Another Black Friday has come, gone as Elk Grove's 'Ghost Mall' remains empty

November 24, 2018 | 

Yesterday was the biggest shopping day that has come to be known as Black Friday. The day after Thanksgiving marks one of the busiest days in sales for retailers of all types and marks the start of the traditional Holiday shopping season.

For Elk Grove, it also marks, by some accounts, what should have been the 10th Black Friday at the unfinished shopping mall now nicknamed the Ghost Mall. Had the Elk Grove Promenade, as it was known then had been opened on time, it would have had its first Black Friday in 2009.

The scaled-down shopping center, now formally called the Outlet Collection at Elk Grove, is now owned by Dallas-based Howard Hughes Company (HHC). Even though HHC has for the last several years planted sign saying the shopping center will be open the next year, all of those dates have come and gone, and still, the facility sets unfinished on Elk Grove's south side.

It is not without irony on what could have been the shopping center's 10th Black Friday that the Sacramento Business Journal reports that HHC has let its development agreement with the City of Elk Grove expire.

The text of the story, which can be viewed here, does not paint a pretty picture of the shopping center's prospects. The story suggests there is no communication between HHC, city officials, and the city has no concept of what will become of the facility.

With an expired development agreement, for many people who have followed this for several years, will probably bolster the conviction that HHC has no intention of ever completing the shopping center. Indeed, just over two years ago HHC sold about half of the 75-acre site to the Wilton Rancheria for their planned gaming facility.

While plans for the Wilton Rancheria will someday come to fruition - there is too much money for it not to - that project also has challenges that could delay groundbreaking for a few more years. Aside from litigation being waged by Stand Up For California against the Rancheria in federal court, there is the matter of who will finance the casino.

Until recently, Las Vegas-based Boyd Gaming was the announced financier of the $500 million gambling hall. However, during a recent conference call, Boyd Gaming executives announced they would manage the facility, but would not be financing the project.

That means the Wilton Rancheria will need to find another organization, the most likely being a hedge fund, to finance the casino. Given interest rates are increasing, and that even in the best of circumstances underwriters consider Indian casinos a risky proposition, the money lent to the Wilton Rancheria would be at a high-interest rate.

Notwithstanding the federal litigation, which will almost certainly be appealed regardless of the outcome in district court, the interest rate impediment could also push back the opening date of the gaming venue. As it relates to the unfinished shopping center, the uncertain opening date of the casino could dissuade HHC, or whoever decides to take over the facility, from opening the shopping center, or more importantly, scare-off potential tenants. 

As we have seen over the last 10 years since construction stopped in July 2008, the fate of the facility with each passing day suggests the shopping center will never open. The expiration of the development agreement could be the last nail in the coffin of the Lent Ranch Mall, cum Elk Grove Promenade cum Outlet Collection at Elk Grove.

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