New Horizon Mall developer calls lack of stores and shoppers 'totally expected'
Unique retail centre north of Calgary now has 11 stores open and 39 more coming
The president of the company behind the so-far deserted New Horizon Mall north of Calgary says they fully expected a slow start to business there.
The 320,000-square-foot, Asian-inspired mall boasting more than 500 units is modelled on Toronto's Pacific Mall, albeit with several million fewer people living nearby.
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Retail units at the New Horizon Mall were sold privately to buyers, much like selling a condo. The developer sold 99 per cent of them.
But so far most are empty with only 11 open for business since the mall opened in May.
The developer behind the $200-million project is playing it cool. Meanwhile, sites like Kijiji are full of increasingly desperate ads offering space to lease in the mall. The ads feature reduced rents and incentives like three and even six months free rent, with some rents as low as $399 per month — and still no takers.
"Back in 1997, we built a similar mall in Toronto, Pacific Mall. We went through exactly the same process," said Eli Swirsky, president of the Torgan Group, which developed the New Horizon Mall with partner MPI Property Group.
"There were over 400 stores and it took about two years from beginning to end, and 18 months from beginning to reaching 75 per cent occupancy," said Swirsky, who believes New Horizon is on track to match Pacific Mall's success.
A walk around New Horizon Mall is a surreal experience with a huge expanse of unoccupied storefronts and walkways along with a deserted food court and parkade. But that will change, according to the developer.
"The pace is going to accelerate. This is the beginning of the process and it is on-plan, on-schedule and totally expected," said Swirsky, despite a grand opening event planned for later this month being cancelled and pushed back to an as yet undetermined date in 2019.
Some business owners at New Horizon are happy to secure their spot on the ground floor of what they believe will be something special, while others are worried and frustrated about a glaring and costly lack of activity and an occupancy rate of just over two per cent more than five months after the first store opened its doors.
"The people that opened first will be the winners," insists Swirsky. "I guess the world is divided into skeptics and optimists."
"The people who are going to be the risk-takers, innovators and entrepreneurs are going to be rewarded big time," he said.
"It may take less than two years, nobody can say for sure," he said.
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Every one of Swirsky's examples of why New Horizon will succeed involves the success of the Pacific Mall in Toronto, which opened 25 years ago.
"I don't see any difference. Whatever happened at Pacific Mall is happening here. The only difference is the weather," said Stephen Wong, founder of Living Realty, who sold all of the stores at Pacific Mall back in the 1990s.
But the profile of the purchasers and stores in Toronto was different, being almost exclusively Chinese Canadian, along with the two cities' vastly different populations and ethnic makeup.
Wong says stores that sold at Pacific Mall for $55,000 in 1993 sold for more than $480,000 in 2018.
"It started out slowly but took about two years to rent out the whole mall," said Wong. "The last 25 per cent took the most time," he added.
"Out of 500 unit owners at New Horizon, we know about half intended to rent it out, and who knows, the other half who haven't been in touch with us they may be opening up a store themselves," said Wong, adding he wouldn't expect owners to try and flip their units until they could make a profit.
"That's the not the real estate play," he said. "They stay there 25 years and make lots of money."
New Horizon is now offering owners a $5,000 incentive to open and lease their units before Dec. 31, 2018.
The mall is also trying to attract cultural events and festivals to bring people through the doors and onto its entertainment stage at the centre of the mall.
The next event is a fall and Halloween festival on Oct. 27, which was supposed to have been the mall's grand opening.
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