$250 million redo of tired regional mall signals further change in Nebraska’s fourth largest city

$250 million redo of tired regional mall signals further change in Nebraska’s fourth largest city
Conestoga Mall was pretty slow Sunday, especially compared to the heyday of the enclosed regional shopping center that opened in 1974 and pulled visitors from surrounding Nebraska towns seeking retail, dining and other services. Teens Britton and Alexa Shack and Madelyn Kral sit on a bench waiting for their ride to come. (Cindy Gonzalez/Nebraska Examiner)
March 22nd, 2023 | Cindy Gonzalez, Nebraska Examiner

GRAND ISLAND — A dying 1970s-era shopping mall is about to get a $250 million makeover that local  leaders hope will help return a retail sparkle and regional tourism draw to Nebraska’s fourth largest city.

In its next iteration, the 50-acre Conestoga Mall site is to feature apartments and a hotel around a modern, downsized shopping complex that will offer a Target and a national tenant lineup yet to be identified. The outside of Grand Island’s Conestoga Mall on March 19, 2023. (Cindy Gonzalez/Nebraska Examiner)

Incentives, public subsidies

Working with Omaha-based developer Woodsonia Real Estate, city officials have agreed to a package of public subsidies and incentives covering about a third of the project cost.

Included in the assist is $26 million in city-approved tax-increment financing and an occupation tax on on-site transactions that over time is expected to generate nearly $37 million to pay off financing bonds.

The city over multiple years is to contribute about $10 million from its general fund.

“This will re-energize shopping in Grand Island,” said Hall County regional planning director Chad Nabity. “And we desperately need the housing — it’s just a quick walk to go to restaurants, the movies, Target. All of those things play into making a better place.”

The future Conestoga Marketplace is viewed as a key commercial revival for this central Nebraska city of about 44,000 people that, overall, is seeing a burst of housing and economic development energy.

Growth in Grand Island

Among that other activity:

The regional Grand Island Medical Center opened in the summer of 2020, near the start of the pandemic. And the Prairie Commons health care campus, where the hospital is planted, continues to grow. A pair of cyclists ride in a deserted part of the mall  parking lot. (Cindy Gonzalez/Nebraska Examiner)

This month, for example, Tabitha Senior Living Community, with about 160 units, celebrated the grand opening of its roughly $50 million investment, which is expected to add some 70 new professional jobs when fully staffed.

Nearby, 90 luxury apartments just opened as the first phase of a new and developing 200-acre Prairie District, which upon completion in a decade or so is to be a village of hundreds of residential dwellings, a hotel and commercial structures around a trail system and three new lakes.

Soon to start transforming into housing and more is the historic Veterans Home, a roughly 50-acre campus a brief drive from the Conestoga mall.

A tourist pull

Cindy Johnson, president of the local Chamber of Commerce, said the Conestoga property was key to keeping intact Grand Island’s heritage as a shopping “destination.” In its better days, she said, the mall lured 250,000 people a year from the surrounding 90 miles who sought dining and other services in the city. Grand Island is just off Interstate 80 and accessible to traffic from U.S. Highways 281, 30 and 34. Signs of change can be seen throughout the mall. (Cindy Gonzalez/Nebraska Examiner)

“The reason that site is so important to us is we have the reputation of being the retail hub of central Nebraska,” Johnson said. “To have it go from being such a gem of the community to a less-tended-to property, in a bit of disarray, was really hard for Grand Island.”

Originally opened in 1974, the enclosed Conestoga Mall (not including the smaller retail structures around it) spanned some 550,000 square feet, Woodsonia said. Over the decades, it hosted anchors including J.L. Brandeis & Sons, JCPenney, Sears, Younkers and Dillard’s.

None of those department stores remain, however, and in the last few years maintenance of the mall and remaining stores had been spiraling downward under out-of-state ownership, Nabity said.

Local officials were concerned, he said, that the property might meet the fate of other condemned malls, including one the landlord had owned in Hastings.

Local ownership appeal

While city leaders were cognizant of online shopping trends and a changing retail market, Johnson said they still hoped to retain the shopping legacy at the mall site in some fashion.

The idea of having a more invested and local ownership was appealing. Main entrance of Conestoga Mall this past weekend. (Cindy Gonzalez/Nebraska Examiner)

And, said Johnson, she and others believe that the public investment in the Woodsonia-led project is worth anticipated future payoff in increased sales tax revenue, tourism and economic development spinoff.

