TEXAS CITY — Most interior space of Mall of the Mainland, which opened to high hopes in 1991, but struggled to attract staple stores and, ultimately, shoppers, will close early next year, owners said.

The closure won’t affect Sears, which owns its own store, Palais Royal or movie theater Cinemark. 

Leases with the interior stores, except for Palais Royal and Cinemark, will be terminated Jan. 31. 

Officials with Coastline Retail Center Inc., which last year gained control of the shopping center as a result of a foreclosure action and related litigation, said they would close the interior common areas of the mall, 10000 Emmett F. Lowry Expressway, to public access beginning Feb. 1.

They also said they were in contract negotiations with an unspecified investor interested in buying the property. 

Coastline officials made the announcement in a prepared statement and were unavailable Monday for follow-up questions.

Coastline, a company apparently formed by Pacific Western Bank, also said the closure was an effort to reduce the “current or a future owner’s holding costs,” which can include equipment, materials and labor to operate the space, along with insurance and other direct expenses.

“Details regarding the potential sale were confidential at the time of this release,” Coastline said in the statement. “No specific information regarding the sale or the mall’s future is available at this time.”

Closure of the 450,904-square-foot mall also could be the first step in a future owner’s redevelopment of the troubled property, which has been on the market for months, owners said.

While not surprising — the mall has been dying a slow death for years — the closure marks the end of a retail era for Texas City. The opening a year ago of the 90-store Tanger Outlet Center on 55 acres west of Interstate 45, south of Holland Road, has pulled the city’s center mass west across I-45 and is acting as a magnet for development that will bring retail and restaurants.

“We’ve all seen it coming,” Mayor Matt Doyle said. “It was inevitable.” 

One of mall’s weaknesses was that it wasn’t visible from I-45, Doyle said. Doyle also said he wasn’t impressed with the mall’s management over the years.

Although it’s the county’s only mall, it always has struggled to compete with the more bustling Baybrook Mall in Harris County and mass merchandisers such as Walmart.

The mall struggled because it never had attracted key smaller tenants such as Victoria’s Secret and The Gap, industry observers and former mall managers have said.

Major anchors including Macy’s, JC Penney and Dillard’s departed the mall over the years. About a dozen tenants including Bath & Body Works, Claire’ s and Foot Action remain. 

DeBartolo Realty Corp., which merged with Simon Property Group in 1996 to become Simon DeBartolo Group, developed the mall. DeBartolo opened the mall before fully leasing the property.

Alliance Retail Group, which became Triyar Cos., bought the mall in 2002. Before that, the mall had been in receivership. The mall’s ownership had been transferred in 1997 to Mainland Holding Co., a subsidiary of Chase Manhattan Bank. The transfer was in lieu of foreclosure on a $61 million note.

In March 2007, Michael and Mayer Makabeh, principals of Brentwood Group, led a Los Angeles investment group to purchase the mall from Triyar Cos., also based in Los Angeles. The Makabeh’s were unable to improve the mall’s plight. Three years later, Brentwood Group, which owned a 51 percent stake in the mall, filed for Chapter 11 bankruptcy protection in an apparent bid to ward off foreclosure. Brentwood and affiliated entities in January 2008 had taken out a $13.5 million loan from Pacific Western Bank, which took possession of the mall in September 2011, and hired Boxer Retail to devise plans to redevelopment the property with an entertainment focus.

Texas City officials earlier this year had been in talks to buy the mall. But sellers were asking too much, they said.

Pacific Western Bank was willing to sell it for $15.4 million a little more than a year ago. The seller has the property priced at $8.86 million, but is willing to sweeten the pot with a $1 million price reduction and a $100,000 broker incentive if the sale closes before Dec. 15, according to online listings.

Closure of the mall would allow redevelopment of nearly 80 acres with a lot of surrounding infrastructure, Doyle said. 

A better use for the property might be medical or even a distribution center, Doyle said. The buildings aren’t worth much, he said. But closure of the mall and a new owner of the property could mean opportunity for Texas City, Doyle said.

“In Texas City, we’re good at making opportunities and now we’ve got an opportunity to do something with that place,” Doyle said.

Contact reporter Laura Elder at 409-683-5248 or laura.elder@galvnews.com.

(6) comments

Linda Matthews

While I am sorry to see this happen to this property, one of the other problems the mall has had over the years is that it priced its square footage as if it was situated like Baybrook (right off the freeway).

Mark Johnson

It was destined to occur. With the mass of humanity that visits 6th street and takes all the customers from the mall there's no way the mall could survive. the 21 million invested in 6th strret is certianly paying off. I'm curious as to when the city will allocate another million or so to traffic control on 6th street to make getting around a little easier.

Frank Emmite

I agree

Frank Emmite

I haven't been to 6th St in years because it was dying back then. But I believe one of the big problems wit MOM was the wooden sign that stood on the corner of the feeder road and 2004 for about 10 years that announced the site of the mall. One loses enthusiasm after a while. By the time it opened I had lost interest in going. I loved Dillards and their sales, Macy's and their sales and several more that had good sales. I am glad Sears is staying, Business may be slow, but I have always loved Sears. Oh well no interest in saving the mall it seems

Albert S. Gonzales

On or off the freeway may be a problem but the bigger problem in my humble opinion was and still is "advertising" or "marketing" the mall. I believe all concerned with the mall were depending on the other guy to make it happen. The City, The Economic Development Board, The Chamber of Commerce, etc. were not diligent in continually aiding in growing the businesses in the Mall. Again I say, all roads lead to the Mall. It has always had easy access to it without driving pass it and turning around and going back. I for one do not like getting cold, wet or suffering the heat. Once in the Mall I could go from store to store without getting out in the weather. Newer is not always better, continuing to improve what you have is by far more the least costly. Has the new place on the freeway changed? We still shop at Sears and attend the movies. I for one will continue to drive to Baybrook and enjoy the comfort that the mall there has to offer, going from store to store in sheltered comfort. See you at Baybrook!

Andy Aycoth

Think should tear it down and give it back to nature.

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