St. Louis Outlet Mall Sells for 98% Off

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STL Outlet Mall

This is one case where even a ridiculous headline can’t possibly describe the ridiculousness of the situation. The St. Louis Outlet Mall, nee St. Louis Mills Mall, has sold for $4.4M. The mall was completed in 2003 at a cost of $250M. It sits next to Missouri Route 370, a freeway connecting St. Louis County and St. Charles County across the Missouri River. MO-370 was completed in 1996 at a cost of $250M.

The construction of 370 and the Discovery Bridge has been called “one of the more successful infrastructure projects ever undertaken in St. Charles County” (for St. Charles County). The St. Louis region’s newspaper of record concluded “The Highway 370 corridor has served every purpose for which it was created and then some.” In addition to the benefit of just more driving, the construction of the St. Louis Mills Mall, on 370 just north of I-70, has been cited as the highway project’s single largest economic development benefit.

When 370 was envisioned, traffic on I-70 had reached 100,000 vehicles a day. St. Charles County, the west of the Missouri River, was hungry for economic development. Once the political process got the “economic development” bit between its teeth, 370 became a rather simple engineering problem. The highway was expected to take 40,000 cars a day off parallel I-70 and the Blanchette Bridge over the Missouri River. By 2013, the most recent year for which traffic counts are available, 370 carried 55,000 vehicles each day. That same year, 155,000 vehicles a day traveled I-70 in the area. The count in 2000 was 178,000 on I-70 and 51,000 on 370.

Did 370 “take 40,000 cars a day” off I-70. No way. Such measurements ignore induced demand, which is very clearly what happened in St. Charles County. Assuming I-70 traffic would have hit 200,000 if not for 370 is silly. What additional access has done is allow for abandonment and sprawl. If you can make a 30min commute 20min, people will chose to live 10min further away.

Then there’s the Page Avenue extension, a project similar to 370, but south of I-70. In 2013, it carried 61,000 vehicles a day across the Missouri River. The three crossings now carry 271,000 cars a day across the Missouri River. This has been an economic development boom, in St. Charles County. St. Louis County, on the other hand, lost residential population for the first time in its history this past decade, and has failed to increase jobs or retail development.

The City of St. Louis, St. Louis County, and St. Charles County cumulatively gained 1% in total population since 1970. Missouri has simply subsidized the movement of people away from existing investments, leaving behind economic liabilities while creating new unsustainable liabilities at the same time. That state prioritizing sprawl with its limited budget and finite federal money is an economic development failure, a pyramid scheme for which the bill is coming due.

But back to the mall. The dead mall is almost a cliche these days (The Life and Death of Great St. Louis Malls). Since the Outlet Mall opened, both existing malls within nearest proximity have closed. The 142-acre Jamestown Mall opened in 1973, closing in 2014. Last year St. Louis County purchased the vacant 126,000 sf JCPenney store at the mall, along with 600 parking spaces on 8.6 acres in order to have a say in its future development. There are currently no development plans.

 

Nearer the Outlet Mall, 122-acre, 1.8M sf Northwest Plaza closed in 2010, eventually selling for $5M. It was the 27th largest mall in the United States when it closed. A $106M redevelopment of that site is well underway, subsidized with more than $40M in tax credits and Tax Increment Financing (TIF). Northland and River Roads malls both closed in North St. Louis County as residents and jobs moved west.

So 370 (and the Page Avenue Extension) probably have “served every purpose for which it was created and then some.” That purpose was to enrich some and impoverish others using state and federal taxpayer money. It’s past time to reconsider why and where we continue to build.

Cumulative Population Growth 1950-2010

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  • cactneir

    Blame the 2015 protesters for the outlet mall closing. I lost a cheap shoe store

    • Adam

      no and good.

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  • A.J.

    It’s a shame because it was one of the few true outlet malls around. I could always go in there and find something for a really good deal. All of the stores moved to the Valley and jacked their prices up. I don’t know how the malls in the Valley are allowed to legally call themselves outlet malls.

  • brian cole

    is this property in a flood plain ?

