DALLAS MALL FIXERS GET CALL TO SAVE SOUTHWEST CENTER MALL AND REDO OLD RED BIRD
Big changes may finally be coming to Southwest Center Mall.
The new owner of the property, Peter Brodsky, has hired Dallas-based commercial real estate developers Frank Mihalopoulos and Terrence Maiden to help him fix the 40-year-old Dallas shopping center.
Southwest Center Mall, located at the intersection of U.S. Highway 67 and Interstate 20, is the only mall in the southern half of Dallas, but it’s been on a decline since the early 1990s and multiple past owners gave up on the property.
Large chunks of the 1970s-style mall are empty. Its tenants are a collection of mostly locally owned businesses with a few national chains and departments stores that haven’t been updated in decades.
Mihalopoulos and Maiden will help Brodsky come up with a plan for the site and oversee its redevelopment. It’s not going to be an easy project, and it’s going to take time, Brodsky said. But from talking to area residents, he has a vision of what they want.
“We don’t have all the exact ideas yet, but we know it will be walkable and there will be green spaces instead of a big open concrete parking lot. There will be places that people want to be in and there’s a big residential opportunity. It will be a quality development that people who live in this community will be glad to call their own,” Brodsky said.
The neighborhood has a lot of pride and is supportive of a redevelopment, said Maiden. Many still call it Red Bird Mall, as it was known in its heyday.
'Diamond in the rough'
Maiden grew up in Oak Cliff and went to Carter High School and has worked with Mihalopoulos on other southern Dallas projects, including the Glen Oaks Crossing shopping center on Interstate 35 and Ledbetter that is anchored by Wal-Mart and opened in 2014. Mihalopoulos, founder of Corinth Properties, has had success fixing malls in other states.
“Corinth has been investing in the southern Dallas community for years with great success,” Mihalopoulos said. “This property is a diamond in the rough, with all of the characteristics needed to be turned into a first-class asset for this city.”
Brodsky acquired the mall in September 2015 with the intention of redeveloping of the mall and its surrounding properties. The timing is right, Brodsky said. He not only owns more of the mall than multiple prior owners ever did, but he also has the cooperation of the three stores he doesn’t own: Macy’s, Sears and Burlington Coat Factory.
Brodsky, a private equity investor, said he has no prior retail or shopping center experience. But he has become familiar with southern half of Dallas over the past five years through his work on the board of Dallas-Fort Worth KIPP, a network of charter schools.
Since he bought the mall, Brodsky has had to dispel many myths about it. First of all, the mall is profitable, he said. It’s 70 percent leased with 100 businesses. He also points to reduced crime around the mall with better security.
“People hear about my investment and automatically believe it’s philanthropic,” he said. “I have to tell them no, this is a for-profit investment.”
Market opportunity
Last year, Brodsky bought most of the mall at auction, reportedly for $13 million. But Brodsky would not disclose the sale price. Dallas’ Office of Economic Development agreed to kick in $2.4 million to buy big empty chunks of the mall including a Dillard’s that’s been vacant since 2007 and an vacant area were a J.C. Penney once stood. Brodsky has to spend at least $15 million by 2019 making the mall a better place. Otherwise he has to return the money to the city.
It’s going to take many multiples of that $15 million investment already required by the city, Brodsky said. He’s going to take on outside investors and some debt.
“I believe there’s a very attractive return to be made. It’s easier to decide to open a store in Frisco versus Red Bird,” Brodsky said. “That doesn’t mean it’s a better opportunity.”
“This is a true market opportunity. It’s an underestimated and underserved market. It’s not a saturated part of the city,” Brodsky said. “It’s an enormous parcel of land between two major highways in a top 10 city, and no one was interested in it.”
People are thinking differently about several areas of Dallas, like Southside on Lamar, Bishop Arts, Trinity Groves and Sylvan Thirty, he said. All of a sudden, they’re places that are viewed as attractive by people who live on the north side of Dallas.
But no one should be confused that he’s trying to make a project for the purpose of attracting residents of North Dallas, he said.
While he wants the new development to have many of the same amenities found north of downtown Dallas, including multi-family residences for millennials and empty-nesters who want to stay in their neighborhood, the intent is not to attract those same North Dallas residents.
“This is for the community, not for people from outside to come and spend their money,” Brodsky said.
That would be welcome news to two fathers who were at Southwest Center on Thursday afternoon.
Dkwon Patton, 37, and friend Eric Powell, 34, both of Dallas, said they would love to bring their children to the mall, but there’s nothing there for them.
“Look at this giant parking lot,” Patton said. “Wouldn’t it be nice if there was some area where they could play?”
More places to eat, including an all-you-can-eat buffet, would be nice too, said Powell.
Or an ice skating rink like at the Galleria, Patton said. “My kids want to learn to ice skate.”
While the mall doesn’t have those things, the men still shop there because, as Powell said, “it’s the hood.”
Ready customers
Brodsky says he believes there is a large market of shoppers in Oak Cliff and the southern suburbs who would patronize the mall if it offered more.
Major mega churches within a few miles of the mall attract more than 100,000 people every Sunday, he said.
“These are big pockets of middle-class families. And what does everyone want to do after church? They want to go to lunch, and there aren’t enough places.”
The Pappadeaux Seafood Kitchen nearby in Duncanville is said to have one of the highest volumes in the state, he said. The lack of restaurants in the area is something he’s heard loud and clear. Brodsky has been meeting with groups whenever he’s invited, and he said he wants to be as transparent about the project as he can be.
Maiden says the developers know perceptions of the property have to change.
“Once that first new tenant makes a commitment, “we believe there will be a domino effect,” Maiden said. “We need that first key stakeholder who will make an investment and believe in the community and that our strategy isn’t outrageous.”