Palestine Mall Sale Brings the Prospect of Economic Development and Revitalization
Tuesday, July 20, 2021
Palestine Economic Development Corporation is pleased to announce the finalized sale of the Palestine Mall which allows the City to turn the page to a new chapter for economic development and revitalization.
When the City purchased the Palestine Mall 11 years ago in 2010, it solved several issues. One, it gave the Palestine Public Library a new home. The library had suffered roof collapses in 2009 that left the building condemned. The estimated $12-to-$15 million to construct a new library was not feasible at the time. By moving into the mall, the library was once again able to serve the citizens of Palestine. Also around the same time, the mall provided the solution the City was seeking for space for vocational classes and the Early High School College Initiative Program.
In addition to the Palestine Public Library and retailers JCPenney, Aaron’s, and Burke’s Outlet, mall tenants grew to include the V.A. Clinic, Texas Workforce Office, and Trinity Valley Community College. However, as of the end of 2020, JCPenney closed its doors.
The purchase price of the mall 11 years ago was $3.5 million — a bargain due to the condition of the building that was built in 1980 and last renovated in 1991. After the purchase, the city made profits of $800,000 from mall pad sites.
The mall acquisition originally solved the problem for needed space and stemmed the decline of the building, but the site was not realizing its full economic potential for Palestine. In March 2019, with the property appraised at $2 million, the City contracted with EDGE Realty to list and sell the Palestine Mall. Buyer, John Christon, was brought to the table, but delays occurred due to the pandemic and changes in city personnel that shifted Palestine Economic Development Corporation to the lead on the project. During these unavoidable delays, the property sustained 56,000 square feet of water damage during the February 2021 ice storm. Taking this damage into account, and to avoid shouldering the time and financial burdens of repairs, the City adjusted the purchase price to $1.5 million to expedite closing the deal.
The proceeds from the sale pay off what the city owes on the building, but equally as important, the sale gets the property back on the tax rolls. When the promise of added sales tax revenue and new shopping opportunities for residents is combined with the prospect of several new, large employers creating jobs, the economic possibilities look momentous.
“We are excited about the redevelopment plans Mr. Christon and Palestine Mall Redevelopment LLC have for the property,” said Lisa Denton, Director, Palestine Economic Development Corporation. “The recent interest we’ve seen from various national brands indicates a brighter retail climate on the horizon for Palestine. The delays along the way were difficult, but we anticipate the rewards will make it worthwhile for our community, and we appreciate his persistence in the process.”
Current tenants like Trinity Valley Community College, the library, and the VA Clinic are following their lease terms, with some negotiating extensions. The library expects to relocate to a more central location within the city to make it more accessible to the community. In the meantime, the City is negotiating a short-term lease for it to remain in the mall while plans are made. The VA Clinic has requested a three year extension, and has issued a RFP for construction of a larger facility in Palestine.