  • lisa
  • illusion87

    Just makes you wonder, why in the heck is Maryland Heights even considering that Kroenke project? Is there really a need for more outlet malls in the area built by taxpayer subsidies when the current ones are dying? Our leaders in this area have failed us for 50 straight years.

    • jhoff1257

      That would be Maryland Heights not Hazelwood. And as far as I know that project is more of a mixed use development then a single mall. Either way I agree with your sentiment. That project should NEVER happen.

      • illusion87

        Yes sorry meant Maryland Heights.

    • A.J.

      I don’t know anything about the project, but Maryland Heights has like no true retail to speak of. Everything is in Chesterfield or Bridgeton.

    • kjohnson04

      After the Rams fiasco, Anything that has Kroenke’s name on it should be dead on arrival, just for principal.

    • 1 Fed Up American

      The Politicians in MH are just IDIOT’S.

  • matimal

    I a world of Amazon, ebay, and the like, how long can outlets survive? They’re dinosaurs.

    • Alex Ihnen

      It’s true, but also only to some percentage of decline. I mean, perhaps we “need” 75% of all current occupied retail? Maybe 50%? Whatever the number, a lot of retail will survive and is needed. That said, retail vacancy is high, and we continue to subsidize millions of more square feet every year. There will be more losers than winners in the near future.

      • matimal

        Where will the losers be?

        • Brian

          Just a guess, but the losers will probably be the winners of 20 years ago. The Galleria or other near county developments?

          • matimal

            Who’ll be hurt most by the move to online shopping? I haven’t been to a department store in years and buy all my clothes online.

          • Tim E

            Believe brick and mortar chain retail is already losing and downsizing square footage and locations while at the same time investing heavily into online with mixed results like everything in business. I think the big winners are the huge distribution facility developments. For St Louis region it has mostly been Gateway Center with several other developments hoping to compete but haven’t on the scale going on with Gateway.
            .
            The retail that doesn’t complete online in my opinion is the local food and beverage establishments who can put together a quality product as well the grocers who find a way to offer a mix of quality take home food.

      • Maddow3000

        How is it that St. Louis keeps losing people and every year the city and county seem to be the best they have ever been in my life time. There’s more population density in the central core, more mass transit, there are actually trolley rains in the actual ground after an entire lifetime of me seeing that trolley car in the loop. the grove, grand center, cherokee, lafayette square and downtown town itself basically did not exist as real destinations, when I was growing up. Now following the Metrolink line from the Maplewood stop to the Eads Bridge you have a bustling vibrant, legitimately urban area of critical mass. You could have an entire fully urban, even car less, life in St. Louis within that area.

        • thomas h benton

          Good point, but St. Louis is not a monolith. The central corridor is doing well in many ways, but other areas – north city, north county – continue to decline.

          • Maddow3000

            Well I wouldn’t really say North County has declined. Even if you look at Ferguson, which was sallegedly made into a poster child for the decline of North County and racial tensions. Ferguson has a much nicer down town today that it did in the 90’s. Ferguson has it’s own micro brewery. And if you look at where the police were having their staging area during the protests, that Northland Shopping center was completely redeveloped. Now granted it’s still a strip mall, ect, ect. but every major retailer in that shopping center had closed. Emerson is across the street. Express Script is the largest company in St. Louis it’s down the street from downtown ferguson. UMSL continues to expand. So I’m not sure decline is what I call what has happened there. The people who were afraid of black, which was the reason they move way out into the county in the first place, have now moved to St. Charles I guess…… I’m not sure that’s really a bad thing either.

            Is north St. Louis any worse today than it was 15 or 20 years ago? Not that I can tell. Some part of the city are demonstrably better, I don’t really see any parts that are demonstrably worse. So that’s what I mean when I say the city is better than it ever has been. That doesn’t mean all parts have improved. Chesterfield and outer Florissant were already horrible in the 90’s a reallocation of outlets malls from one to the other is really not significant. North St. Louis was horrible for related but completely opposite reasons but it’s fairly difficult to degrade an empty lot or a vacant building. Obviously there has been some rehabbing/redevelopment. I am black and the only people I know who live in north st. louis are white and live in old north…..so there’s that…..