With the occupation tax, bonds used to help finance the project will be paid back from a 1.5% tax on transactions within the city designated “enhanced employment area.” 

Under TIF, developers take out a loan to help cover eligible redevelopment expenses, and the loan is paid back, generally over 15 or 20 years, by using the increased property taxes generated on the new development.

Normally, property tax payments go to support schools and other local tax-reliant bodies. During the TIF period, the property owner continues to pay a portion of property taxes to local governments based on the valuation before any improvements.

Target is among newcomer stores

A child plays on a carousel at Conestoga Mall. (Cindy Gonzalez/Nebraska Examiner)

According to Mitch Hohlen of Woodsonia, the main shopping center will be reconfigured and completely renovated with new infrastructure and landscaping.

Target has purchased land for a 150,000-square-foot store to be built next to 150,000 square feet of shopping space that will include the other stores, he said. Woodsonia is not ready to announce newcomer stores but Hohlen said the lineup is nearly complete and leased.

Of the existing stores, about seven will remain as part of the future redevelopment, Hohlen said. He declined to say which will stay after current leases expire.

While some dismay has risen due to the changes ahead, Johnson said she looks at it this way:

“You have to break a few eggs before you get the souffle.”

‘Kind of lame’

This past Sunday, Conestoga patrons interviewed by a Nebraska Examiner reporter said they missed the mall action of earlier years and hoped to see a reinvigorated shopping scene.

Three 14-year-old girls sitting on a mall bench, near several closed store bays, said they’d like more options. 

“We walk around and try things on for fun,” said Britton Shack, who was with her twin sister, Alexa, and friend Madelyn Kral. Shoppers stroll through Conestoga as a redevelopment prepares to launch. (Cindy Gonzalez/Nebraska Examiner)

“I heard we’re getting a Target, we’re excited about that,” said Madelyn.

Dustin Harris of Hershey, Nebraska, who was in Grand Island with his family for a wrestling tournament, said he was shocked when he entered the mall. Now 42, he said he used to come as a teen-ager to a much different scene.

“You’d walk through that door and there were people as far as you could see,” he said. “Now, this is really kind of lame.” 

Still, he and wife Lena found a sweets shop called The Incredible Bulk and a child’s play area that entertained their little ones: twins Brayden and Brianna, 6, and Baileigh, 4.

Hotel overload?

Managing the candy store was Candy Brooks, a seasoned employee of nearly 23 years who has served customers from across Nebraska and the world, including a recent sweet-toothed visitor from Chile.

As far as she knows, she said, The Incredible Bulk will remain and continue what so far has been a 38-year run at the mall.

The future is exciting, yet confusing, because, she said, details seem to be shifting.

Also, she said, she thinks there should be more stores — and not another hotel.

“It needs to be updated,” Brooks said of the mall. “But I don’t believe in the hotel and all of that because we need more stores.” Candy store has been a mall staple for nearly 40 years. (Cindy Gonzalez/Nebraska Examiner)

In a departure from the older-style mall where customers walked through an enclosed common area and into stores via interior-facing entrances, Hohlen said that each store of the future Conestoga Marketplace will have separate exterior entrances.

Housing a feature of future site

Around the perimeter of the main shopping complex will be  nine out lots for a total of about 50,000 square feet of building space for standalone restaurants and other businesses.

In addition, the apartment component at the northeast corner of the site is to feature nearly 300 units, parking and amenities such as a clubhouse. 

The hotel to the west of the apartments will rise five stories.

“It’s really transforming a dying mall into a vibrant mixed-use development,” said Hohlen. 

The Woodsonia team, which has developed Omaha housing and commercial projects, also repurposed the Mall of the Bluffs site.

‘Long overdue’

Nabity, the regional planning director, expects development at the Conestoga site to take about three years. Asbestos removal begins soon. Stores will shift position in the mall as demolition occurs.

“It’s long overdue,” said Johnson, who said the property has been a focus of economic development leaders since before the pandemic.

“Instead of a tired, 50-year-old mall, we’ll have a contemporary shopping experience that says progress,” she said. Future Conestoga Marketplace layout, with new Target and other stores in the big center structure and other standalone retail box buildings around the perimeter. An apartment component and a five-story hotel, shown at the top of this rendering, are part of what developers said is a $250 million redevelopment project. (Courtesy of developer Woodsonia Real Estate)

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