Developer stays course in Willow Bend mall expansion following prominent departures, late payment

The Shops at Willow Bend is continuing with a $125 million expansion project that includes the mall's now-open restaurant district. (Daniel Houston/Community Impact Newspaper)
The Shops at Willow Bend is continuing with a $125 million expansion project that includes the mall's now-open restaurant district. (Daniel Houston/Community Impact Newspaper)

The Shops at Willow Bend is continuing with a $125 million expansion project that includes the mall's now-open restaurant district. (Daniel Houston/Community Impact Newspaper)

The owner behind a multimillion-dollar project to expand Plano’s only remaining indoor shopping mall is looking to extend and restructure its financing as it prepares for a new stage of office and residential construction.

In recent years, Starwood Retail Partners has poured $125 million into repurposing its Shops at Willow Bend property with a slew of new non-traditional tenants, from a children’s entertainment venue to a luxury fitness building and a new restaurant district. Mall spokesperson Amy Medford said the mall will continue to move forward with the unfinished portions of the plan, which include an office tower and possible residential concepts.

“Starwood has completed over $125 [million] in improvements over the last three years, including the new Equinox, Crayola, restaurant district and Cinepolis that will open this summer,” Medford said in a statement. “We’re delighted at the excitement and interest this investment has generated and are in advanced planning stages to add [complementary] uses to the center, including multifamily and office.”

As of a few weeks ago, the mall was two months late on its payment on the loan that financed the project, and the further departures of several mid-size tenants not tied to the renovation project have left behind empty spaces that remain unfilled.

The mall’s owner, Starwood Retail Partners, said in late January that the company is working to extend and restructure its loan.


The mall declined to comment further on the project or its financing.Plano resident and former Chamber of Commerce board President Craig Perry was the mall’s first general manager, holding the role from before the mall opened in 2001 until 2002. Perry said it can be difficult to draw conclusions about a project’s status from a late loan payment alone.

“It’s not uncommon for developers to be late on loans, and generally what it means is they’re just looking at refinancing,” Perry said. “I’m not too concerned about that at all.”

The new and the old

Like most major shopping centers, The Shops at Willow Bend has taken a hit in recent years as fewer shoppers are buying from traditional department stores and retailers.

However, there are some signs that the early parts of the redevelopment project have started to pay off.

The Shops at Willow Bend’s revenue dipped in 2017 during a year of intensive construction before rising again by 2.6% the following year when some of the new tenants opened, according to a loan report from commercial real estate analytics firm Trepp LLC.

The North Texas Performing Arts theater group opened a new facility at the mall in 2017 with space for its academy program, performances and offices. Last year, this facility alone brought more than 200,000 people through the doors of the mall, NTPA CEO Darrell Rodenbaugh said.

“We also make the space available for community and civic events,” Rodenbaugh said. “Our hope was that this would be a facility for the whole Plano community, and we could not be happier with how it has fulfilled that vision.”

The mall declined to provide an estimate of how much foot traffic these new tenants have brought into the mall.

The opening of the North Texas Performing Arts facility in late 2017 was followed by that of the 60,000-square-foot Crayola Experience children’s entertainment location, which opened in April 2018. The first eateries at the mall’s new restaurant district opened a few months later. The restaurants serve as a new front entrance to the mall, facing the Dallas North Tollway.

As one walks through these entrance doors, past the Mexican Bar Co. on the left and Knife Steakhouse on the right, some of the mall’s more prominent departures soon come into view.

The space formerly occupied by the Apple Store, which closed in April, still lies vacant. Apple announced the closure in tandem with the closure of a Frisco store at Stonebriar Centre.

Down the hall, darkened windows are all that remain of the former Forever 21 store. The 38,000-square-foot outlet closed Dec. 30 after the fashion retailer filed for bankruptcy.

The mall declined to comment on plans for the vacancies.

Twelve percent of the mall’s leases will expire within one year, according to the January loan report. More than half of the mall’s leases are set to be active for more than four years, the loan report says.

The mall’s longest-term leases are with its three main department stores: Macy’s, Dillard’s and Neiman Marcus. Each of these leases is set to expire in 2099, according to the loan report.

An industry disrupted

Large shopping centers have increasingly turned to nontraditional tenants in recent years to draw new foot traffic.

Malls in the Dallas-Fort Worth area saw occupancy rates climb from just under 89% at the end of 2018 to nearly 91% by the end of December, according to a report from Weitzman, a Texas-based real estate group. This rise was partly fueled by new anchor leases, none of which were traditional department stores, the report said.

Instead, the new anchors have looked more like the nontraditional offerings at Willow Bend, Weitzman spokesperson Ian Pierce said. Willow Bend’s addition of Equinox Fitness was just one of the transactions made last year in DFW-area malls to follow this trend. Others of the sort included the openings of Kidzania at Stonebriar Centre in Frisco, Conn’s and Fitness Connection at Denton’s Golden Triangle Mall and a newly announced UT Southwestern Medical Center at Redbird mall in Dallas.

“The disruption of the department store category means malls today fill vacancies with a new generation of anchors, like fitness, medical, grocery, entertainment and the like,” per the Weitzman report. “[Malls] welcome these concepts because they drive traffic during the week.”

Overall, most retail centers were relatively conservative in pursuing new construction in 2019, according to the Weitzman report.

