DFW Mega-Mall Redevelopment Projects Remain On Schedule Despite Coronavirus Interference

Three major Dallas-Fort Worth mall redevelopment projects remain on track, with their timetables virtually unaffected by the massive coronavirus pandemic that has rocked construction sites in other parts of the U.S. 

With the exception of small hiccups in product supply chains and the slowing of some interactions with city personnel, the projects are on schedule for now, the developers say. 

Centurion American's Collin Creek Mall redevelopment project in Plano and its urban village redevelopment project at the old North Hills Mall site in North Richland Hills remain on schedule, according to the developer.

Meanwhile, the redevelopment of the old Valley View Mall into the Dallas Midtown project remains on schedule with construction crews still working on the site, Beck Ventures' Scott Beck told Bisnow. 

The real test for developers will come in the autumn when it's time to move toward vertical construction at Dallas Midtown or when it's time to engage hotels and retailers about future tenancies, the developers said. 

"When we get to September, October, November, which is when vertical constructions of buildings [at Dallas Midtown] would start, that is going to be the question," Beck said. 

"Right now, all of those projects are still on, and it's far enough out that all of the information coming from federal agencies is that the quarantine will be subsided if not completely over in the fourth quarter, so I think that will give us the opportunity to start going vertical in a somewhat depressed market, which means labor costs will be down and the cost of construction will be down." 

Beck said supply chain interruptions caused by the virus caused marginal disruptions at Dallas Midtown several weeks ago, but construction has remained on schedule for the most part. 

"Fortunately, for us, our portion of the project that we started four months ago was the infrastructure component," Beck said. "We are now in the middle portion of putting in all of the utilities." 

Groundbreakings on actual buildings are not expected to happen until closer to the fourth quarter, which buys the project time. 

In fact, construction costs could even out after the U.S. opens back up, allowing more flexibility on the financing side of the development. 

"For projects that are financed like ours, it could present an opportunity for building projects at a lower cost," Beck said. 

Still, Beck is confident that the Dallas Midtown project, which includes plans for construction of the Life Time Villages complete with residential units, 60K SF of retail, 50K SF of office and a 110K SF fitness facility, will remain on course to break ground on vertical construction this year. 

Beck also has plans for a hotel with 200 rooms, 40 condos and an AMC movie theater.

The redevelopment of Collin Creek Mall is also mostly staying on track, with Phase 1 demo activity already complete and Phase 2 demolition underway, Centurion American Vice President Sean Terry said.

The only slowdown the project has experienced is that a major drainage project on the site requires constant city approval and oversight, and that process has slowed down with city officials unable to confer in person. 

"Plano is not a 100% paperless environment," Terry said.

Plans for Collin Creek call for 300K SF of retail, 200K SF of entertainment and services, 40K SF of restaurants, a 200-room hotel and a 40K SF event space along with 1.3M SF of office.

Plano requires developers to visit with someone in the city office and walk them through sets of plans. 

"Now you drop the plans off, they don’t touch them for 24 hours, because the CDC says viruses can sit on those plans for 24 hours," he said. 

This has created some stalls, but Terry is confident Collin Creek Mall and the North Hills Mall redevelopment will stay on schedule.

The firm started demolition on the North Richland Hills project this month, which will eventually bring 60K SF of commercial development along with a hotel sitting on 2 acres and residential product. Utilities and infrastructure are expected to be complete and the North Hills Mall site ready for vertical construction by April 2021.

The selection and deal-making process with hotels and retailers at that project could be impacted, given those sectors' struggles during the pandemic. 

There is no timeline for when hotels will be selected or break ground, he said. 

"Those kinds of businesses we have to have really good communications ... and those conversations on that side of it are slower right now." 

While he thinks the end of lockdowns will bring restaurant and hotel business activity back to life, that side of the equation remains uncertain and schedules on that front could change. 

The Collin Creek Mall project also has a major outlier with JCPenney still operating on the site, and Centurion American plans to build the retailer a new pad for its future location. The firm has nine months to do that and hasn't had to adjust anything just yet, but progress on the on-site drainage project could create an issue down the road. 

"In the next 30 days we might have to adjust a little bit, but so far we have stayed on task with the demolition that we have set so forth," Terry said.

As for whether concerns of Penney's financial demise will curtail the project, Terry said that isn't a worry. 

"It really hasn't been that much of a discussion with us working with Penney's because we look at it as they are our partners."

Even if Penney's were to go through a restructuring at some point, Terry sees its role at Collin Creek as an anchor as helping build its future. 

"We hope we can be some small part of the rebuilding of JCPenney's on that free-standing site with a new store," he said.   

"We are hoping it can be a success story for them, and this new design of how a mall will work, hopefully that helps them get out of their situation and to stay successful moving forward.”

Will The Psychology of Retail and Mixed-Use Development Change?

Both development firms have had to contemplate whether the virus's spread will impact how shoppers and consumers view mixed-use urban centers and retail and restaurant hubs after having to avoid those places for safety concerns. 

Both Beck and Terry see shopping and eating as staples that consumers will quickly return to after the lockdowns end. 

"There's a certain percent of people who still want to touch the product they buy," Terry said. 

And Beck believes without government shutdowns, eager shoppers would be at retail and restaurant sites right now, although he does support efforts to curtail the risk while the virus remains a concern. 

"I think what you are going to find it is going to come back substantially faster than what is being reported. I think people will immediately go back to those environments," Beck said.