcy. GGP's acquisition of Highland Mall is partially to blame, as the firm became leveraged to the hilt purchasing the Rouse Co. – which owned Highland, along with several other malls and planned communities – in 2004 for $12 billion. GGP's 2008 third-quarter filing stated "our potential inability to address our ... debt maturities in a satisfactory fashion raises substantial doubts as to our ability to continue as a going concern." Currently, GGP is asking its bondholders not to call in their cash just yet, as it struggles to avoid Chapter 11 bankruptcy.

"A viable redevelopment strategy for the mall will greatly influence future development potential around that station area," the study continues. And with Cap Metro's commuter line expected to launch later this year, the area is already showing signs of redevelopment; the nearby Crestview Station at Airport and North Lamar is being built up into a mixed-use development. In its valuable location, the mall itself is prime for redevelopment, especially as its car-centric, suburban style – a retail castle surrounded by an unwalkable moat of parking – has fallen out of favor for pedestrian-friendly, New Urbanist-style designs. But whatever your opinion of Highland Mall – whether you bid good riddance to another eye-glazing, Gruen Transfer-triggering temple to consumer debt and commercialism or lament the passing of an aging family friend – it would appear that without another anchor tenant willing to risk the arena, Highland Mall will be drifting off and away.

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KEYWORDS FOR THIS STORY

Highland Mall, Simon Properties, Dillards's, General Growth Properties

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