Much has been made lately over the intent to build a new shopping district in Longmont. Its proponent wants one and all to believe this will be a new “mall,” and that the reincarnation of the mall property will generate a retail renaissance in northeastern Boulder County.
One has to wonder about property developers. I worked with them long enough to learn that “earning” a development fee comes first; supply and demand come later. In this case the property developer has even convinced or coerced the city of Longmont to become its financial partner, and that after the former basically “stole” the pre-existing, nearly shuttered improvements. One does not have to be a trained real estate analyst to see that the lead tenant in Longmont retail centers is “available.” Not so obvious is the underlying potential for demand for retail business.
Add to the large empty spaces once occupied by Kmart, Sears (part of the old mall) and the original Walmart on a tract adjoining the mall, and a number of vacations by restaurants that chose to flee rather than fight unrealistic rent increases. Consider that when the economy seemed stronger (1990s), there were about 49 square feet of retail space in the country for every person. Now, with incomes and employment down, development activity has largely caved. Largely.
Allowing for a reasonable average of no less than $125 annual sales per square foot, Longmont’s 6.4 million (or so) square feet of retail space, owned or leased, need at least $800 million of disposable income. Assuming that the population is still 87,000, that means each man, woman and child must have more than $9,200 of income after taxes and rent (or mortgage), to support the existing retail base of 73 square feet per person. How many households do you know in Longmont pulling down that kind of dough (gross income would generally be two to three times the “disposable” sum)? Adding to the challenges, more than half of Longmont’s work force leaves town each morning. Many people shop near work as well as, or instead of, near home.
To be fair, the city hasn’t done everything wrong here. Its public tiff with Dillard’s came about in large part because a previous mall owner was desperate to keep Dillard’s when other anchors were moving out. By the way, Dillard’s right to veto improvement or redevelopment is worth something on its own; Dillard’s owns more than just a store. Perhaps Dillard’s wants no competition, or maybe the developer doesn’t want Dillard’s to stay. We may never know. What seems important is that a city so hungry for sales tax continues to ignore what might be its biggest asset: its historic downtown. Look around the country and see what I mean. The possible ambiance and amenities there can’t really be matched by a sterile, stainless-steel series of coffins parachuted onto a parking lot the size of some counties.
Longmont could take a page from London, where a 50-acre development will be designed as a “brand pavilion,” aimed at allowing global labels to set up interactive exhibitions linked to the growing online buying trend. To its credit London intends to include more than 1,500 homes within its new attraction.
The effective economic lifetime of Twin Peaks Mall was less than 20 years. In 2034 the tax incremental financing to be imposed for the new “mall” will not yet be retired. If malls per se are becoming extinct, wrecking ball operators in Longmont may want to keep their machinery well oiled.