In the early 1960s, Suzanne de Leon was a young mother who enjoyed going with her friends and their children to Wonderland Shopping City, the newest and largest indoor mall in San Antonio with a Handy Andy supermarket and two department stores, Rhodes and Montgomery Ward.
“We didn’t have any money to shop, but we went window shopping and we would have lunch … and it was a lot of fun,” said De Leon, now the mayor of Balcones Heights.
Her family later moved to Houston and when they returned to San Antonio in 1987, the suburban mall was still thriving and had new owners, a new name, Crossroads, and a new anchor tenant, Stein Mart.
“And then we started seeing a decline,” she said. The high-fashion retail chain Frost Bros. declared bankruptcy, and despite major renovations inside and out, by 1990, the mall was half vacant. Under new ownership during the past decade, the mall has again thrived, but potential remains.
A pending agreement between the city and mall owners could markedly change the trajectory of the 60-year-old mall, hanging on in San Antonio’s changing retail landscape.
Elected mayor in 2008, De Leon is serving her seventh term at the helm of a city where what’s now known as Wonderland of the Americas has served as a shopping, dining, and experiential destination since 1961.
Balcones Heights, a one-square-mile San Antonio suburb with a bedroom population of about 3,000, sits at the crossroads of one of the most traversed highway intersections in the city, a short distance from the South Texas Medical Center, and at the gateway of the city’s major corporate campuses. By day, the city’s population swells to between 25,000 and 40,000.
With an annual budget of $9 million, the city depends on sales tax revenue to fund city services and much of that comes from the mall.
“But when shops were closing, stores were closing, that affected our bottom line,” de Leon said.
Now the City plans to have a say in the largest piece of property within its boundaries.
City Administrator David Harris suggested several years ago that the City buy the mall as a way to invest in its future, de Leon said, and a holiday luncheon conversation with the mall’s owners opened the door to more formal discussions.
“One thing that we’ve recognized early on is that this facility is kind of the heart and soul of Balcones Heights,” Harris said. “It has not only financially helped the city through the years with, of course, property tax and sales tax, but it has been more of a regional draw.”
In February, the City Council voted in favor of a memorandum of understanding that could lead to an agreement between the City and mall ownership to acquire a partnership interest in Wonderland.
The proposal would give the City a 45% ownership stake in the mall in exchange for a $5 million capital investment that would pave the way for redevelopment of the property.
“What we see long-term is there’s some great potential to help redevelop that site,” Harris said. “I think we’re trying to look for this to be almost a catalyst for redevelopment efforts in our city – for the residential side, multi-family side, and commercial side.”
In 2009, a public-private partnership involving VIA Metropolitan Transit to redevelop Wonderland into a transit-oriented development stalled when financing fell through, according to Sid Weiss of Crossroads Mall Partners, the ownership group. The partners dropped the plan to develop 180 multifamily units and up to 30,000 square feet of new retail space on mall property. With the city’s backing, such a deal could be renegotiated.
“We do have a plan to do a residential component for about 122 market-priced apartments where Denny’s is located,” Weiss said, adding that a new Denny’s restaurant would be incorporated into the development.
But he’s adamant that Wonderland mall is not going to be the next Pearl, the former brewery turned successful culinary and residential development near downtown.
“We’re not trying to do anything different than be a value retail shopping center with a medical component [and] with an entertainment component,” Weiss said.
After peaking in the 1980s, shopping malls across the country have been dying off since before 2000 when consumer shopper habits began to change. In San Antonio, Central Park Mall closed in 2001 and both McCreless Mall and Windsor Park Mall closed in 2005.
Central Park Mall was redeveloped into Park North Shopping Center, and Windsor got a second chance at life as the corporate headquarters for Rackspace.
But the COVID-19 pandemic has only accelerated the decline of malls as retail meccas. Coresight Research estimates a quarter of the nation’s approximate 1,000 malls will close over the next three to five years. Bringing those sizable economic and social hubs back to life will be a challenge.
“Resuscitating a dead mall takes creative problem-solving – it creates conditions and incentives that cause aligned investment and cohesive development,” wrote Tom Vander Ark, a contributor to Forbes. “It almost always requires strong public-private collaborations that achieve community development goals while salvaging commercial value.”
Repurposing shopping malls as human development centers is one way to do that, Vander Ark writes. But that requires “a bit of catalytic capital and a dose of creative deal-making.”
A strategy to turn the once failing Wonderland mall into a mixed-use development with a human service component began years ago when Crossroads Mall Partners purchased the property in 2009.
Weiss’ plan called for retailers to occupy the second level of the mall and the first-floor level would be converted for medical use. That strategy has been successful and kept the mall afloat even as tenant Stein Mart permanently closed in September and the Santikos Bijou theater only recently reopened after a yearlong hiatus.
Today, a Super Target, clothing store Burlington, and Hobby Lobby are the biggest anchor tenants amid a number of smaller retailers – many of which got their start with mall kiosks before opening a mall store. That was another part of Weiss’s strategy, one that Marketing Director Victoria Hernandez said supports small business development.
“This is the idea of the American dream right here where a business owner can come in and start a business without the high expenses of what it would take to go into a brick-and-mortar or an actual inline store,” said Hernandez, who also serves as real estate lease administrator and operations manager for Wonderland Mall.
Wonderland Jump & Play rounds out an entertainment niche at the mall along with the Norris Conference Center for meetings and events and an amphitheater that annually hosts the Balcones Heights Jazz Festival.
And though Career Point College, once a major tenant, closed its doors there in 2016, it has been replaced by three Department of Veterans Affairs clinics and several physician and dental offices.
University Health occupies mall space for training that in recent months it has turned into a COVID-19 vaccination site, inoculating 1,500 people a day. State Sen. José Menéndez maintains an office in the mall.
Also on mall property are three restaurants, a bank, hotel, and entertainment venue Dave & Buster’s. In addition to VIA’s Park & Ride site on the property, VIA’s Primo Rapid Transit line cuts through the heart of Balcones Heights along Fredericksburg Road.
“The property is profitable and a survivor and is probably on the leading edge of redevelopment of major malls in the United States,” Weiss said. “I think it will be an example of what others will follow in the long term.”
Balcones Heights officials held focus groups on Friday to provide business leaders and residents an overview of the plan, and are planning to hold two town hall meetings in May. De Leon expects residents may question the plan until officials have a chance to explain how it’s good for the city, she said.
“There are some people who will question the city getting into a real estate transaction,” said Lorenzo Nastasi, director of economic development and public affairs for Balcones Heights.
It is, after all, a monumental concept, he said, in which the city becomes a partner in an expansive redevelopment project.
“For a city the size of Balcones Heights, a $5 million project that’s not a road or a sewer system … that everybody understands the cost [of] … is a very big idea,” Nastasi said. But the property is an important revenue source.
“And that is of interest to the city because providing quality services to residents and businesses costs more every year, just like everything else.”