The city will not profit from the sale of the Palestine Mall, approved unanimously by city council Monday – and will actually lose money, the city finance director said.
Real-estate developer the Christon Company, one of several bidders, will pay $2 million for the mall and roughly two dozen acres – a far cry from the $3.5 million the city paid a decade ago. Company executives also said they're committed to investing another $2.5 million in the mall.
“We're upside-down on this thing,” City Finance Director Jim Mahoney told the Herald-Press Wednesday. “The city still owes just under $2.5 million; we'll have to pay off the rest.”
The city will seek to refinance the remaining balance, Mahoney said.
Mayor Steve Presley, who called the mall sale an “excellent deal” for the city, disagreed with Mahoney's assessment.
“We have more than enough money in the mall fund to make up the difference,” Presley told the Herald-Press. “The remainder will go into the general fund. We absolutely did profit.
“We also sold an acre-and-a-half lot at the mall almost two years ago for nearly $900,000. That profit went right into the general fund.”
Another economic benefit: When Christon takes ownership, the mall will go on the city's tax-rolls, Presley said.
Moreover, Presley said, the buyers did not ask for any incentives to build in Palestine.
“We also had free rent for the library for almost 10 years,” he added. “How much would that have cost the taxpayers?”
Christon Company CEO John Christon told the Herald-Press his firm is recruiting national tool companies, restaurants, entertainment venues, and clothing stores.
“We're already speaking to some national brands,” he said. “I can't name names yet, but it's an exciting opportunity for everyone involved.”
Christon expects groundbreaking within 90 days after the $2.5 million in renovations begin.
“You won't be able to shop in it yet, of course,” he said. “You will be able to recognize it as a mall, though; and maybe even recognize some of the stores coming in.”
The most labor-intensive part of the project, Christon said, will be raising the mall's landscaping about 30-feet, to near street-level.
Rather than attempt to raise the actual building, or demolish it and build again, a front-facade that will lead to the current building is planned.
Familiar sights in the mall, including JC Penney, Texas Workforce, the VA clinic, and the county Veteran's Services Office are all staying.
Christon said he would be pleased if the library stayed, as well. The NorthPark Mall in Dallas asked the city of Dallas for a library, he said.
“I think it's a great idea,” Christon said. “It's good for the community, and it guarantees people in the mall.”
Having first approached the city nearly five years ago about purchasing pad space at the mall, Christon said he is eager to begin building.
“I love this town,” he said. “From the first time I approached the city, everyone has always been so friendly and helpful.”