Sharpstown Center seized in foreclosure

Sharpstown, the first enclosed air-conditioned shopping mall in Houston, has suffered in the face of the same tough competition that has been battering the nation's big department stores in recent years. Discounters and large retailers such as Best Buy and Wal-Mart have been taking a bite out of the consumer dollars that used to go to department stores.

It joins Town & Country and San Jacinto malls on the list of local malls that have been through financial difficulties in recent years. Westwood Mall shuttered all of its stores except Sears and was recently transformed into a technology building.

The big blow to Sharpstown, on the Southwest Freeway at Bellaire Boulevard, came five years ago when the First Colony Mall opened farther west on the Southwest Freeway, said shopping center broker Tom Estus of Shelby/Estus Realty Group.

"It's a classic case of being passed up by newer, better malls. First Colony clipped it the hardest," Estus said. "The other places were more exciting to shop in. They were new. They were easier to get in and get out of."

Veteran shopping center developer Ed Wulfe of Wulfe & Co. said the loss of anchor stores has been a major drain on Sharpstown Center.

J.C. Penney closed in 1998, and its space remains vacant. Oshman's closed its Sharpstown store in 1997. Montgomery Ward, as part of a national shutdown of all of its stores, will go dark in Sharpstown this spring.

"When you don't have anchor stores, it's hard to make a mall work," said Wulfe, who redeveloped Meyerland Plaza and is working on a makeover of Gulfgate Shopping Center.

Sharpstown Center received a $50 million renovation in the early 1990s. But Wulfe said Sharpstown needs a lot more new tenants as well as a major redevelopment, perhaps opening up the mall's exterior similar to the way Meyerland was rebuilt.

The profile of the customers living near the mall also has changed, Wulfe said. The eight-screen movie theater there is now showing Spanish-language films and discount showings of second-run movies.

Wulfe said the changing demographics can be addressed, but it may require some big changes.

"Sharpstown really needs to be reinvented," Wulfe said.

The mall is owned by Travelers Insurance, following a foreclosure proceeding Tuesday. Before the foreclosure, the mall had been owned by Sharpstown Center Associates, a New York investment group. A spokeswoman at Travelers said she was not prepared to comment on the mall.

Marshall, the mall manager, said Sharpstown still performs well, although he declined to disclose the annual sales there.

Some tenants also say their Sharpstown locations still do a brisk business.

"Sharpstown is a good store for us. It's always been a good store for us," said Foley's spokeswoman Priscilla Thorne. "We enjoy a lot of customer traffic there."

The Sharpstown store was the second store in the Foley's chain, its first venture outside downtown, a bold step 40 years ago.

Foley's was a key anchor as Sharpstown brought in the new era of shopping the Houston way: in an air-conditioned suburban mall.

The Southwest Freeway outside the mall was brand-new and had opened huge swaths of wide-open prairie to developers. New houses and hordes of new shoppers were going to the suburbs.

Sharpstown's grand opening, in September 1961, was no small affair. President Kennedy's brother Ted was the main speaker.

In those days, just coming to the mall to see it and stroll around was a big event for Houstonians. And Sharpstown remained a powerful force in retailing for years.

When Y'alls Texas Stores opened a shop in the Sharpstown Center in 1985, the mall was the reason, Y'alls President Sam Wisialowski said.

"Sharpstown was one of the best malls in the city. That's why we opened a store there," he said.

But in the late 1980s, the mall went into decline.

"Our sales were falling 25 percent and 30 percent per year," said Wisialowski, who closed the Sharpstown Y'alls in 1990.

"I've never seen a mall drop so far, so fast in all my life," he said.