Virus new hurdle for Mall of San Juan in Puerto Rico

Bloomberg

The grand opening of the Mall of San Juan was a celebration of Puerto Rico’s rosy future. There was confetti, a bomba band and roving politicians, including the governor and the mayor, glad-handing under the atrium’s blue-tinged skylight.
“There was so much enthusiasm,” says Alberto Baco Bague, the secretary of economic development and commerce, who was in attendance that day in 2015. “It was a moment of such hope and brightness.”
The complex, which briefly housed the Caribbean’s only Saks Fifth Avenue and Nordstrom stores, is one of the more costly symbols of dashed dreams in the US territory. Only five years old, it’s on the roster of the country’s troubled shopping centres, with more than a third of the retail space deserted. The developer, Taubman Centers Inc, says it has ideas to turn things around. For now, the Mall of San Juan is 631,000 square feet of cautionary tale.
It’s rare for such a high-profile development to come undone so quickly. But the mall finds itself at the nexus of several concerning trends: the exodus of wealth from Puerto Rico, the long decline of the American mall and the litany of disasters — both natural and man-made — that are keeping tourists away.
Looking back, it’s easy to say the mall never had a chance on an island where almost half the population lives below the poverty line and the median household income is slightly above $20,000, compared to nearly $62,000 across the US.
But when Taubman Centers did its due diligence a decade or so ago, it found much to like as it decided to put some
$475 million into the project. “The research all showed substantial wealth, growth in tourism, growth in the quality of tourism,” says Bill Taubman, the chief operating officer.
In an investor presentation in August 2014, the real estate investment trust said it expected the mall to perform in the top half of its 22 properties, which include the Beverly Center in Los Angeles and the Mall at Short Hills in New Jersey.
After all, tourism was going strong. The government had poured more than $3 billion into the sector to advertise and build or remodel hotels. The mall
site was a quick taxi ride from the port where the big cruise ships docked.
Baco Bague, who used to run the Puerto Rico Economic Development Bank, saw the mall as a crucial piece of the plan to give the island new economic footing as a white-beaches paradise for high-end remote workers, service-based industries and jet-setting tourists.
The thing about the Mall of San Juan, though, is that it offers a little bit of something for almost everyone.