La Plaza Mall in McAllen and the Rio Grande Valley Premium Outlets in Mercedes, two of the largest shopping destinations in South Texas, shut their doors Tuesday, cutting off a much-needed revenue stream for their respective cities.
Simon Property Group, which owns nearly 200 shopping centers in the United States, announced Wednesday it was temporarily closing all of its domestic properties to curb the spread of the novel coronavirus until March 29.
David Simon, the CEO, president and chairman of the group, said in a news release Wednesday the decision was made after “extensive discussions with federal, state and local officials.”
“The health and safety of our shoppers, retailers and employees is of paramount importance,” Simon said, “and we are taking this step to help reduce the spread of COVID-19 in our communities.”
McAllen Mayor Jim Darling said the city issued an emergency order earlier this week that excluded the mall, which he described as a central location that is not too crammed.
“I don’t think we anticipated the mall closing necessarily, but we’ll make adjustments for that,” he said Wednesday. “Health is more important.”
Those adjustments include no new city hires and no replacement hires unless it’s absolutely necessary.
“We have to run a city and we depend on sales taxes — it’s our biggest source of revenue,” he said.
Daling estimated 35 percent of that revenue is driven by Mexican shoppers, who flock to McAllen and other neighboring cities during Semana Santa and Black Friday. Both are the two biggest shopping holidays for the city, he said.
And with Semana Santa just round the corner, both McAllen and Mercedes stand to lose a big chunk of change if the shopping centers don’t reopen by the first week of April.
“Only time will tell, and hopefully we’ll have an update toward the end of the month,” said Melissa Ramriez, executive director for the Mercedes Economic Development Corporation).
In Mercedes, the outlets are a crucial source of revenue.
“The outlet mall contributes anywhere from 65 to 70 percent of sales tax revenue,” Ramirez said. “But we’re not really focused on that right now. It’s more about safety, and we dont want people to get sick — and that’s what Simon’s focus is.”
Both Ramirez and Darling urged the public to heed warnings and avoid large groups.
“This should be a wakeup call, stay home if you don’t have to go out,” Darling said.
It’s unclear whether the shutdown will affect construction of a proposed movie theatre at La Plaza Mall.
Last year, CUT! by Cinemark announced it was building a new, eight-screen movie theater, complete with a kitchen, lounge and a full bar at the McAllen mall. It’s slated to be the second of its kind in Texas.
Construction is scheduled to begin next month, with plans to open the theater by next year.