Developer Outlines Challenges on Mall

As Elk Grove City Council members step up their demands for progress on , Elk Grove Patch recently spoke with an executive at developer Howard Hughes Corporation about some of the challenges plaguing the project.

Christopher Curry, senior executive vice president of development at Texas-based Howard Hughes Corp., said several changes in the global retail market put Elk Grove at a disadvantage, but that his company is committed to moving forward.

Retailers are not only are opening fewer stores these days, they’re also changing how and where they build, said Curry.

“Retail is a very dynamic marketplace and obviously the impacts of the Internet are changing the way people do business and the amount of square footage they need,” said Curry. “We’re reacting to those market forces and adjusting our strategy accordingly.”

Those companies that are ready to open new stores often have a plethora of options, Curry said.

“A lot of people are closing stores, and retailers have the opportunity to infill locations that are already opened with a track record, so they know what they’re getting into,” he said. “The retailers will go with the lowest-hanging fruit.”

“As you stack up Elk Grove to the rest of the country…it’s not one of the more attractive opportunities for a retailer who can go into an existing opportunity rather than waiting for the [mall] to get built.”

Nevertheless, Curry—while declining comment on specific tenants he is wooing—said the project remains a priority for his company.

“We’re the owner. We’re more motivated than anyone,” he said. “We have a vested interest and a lot of capital in the land and want to see it restarted as soon as possible.”

A push for answers

Curry’s comments were some of the most extensive public statements by Howard Hughes Corp. on the Promenade since taking over the half-finished project from previous owner General Growth Properties, which declared bankruptcy in 2009. They come as Elk Grove City Council members, facing an upcoming election with the mall’s abandoned shell blemishing the intersection of Grant Line Road and Highway 99, have started pushing more aggressively for answers.

In March, the council agreed to ask Howard Hughes Corp. to update the community on their progress at a June council meeting.

“The company needs to move on [the mall],” Councilmember Gary Davis said at the time. “It has a lot of potential and we need to push a little bit and see what we can do to get it done.

In response, Curry and Howard Hughes Corp. president Grant Herlitt visited Elk Grove earlier this month and held individual meetings with council members and city staff.

Davis said his conversation with Herlitt left him “mildly optimistic” that the company is focused on Elk Grove. “They said they’ve been spending time and money getting the site ready to go,” he said. “I do believe they want to get the mall built.”

This week, Howard Hughes Corp. representatives and Elk Grove Economic Development Director Randy Starbuck are camped out at the International Council of Shopping Centers convention in Las Vegas, trying to convince retailers that Elk Grove’s location and relatively high median income make it a good investment.

“It’s my own little version of an Occupy movement,” Starbuck said recently.

Developer: buildings could still be used

City council members also decided at their May 9 meeting to pursue an amendment to the mall development agreement that will allow construction to move forward for other non-retail businesses on the surrounding land. The current agreement says that can’t happen until the foundation for at least one of the mall’s anchor stores is complete.

How fast could construction on the mall proceed? With the site lying abandoned for several years, some have raised questions about whether the existing structures are still sound. Curry said he believes they are.

“The reason we haven’t torn the buildings down is we expect to use them,” he said. “We want to use as much of the existing improvements on the site as possible.”

As for whether Howard Hughes Corp. will take council members up on their invitation to directly address the Elk Grove community, Curry said no.

“One of the reasons we came up to meet with council members and staff was to negate the need for that,” he said. “We’re certainly not coming up to the [council] meeting.”