More Bad News For Elk Grove's 'Ghost Mall' as Black Friday Online Sales Surge; Is it Destined to be an Overgrown Low-end Strip Center?

November 26, 2016 |

As the developers of Elk Grove's snake-bitten unfinished shopping mall now known as the Outlet Collection at Elk Grove learned yesterday and today, things they are a-changing.

According to several sources, yesterday, 2016's so-called Black Friday, traditional brick, and mortar retailers saw only modest gains in sales while their younger, more virile sibling, online sales, surged. Online sales rose even ahead of this Monday, the so-called Cyber Monday.

According to Reuters, "U.S. online sales surged on Black Friday, with Amazon.com Inc offering the steepest discounts among e-commerce sites as it set the agenda for what has traditionally been the biggest shopping day of the year for brick-and-mortar retailers. In-store shopping began to pick up in the afternoon, but the increase in customer traffic paled in comparison to the jump in online sales, analysts said."

Black Friday online sales totaled $1.70 billion for a 14-percent jump over last year. Traditional brick and mortar retailers like Macy's also saw a surge in online sales increasing to the point that servers crashed due to the influx of traffic.

For the developer of the unfinished Outlet Collection at Elk Grove, Howard Hughes Company, this is disheartening news but something they are undoubtedly keenly aware off. As Elk Grove residents have heard for the last couple years, construction will resume on the beleaguered shopping center once they have leases on 50-percent of the space on the scaled down facility.

Obviously, given the planned demolition on about one-third of the current footprint of the structure has not commenced, HHC does not appear to be meeting their self-imposed threshold. Additionally, given the legal cloud how hanging over the Wilton Rancheria's proposed $400 million casino resort, prospective tenants could be spooked out of signing long-term leases give the increasing uncertainty of that project.

Elk Grove City Councilman Steve Detrick has said at a recent City Council meeting HHC told him that they could be open by October 2017 - in time for next year's Black Friday and Holiday shopping season - if they can start a very aggressive construction schedule by January 2017. Not only has construction not resumed, but the planned demolition also shows no evidence of proceeding either. 

With the time ticking quickly towards that January 2017 deadline, with each passing day that October opening target of the Outlet Collection at Elk Grove looks increasingly fanciful. Given the surge in online sales, the fading need and popularity of shopping malls, the question is now becoming will the Outlet Collection at Elk Grove ever open as anything other than an overgrown low-end strip center?