The closing date for a proposed outlet mall in Robstown has been pushed back to early 2010, the fifth such extension granted to the project's San Antonio-based developer, due to a struggling national economy.
Nueces County Commissioners unanimously approved extending the feasibility period for the 350,000-square-foot outlet mall, The Outlets at Corpus Christi Bay, to November 15, 2009. That means the closing date for the purchase agreement, which must be done within 60 days after the feasibility study's completion, is now tentatively scheduled for early January 2010.
Rick Carduner, president of Dolphin Venture I LLC, said Monday the extension was sought due to a sluggish financial market in which banks are hesitant to lend money and tenants are wary of making a financial commitment to a new endeavor.
"No one is lending money on commercial real estate projects right now," Carduner said. "Leasing activity in the retail industry is sharply down amid the uncertainty of the economy."
The developer needs at least 75 percent of the gross leaseable area of the project to sign letters of intent before the purchase agreement can be finalized as one of the required approvals.
The proposed outlet mall is scheduled to be built on 50 acres of county-owned land adjacent to the Richard M. Borchard Regional Fairgrounds. Even though Dolphin Ventures has paid nearly $80,000 to the county thus far for the project, the land is still legally owned by the county until the purchase agreement is signed, county leaders have previously said.
The extension last week comes nearly five months after the county signed a development agreement with Dolphin Ventures for the project. The agreement outlined the look of the facility, such as the addition of covered walkways, as well as what types of businesses may operate at the outlet mall. For example, no businesses that allow for the consumption of alcohol on the premises will be permitted, according to the development agreement.
Carduner said Dolphin Ventures is still committed to following through with the project, even joining forces with a new partner, Georgia-based Cousins Properties Inc.
"We got the extension so we could ride out the wave - when that happens, the project will be one of the few ready to go," Carduner said, adding that the proposed outlet mall would be one of five such projects currently scheduled to be constructed nationally. Originally, that number had been at about 75, he said.
"The credit lines are being tightened all across the country," Carduner said. "With all that, all of the retailers are on pause.
"The economy is in the tank and the retail industry is getting hard hit."
Shortly after signing the development agreement in June, Carduner had said the outlet mall industry could benefit from a slow economy.
"The outlet industry, because of the economy, is actually doing quite well," Carduner said.
The answer came in response to concerns that the outlet mall would suffer the same fate as the delayed Crosstown Commons in Corpus Christi, an outdoor mall that was delayed earlier this year due to a struggling U.S. economy.
A portion of the development agreement states that "development shall nevertheless occur as market forces dictate, and the timeline is subject to revision by the developer on such basis."
Dolphin Ventures has already proposed to spend more than $2.5 million for about 50 acres to house its proposed outlet mall, which will have 60 to 80 retail stores. It will be the first of a two-phase project, developers said, and will cost about $60 million.
The second phase will see the addition of about 300,000 square feet on another 23 acres of land next to the existing outlet mall property, which was purchased by the developer privately without the county's involvement.
After the first phase of construction is completed, the outlet mall is expected to generate about $2 million annually in sales tax revenue for the City of Robstown, which has already experienced record sales tax growth over the past four months. That number could grow to about $3.5 million after the completion of the second phase of the project.
In addition, developers said the first phase of the project will result in about 160 full-time positions and more than 500 part-time positions.
Developers said they expect a total of 295 full-time jobs and more than 900 part-time jobs after the second phase is completed. It is also expected to generate a projected 4 to 5 million shopping visits a year.
Carduner said though it may take a little while longer to bring the project to fruition, it will get done.
"We're absolutely going to build the Outlets at Corpus Christi Bay," he said.