Contrary to what locals call it, the word "mall" is not actually part of the formal title for that collection of retailers, restaurants, and entertainment venues named Katy Mills.

"In the general sense, we are a mall but in the world of Simon [Property Group], there are three platforms," said Don Massey, general manager of the property. "There are the Premium Outlets, The Mills, and the malls."

Katy Mills is on the middle platform. Houston Premium Outlets in Cypress is its strictly outlet sister, and The Galleria is among Simon's full-line malls, Massey said.

Katy Mills is both full-line and outlet; that is what separates it from Houston Premium Outlets, he said.

The industry distinctions may seem minor except that some real estate and retail analysts claim that many traditional shopping malls across the nation will either fail or convert to non-retail space over the next 10 to 20 years. Outlets have fared much better, according to the same analysts. Once iconic malls in other parts of the country have already fallen victim to online competition and the recession.

Over the last decade, architects and developers have opted to build multiuse, multilevel retail centers instead—like LaCenterra—to diversify tenants and sources of revenue. Those properties continue to grow. LaCenterra, for example, expects its third Trader Joe's-anchored phase to open in the fall and is pre-leasing on its fourth phase.

Simon and its Katy Mills property have not been immune to these market forces. The corporation announced earlier this summer a rebranding and marketing campaign including an investment of approximately $1 billion per year in redevelopment projects—including its Mills and outlet properties.

Those efforts will include the redevelopment of Katy Mills, according to Liz Zale, senior vice president for corporate affairs with Simon.

Specifically, the company has publicly expressed an interest in further expanding its luxury retailers and fine dining.

Zale said the company also plans to expand what retail experts call "omnichannel" marketing strategies. The idea is to combine the online and brick and mortar experience, she said.

The company wants shoppers to be able to buy and ship gifts from a store to somewhere else, buy online and pick up in the store, or have items delivered on the same day, Zale said.

Massey, said it was too early to discuss details about what might be in store for the Katy Mills property, but he said big things are on the horizon.

Indoor and outdoor

Shopping malls have been changing over the last decade, said Marc Boucher, principal at Boucher Design Group. The Bellaire-based company has worked on a variety of projects over the last 30 years in the Greater Houston area, including several in Katy—most notably LaCenterra.

In recent years, the firm has been hired to refit a number of malls. The designs for many of the interior environments of these malls date back to the 1960s and 1970s, Boucher said.

In many cases, refitting the mall means flipping the various stores and features of the mall from facing inward to facing outward.

"A lot of the rebranding that's taking place in the nation today is this kind of mall reversal," he said.

Both big box and smaller retailers want more exposure to the exterior of the mall property. Their affiliation with the identity of a mall and their typical signage are simply not good enough anymore, he said.

Store size is also changing. Many brick- and-mortar retailers—including big box stores—and other "junior anchors" are downsizing their footprints.

"The 30,000-square-foot boxes that we used to build are now down to 20,000 square feet," Boucher said.

Retailers can get more sales in a smaller store because customers can get in and out quickly, he said. With a lot of sales going online, stores do not need to have such an extensive inventory, he said.

Retail lifestyle

Architects and developers also understand that people often want to turn shopping into an experience. That includes places to eat and relax, Boucher said.

"Restaurant activity creates synergy and a lot more daytime population," he said. "When we did LaCenterra Phase I, we didn't have that many restaurants. The challenge for those tenants was the daytime population—getting people to hang out and stay there."

In recent lifestyle center projects, the firm has tried to plan 30-35 percent of the space for restaurants.

Woody Mann Jr., president of Vista Equities Group—the development and management company for LaCenterra—sums it up with a simple question: "Can you ever have too many restaurants?"

In the early 2000s, after Vista bought the land for LaCenterra from Newland Communities—then led by Ted Nelson—the area to the west of the Grand Parkway was largely undeveloped.

"There weren't a lot of retail choices or dining choices—no high-end restaurants," Mann said. "It was pretty easy to figure out that it was a pretty underserved market in retail, restaurant and office space."

When Vista put the land under contract, Mann had originally envisioned the site as a larger grocery-anchored neighborhood shopping center, of which there was none in the area, he said.

The more they looked at the demographics of the site, the more Nelson thought they should shift the design to include a town center consisting of higher-end national retailers, Mann said.

The average household income in a one-mile concentric ring around LaCenterra is more than $150,000 per year; within three miles it is $130,000 plus per year. The population is also skyrocketing, Mann said.

"If you believe the demographers, they'll tell you there will be another million people between Beltway 8 and Sealy in the next 20 years," Mann said.

While planning LaCenterra, they never envisioned an enclosed mall. Katy Mills was right down the road and catered to a much different type of shopper, he said.

"There are different philosophies about how you market your product," Mann said. "They market toward one income strata, and we market to another. There's room in the market for both."

Massey, too, said that LaCenterra and Katy Mills are not direct competitors.

"The smaller properties don't impact Katy Mills, which is the largest outlet and value retail destination in south Texas," Massey said. "It's the retail mix that makes it unique. It reaches Houston, Cy-Fair and other regional locations."

One place where Katy Mills and LaCenterra do overlap, however, is that both market themselves as "community centers."

"We are the hub of the Katy community and that is really what we are focused on—being a place for locals to come hang out and have a good time, do their shopping, enjoy some great food," Massey said.

Boucher said that he would not be surprised to see Katy Mills continue to become more densely developed and possibly even have a piece spin off as a lifestyle-type environment, similar to the ones in Sugar Land and The Woodlands.

"The challenge there is that LaCenterra is right in the heart of Katy, it becomes an ownership thing," Boucher said. "The people of Katy really embraced that as being their own town center."