College Station City Council members approved a $7.3 million contract Thursday to purchase the former Macy’s department store property at Post Oak Mall to activate and repurpose the property to be a catalyst for redevelopment, according to Natalie Ruiz, the city’s director of economic development.
“In 2019, we launched a 10-year valuation of our Comprehensive Plan to look at the physical development of the city that was known as the Next 10. As part of that process, we engaged citizens to really delve into the plan and take a look at that future,” Ruiz said at the Aug. 25 council meeting.
“They identified six areas as part of that plan that [were] important to do some additional studying … to potentially redevelop those areas … two of those areas are on Harvey Road at Highway 6, the Post Oak Mall, and the multi-family residential [area across the street].”
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The former Macy’s building is two stories, 103,000 square-feet and on 7.64 acres; and the city has a 30-day due diligence feasibility until Sept. 30 to enclose the deal, Ruiz said.
“Since the adoption of Next 10, staff has continued to work with [CBL & Associates Properties]; they are the current managers and owners of the biggest portion of the mall. We have worked with them on trying to develop a bigger vision,” she said.
“There is no one specific use that we have identified for that property … but the intent is to repurpose and activate this property to be a catalyst for redevelopment in that area.”
Council member Linda Harvell said the council had been talking about this purchase for a while during executive session, and she received multiple questions and concerns from citizens expressing their issues with it.
“I had a call this afternoon and then I visited with a couple of gentlemen out in the lobby earlier, and I don’t want to use the word ‘concern’ but it has been a surprise. They are saying ‘why are we just now finding out about it?’” she said.
“I didn’t know how to respond which really annoyed them. … I know there were other people looking at it and I wasn’t involved in that, but I think it is a great opportunity for the city of College Station.”
City Manager Bryan Woods said in response that this is a step in a larger process and the city is taking on a role of economic development versus raw land, and sees the area as “an extremely valuable piece of the community.”
“We will be working with partners and working with the public to figure out how we get it to where the community wants it to be and this is the first step in that process,” he said. “Our goal as a government is not to be a developer, but to be a catalyst for development … and some of the proposed uses that were going to go on there, potentially would have caused greater harm to the current tenants and the future use of that area.”
During the meeting, two residents spoke in opposition of the purchase, including Melissa Mcllhaney of College Station.
“I would imagine that this current owner would jump at the chance at selling it for $7.3 million. According to the Brazos County’s clerk’s office this was purchased by them for $3.5 million in January of this year that means they are getting more than double on their return on their investment in eight months,” she said.
“I question the wisdom of spending that amount of money, not having any set plan to move forward with it, and paying an ultra-premium of $1 million an acre.”
Mike Logan, owner of Grand Station Entertainment of College Station, also spoke and said last year he had the opportunity to purchase the property.
“We were one of the three people trying to purchase that Macy’s building, the gentleman who bought it, came to us and said he wanted a partner, so he wanted us to go in with him, and I asked him what he paid and he said $3.5 [million] and I said I am not interested in being a partner with you right now,” he said.
“And then [Thursday] we get this phone call and we are like oh my God, you guys are going to pay $7.3 million for property that was sold … in less than a year … Where does that money come from? … I wanted to let you guys know we are not real happy about that, the tax dollars. … I paid $89,000 in property taxes last year, and if this thing goes for [$7.3 million] and if my math is correct, we are looking at $190,000 in taxes is what $7.3 [million] would bring.”
After the meeting, Ruiz said the current owner of the property, a group out of California, purchased it from Macy’s when it was liquidating assets, Ruiz said.
“They purchased it for $3.5 million and they put it back on the market; and they had entertained other uses like a big box retail [center], family entertainment, very large discount retailers and a self-storage at that location,” she said after the meeting.
“They also considered some additional pad sites in that parking lot that would carve it up even more.”
Woods said the building was purchased and the people who purchased it ended up not going through with the development.
“The city entered and it is a different market. I understand the situation and when you look at the cost differential between one place and the other, but we weren’t the only people involved and again we had the appraisal done,” he said at the meeting.
“Originally our goal was to work with them, but it fell through and that is part of the reason we were moving forward this way is to be sure the redevelopment at that site goes the direction we have laid out in the [Comprehensive] Plan.”
Mayor Karl Mooney said after the meeting that the city would have loved to see Post Oak Mall remain the vibrant shopping center that it once was, but “unfortunately times have changed.”
“You go down Highway 6 and you see what appears to be a vacant shopping center in College Station, that doesn’t speak well for the city,” he said.
Mooney said the city now has a 30-day period of time during which it will take a much closer look at all of the conditions, and see if it is still in agreement with the sellers in order to close on the building. Then the city will work on trying to get a proper tenant in there or do something that will benefit the city or the university, he said.
“We are trying to control what goes into that building and that is absolutely one of the primary reasons we are doing it, so we don’t end up with something that is unsavory or just not appropriate for the redevelopment and revitalization of the mall,” Mooney said after the meeting.
“The city has always been in the business of buying land, doing the development, putting in water, electric, sewer lines, so that companies can come in and immediately begin on the construction of their site.”