    • Maddow3000

      Well most of that winnowing already happened, Amazon and ebay are 20 years old. When they went online NorthWest Plaza was still a thriving mall, St. Louis Mills basically replaced it. There were many many more malls in general. Crestwood, Jamestown, ect. ect. The Galleria and West County try to focus on having unique stores, obviously they are managed by rival developers so what one has the other will try to counter. But there is probably enough demand for same day items in the central corridor to support both of them.

      From my limited experience outlet stores are often cheaper than Amazon for specific items, the problem is that those items are not searchable online you need to physically visit the stores. Some stores will not sell items over the phone either. Ebay is usually cheaper, but there is more risk regarding the vendor. I tried to go to the Nike outlet in Chesterfield once, I got lost and went to the other outlet mall in Chesterfield somehow. Then I shrugged, turned around gave up and vowed never to go back to Chesterfield and ordered the product on Ebay for the same price….. Of course all those Ebay Vendors have to get their inventory from somewhere…..

      Anyway long story short there is a market for impulse purchase stores, when people want to examine items in person or utilize the activity of shopping itself as entertainment. So West Elm, Crate and Barrel, Ikea, people want to see those type of items in person to judge size and color same with Dick’s, Soccer Master, JCrew, people want to test out items in person. Sports Authority, people have a rec baseball game in 30 minutes and need a glove…,NOW. The places that have struggled Best Buy, Circuit City, ect there used to be 20 computer super stores in town, now there’s just MicroCenter. There’s room for destination stores, and category killers, basically.

      • matimal

        The digital revolution is complete. We’ve crossed to the other side and things are now the way they’ll be for a generation. Got it.

        • Maddow3000

          oh no of course not. That would be like saying the Industrial Revolution is complete or was completed at some arbitrary time. Economics is a constant process of creative destruction as Joseph Schumpeter said. But the disruption/disintermediation of retail by the internet has largely occurred. B Dalton is dead, Borders is dead, Sam Goody is dead, Circuit City Computer City, Blockbuster, KB Toys, the list could go on and on. The companies that are alive today have survive the internet for 20 years so most of them have weathered the storm, already. Some still may not make it, Best Buy exists mainly as amazon’s show room. Most of the stuff in Sports Authority seems like crap to me that you could buy just as easily at Wal-Mart or K-Kmart or Target if immediacy were the issue. But do I think Nordstrom is going out of business? No.

          The people who won the last 20 years, let’s call it the Galleria to Ikea Corridor. including wal-mart, Target, Home Depot, Lows and Menards, Trader Joe’s, Whole Foods as well as many, Chipotles and Starbucks. They will probably be around.

          Where Ikea chose to put it’s store tells you a lot. When I lived in New York, you have to leave the state to get to an Ikea and later you had to at least cross a body of water.

          • STLEnginerd

            Several will still fail it’s hard to say who. Even the big boys feel pressured. The digital culture isn’t pervasive yet. Think how scared they are of the boomers retiring and this loosing purchasing power. The younger the generation the higher the percentage of online purchasing. I’d be willing to bet that several brand currently dominant in the market will go under in the next 20 years. Even if they survive they will probably look very different, with smaller footprints as the total in store volumes will continue to drop. Probably go to more of a showroom business model with mobile online ordering and same day delivery. That’s new tech today with but in the near future it may be commonplace.

          • Maddow3000

            Definitely. But there are still car companies and airlines and large industrials going out of business now. There will be a generational transition and the normal business cycle will continue. But the large scale rapid disintermediation has largely taken place.

          • Maddow3000

            Well Sport Authority just filed. There were one of the place where I was like, I’m not sure how their offering are superior to Wal-Mart. Either you’re willing to buy crappy sporting goods because you need them immediately or don’t care about quality, which case you go to wal-mart. If you have flexibility about time or demand a quality products sports authority is not for you. The only people that store seems to appeal to is people willing to over pay for low quality sporting goods, Best Buy…. I guess I curse them too….. but I’m not sure how they add any value, unless they start charging people to go into their stores.

          • matimal

            I don’t know why the next 20 years would be less disruptive to retail than the last 20 years.