“Conservative construction helps [malls] avoid the overbuilding that marked previous periods of strong retail market performance,” the report said.These reduced construction levels are not just a recent trend. Retail properties in the Dallas-Fort Worth area added half as much new space in the last decade as they did from 2000-09, when roughly 47 million square feet of retail space was built.

Perry, the former Willow Bend mall general manager, said he feels attached to the mall, having played a role in opening it and watching it become the last mall standing in Plano.

“It’ll always be my baby,” Perry said. “It’s interesting. When they went through the renovation, Starwood, I was a little upset because there was some great elements—classic craftsman style that I really, really enjoyed. And yet, if I take myself out of going through the opening, and if I went into it without that background, I think it looks beautiful.”

That said, Perry acknowledged the mall has had to evolve from what it was originally conceived to be. In the early days, Perry said, the mall was home to exclusive, high-end retailers that nearby residents appeared unable to consistently support.

As The Shops at Willow Bend continues to pivot to a more diverse tenant base, its path forward will involve a re-examination of the financing behind the project, Starwood Senior Vice President Dan Scorpio said.

“In the meantime, it is business as usual at the property as we continue to work hard executing our repositioning plans,” Scorpio said.
By Daniel Houston
Daniel Houston covers Plano city government, transportation, business and education for Community Impact Newspaper. A Fort Worth native and Baylor University graduate, Daniel reported previously for The Associated Press in Oklahoma City and The Dallas Morning News.


MOST RECENT

Pharmacist Emily Smith opens a cooler for a patient to place their self-swab coronavirus test at a Walmart drive-thru testing site in McKinney on June 29. (Shelby Tauber/The Texas Tribune)
Poll says Texans' hopes for quick return to pre-coronavirus life are fading

Texans remain focused on the coronavirus pandemic and are less optimistic about returning the state to normal quickly, according to polling by the Texas Politics Project at the University of Texas.

Texas Agriculture Commissioner Sid Miller recently backed a movement calling for the reopening of winery and distillery tasting rooms and brewery and brewpub taprooms. (Courtesy Adobe Stock)
Texas Agriculture Commissioner joins voices calling for reopening of tasting rooms, taprooms

In a letter to Texas Gov. Greg Abbott, Agriculture Commissioner Sid Miller said demand from distilleries and breweries provides an important revenue stream to the state's farmers.

The Weihenstephaner Pils, a hoppy pale lager, is one of the German beers Bavarian Grill serves straight from the tap. (Courtesy Bavarian Grill)
Owner of Plano's Bavarian Grill fights to keep 27-year business afloat

Bavarian Grill, a restaurant with a 27-year presence in the community that serves authentic German cuisine, was built around its in-person dining experience that fostered a group of loyal customers.

The city of Plano is expected to enforce Gov. Greg Abbott's order requiring residents to wear masks at most businesses and public spaces. (Courtesy Adobe Stock)
City of Plano to enforce governor's order requiring masks in public spaces—including warnings, fines

The mandate requires Texans to wear face coverings in businesses and public spaces—indoor or outdoor—where maintaining six feet of distance from other people is not feasible.

The First Street Foundation's dataset includes a forecast models that anticipate the effects of climate change and sea level rise. (Screenshot via First Street Foundation)
Analysis: FEMA may be undercounting national total flood risk by as much as 70%

The new dataset includes an interactive Flood Factor dashboard that anyone can use to assess the risk of flooding over a 30-year period for any address.

weights at gym
Hardcore Fitness Boot Camp to open Plano location in August

Hardcore Fitness Boot Camp offers weights and personal training with an emphasis in CrossFit, boxing and cardio workouts.

Gov. Greg Abbott
Gov. Greg Abbott: Texans must wear masks in public starting July 3

"COVID-19 is not going away," Gov. Abbott said. "In fact, it is getting worse."

When interest rates are low, homeowners may look to save money by refinancing, which means getting a new mortgage with a better term or interest rate to lower payments. (Source: Matt Frankel/Community Impact Newspaper)
'Refinancing isn't free:' How to navigate refinancing a mortgage

When interest rates are low, homeowners may look to save money by refinancing, which means getting a new mortgage with a better term or interest rate to lower payments.

Menu offering
Vitality Bowls opens new location in Plano

Health conscious eaters in Plano have a new dining option along Dallas Parkway. Nurticious bowls, soups, salads, smoothies and juices are all on the menu at Vitality Bowls.

Episcopal Health Foundation
Survey: Texans support emphasis on improving economy, safety, pollution to address overall health

“COVID-19 is clearly showing what Texans already know: the state needs to address underlying, non-medical conditions that have a dramatic impact on their health,” Episcopal Health Foundation President and CEO Elena Marks said.

In communities across the nation, Walmart Supercenter parking lots will be transformed into contact-free, drive-in movie theaters beginning in August. (Courtesy Walmart)
Walmart to bring drive-in movies to 160 stores nationwide in August, launch virtual summer camp

Families can also enjoy a virtual summer camp experience Walmart is launching July 8 with sessions led by celebrities, including Drew Barrymore, Neil Patrick Harris and LeBron James.

CoServ executives accepting award
CoServ annual meeting to be virtual this year

CoServ has announced its virtual meeting plans to replace a physical meeting that has drawn up to 3,000 customers in the past.