Report From Eureka: Bayshore Monster Mall

Mendocino County

August 24, 2009 Ukiah Valley, Mendocino County, North California

Driving to Oregon and wanting to break up our trip, Bill and I stopped at Eureka’s Bayshore Mall.  I wanted to see how the economic downturn was affecting the mall.  Maybe there were some lessons for Mendocino County voters as Election Day approaches for Measure A.

We were surprised to see the parking lot practically full.  Maybe things weren’t so bad after all.

The mystery deepened once we entered the mall because it was practically empty on a Thursday afternoon.

What about all those cars in the parking lot?  We did not solve the mystery, but we did take a few pictures before a very imposing guard informed me that taking pictures was prohibited.  Why? I asked.  Because, he said, there were concerns about trademark infringement, what with all those logos (of extinct businesses?) and store names right out there for anyone to copy.

I harrumphed, quietly, because as I said the guard was 6’5” or so and I didn’t think having my camera snatched would be worth the hassle to get it returned.

A more likely explanation for stopping my picture taking spree could be that the mall owner, General Growth Properties, Inc., didn’t want any potential customers to see how few shoppers were buying and how many shops had closed.

On April 16, 2009, General Growth Properties and all its malls, 19 of which are in California, filed the largest real estate bankruptcy in US history.  GGP’s share price declined 97% to $1.05 on April 15th.  And that’s not all:  the company had made loans to its officers without notifying the Board, forcing the CEO to resign.

The latest financial news is that GGP is in talks with its lenders to obtain debt extensions, which, if granted, would allow it to exit bankruptcy.  Even if GGP exits bankruptcy, only shoppers with lots of money will save it.

Contemplating GGP’s troubles and what they could portend for the future of the Masonite site, a new shopping mall is the worst possible use of that site, especially now when shoppers do not have lots of money.  Locking in a shopping mall would be stupid.  If the voters defeat Measure A the site can be preserved for other endeavors.  Surely there are better uses that would generate income for the county while keeping profits local.


One Comment

DDR and GGP have more in common than sing-song corporate initials. DDR has seen its stock value plummet from the low $50’s to somewhere under $1.25 as of last March. Of course they have participated in the recent dead-cat bounce, and are currently at about $8.50. Just wait -commercial real estate will be among the next wave of dominos to fall hard. I suspect DDR would like to push through the zoning change with the hope of flipping the property, without ever building one square foot of anything.

It hardly matters anymore. Keep your eye on oil. Reality will soon overtake the whole problem and shut it down.