  • SilverBullet01

    YES!! The subsidized relocation has to stop! There would be a big difference if St. Louis county were gaining 10-15% population per decade, but as we all know, that isn’t happening. Imagine what the county would look like if those tax dollars had been spent on actual beneficial investments instead of tax breaks for developers? This is also directly related to the overblown highway expansion/budget in Missouri as Alex pointed out. Just because something worked in the past doesn’t mean we should keep doing it forever, Jeff City.

    • matimal

      It is stopping, its just taking time for the message to reach exurban locations.

    • TIm E

      The damage has already been done in terms of infrastructure and River Crossings. As Alex illustrated, building 370 and then Page Ave extension on top of it was over the top and has not been an economic boom as a whole for the region. Only a shift west.
      .
      I wonder if their will ever be some St. Louis county official who will openly admit that Hwy 141 extension would have been a better deal then more Missouri River Crossings.

  • Zack Sargent

    Insult to injury. A good chunk of that land was virtually stolen from a family I know. The old and ailing patriarch wanted to keep his family’s old farm, but because this was a “crucial regional development,” it was taken through imminent domain. They were offered a pittance on the value of the land. Shorty after his death, the family tried to sue, but their pleadings never went anywhere. Moral of the story: Everyone would have been better off leaving these folks with their farm land!

    • rgbose

      But building the highway and mall created a lot of jobs!

      • Go trump

        Wow. You are a douche. It created lost jobs and lost taxpayer money stole land from a family. Who work d harder in life than any person that received a “created” job. Millions of dolla s thrown in the toilet. Must be a liberal to see any positive in that entire project

        • rgbose

          Sorry, my sarcasm wasn’t clearer. The “it’ll create (good) jobs” excuse has been used for too many negative returning infrastructure projects, subsidized, development, demolition, stadiums, etc. In the absence of real growth too many depend on transactions, realtors scaring people to move, demo one building build another, etc.

        • tony

          A swing and a miss.

        • Alex Ihnen

          And new coalition against subsidized greenfield development (especially retail) may be forming! Welcome.

        • TM B33

          This comment amazes me. Go Trump for more abuse of eminent domain https://www.washingtonpost.com/news/volokh-conspiracy/wp/2015/08/19/donald-trumps-abuse-of-eminent-domain/ I sure since he’s on the right it is acceptable to you. Bottomline, every politician on both sides of the aisle are on the take and will steal from the 99% to give to their overlords.

  • HawkSTL

    I couldn’t agree more with Alex. There was nothing around this Hazelwood site, which made it a “build it, and they will come” project. Compare this to Chesterfield valley, where there are tracts of subdivisions and commercial activity to the east, west, and south. That is why this project has never lived up to expectations. And, it was predictable.

  • rgbose

    Consider Gravois Bluffs in Fenton, which got incentives totaling $80 million. Its success helped empty out Crestwood Plaza, just six miles away. St. Louis Mills, built in Hazelwood with a $18.5 million TIF and a $34 million transportation development district, helped finish off St. Ann’s Northwest Plaza.

    http://www.stltoday.com/business/local/area-stunts-growth-by-feeding-on-itself/article_644ee8ee-d6da-57fc-9714-a7fb95619fa1.html

    • TM B33

      All TIF’s do is permit the government to pick the winners. There should never be a tax abatement or public money used to fund a private business venture. If their business plan is a winner and their business is viable, they do not need government assistance. In the US, when the rich and powerful use the government for money that is consider good. When the poor and powerless do, they are considered leaches. Why is that?

  • Daron

    Buy that land and put it and everything from there to the river under a conservation easement, and we’d have a fantastic amenity for the regional trail and parks network.

  • “Missouri has simply subsidized the movement of people away from existing investments, leaving behind economic liabilities while creating new unsustainable liabilities at the same time”

    So true.

    • TM B33

      They helped their buddies while eliminating the competition for them.

  • rgbose

    Don’t forget that with this shuffling the political power of St. Louis City and County has been eroded. They were 33% of MO in 1970, now 21%.

    • kjohnson04

      Our eroding political power has a lot to do with it. When you have hundreds of politicians in an area smaller than Chicago and New York, and work at cross purposes every single day, the results are clear.

      A merger is needed and required. We can continue to ignore the obvious and become irrelevant on national stage, or do the difficult thing and start rowing in the same direction.