The beauty of a free market economy is that you can own a business, grow it and benefit from your work because capitalism allows ownership of property, but it’s not like that in other countries. Some still remember how government in Cuba took over property overnight, from homes to casinos, that was never recovered. China and Russia have similar histories, but there is a downside of having a free market economy: owning a business does not guarantee it will survive.
Businesses Must Adapt
Recently, Covid brought misery to many businesses in our New Orleans tourism-based economy, but it also forced businesses to adapt, learning more about what their customers wanted and thinking outside the box to find a way to stay in business. For every restaurant that closed, there was another who treated staff like family who helped them keep the doors open. For example, the Winn-Dixie on Veterans blocked off part of their parking lot, not for customers, but for employees to get gas.
Restaurants learned to schedule work time according to when employees could promise to show up and work. Some restaurants shed paying for delivery since Uber took away profits, and developed their own delivery service. Other restaurants learned to prepare meals and have containers that kept foods hot during delivery. So the creative businesses must adapt to survive but the unimaginative, set-in-their-ways business fail, and fail they must so not to allocate resources inefficiently. And so was the Esplanade Mall in Kenner, Louisiana.
Esplanade Mall Was Sick Long Before It Died
Esplanade Mall was sick long before it died. Mall owners failed to see a sea of change in demographics after Katrina. Back then, if you needed a roof repaired on your house, you couldn’t get it done for months and months. There were not enough roofers to do the work.
Thank goodness we had help from Texas contractors who had the employees willing to do the work. I had contractors asking me to help them lease 20,000 square foot warehouses so they could have space for storage of roofing materials and for 20 roofers to sleep. “That’s against code”, I reminded them, but it was a clear example of what was happening.
Some of the workers who repaired your roof after Katrina were from Honduras who came here for a better life. They ended up living in Kenner which was the only place you could buy a house for $125,000. Kenner was affordable for the minimum wage residents we had. Thirty years later, we are still struggling to have enough affordable apartments for the minimum wage restaurant workers that drive our tourism economy.
The Job Of Mall Owners Is To Get Successful Tenants
The Esplanade Mall was 20 years old by that time but there was a demographic shift of residents in Kenner, and the Esplanade Mall owners failed to see it and adapt. Anchor tenants then were DH Holmes, Godchaux’s, Mervyn’s and Macy’s a year later. Over the next decade, Macy’s, Mervyn’s and Godchaux’s filed bankruptcy, Holmes was bought out, and the Mall owners failed to see the change in consumer spending and buying power of nearby residents.
Mall owners should have brought in tenants that offered goods and services that residents wanted. But rather than research what people would buy, they brought in tenants that sold what they wanted to sell. The result is that Esplanade Mall had to die.
New Owner Brings New Life
This month the Esplanade Mall was purchased by Eddie Ni who has 20 years’ experience with Windfall Group in Cleveland, Ohio, developing over 6 million square feet of commercial property. Eddie will convert Esplanade Mall into 800 apartments and new retailers. Nola.com asked Louisiana Commercial Realty broker Robert Hand about the $10 million purchase price financed by a $5.2 million loan from the seller:
“The good news for Kenner is that somebody has confidence enough to loan the money for this to happen,” Hand said. “And ironically, the only person that had confidence is the person that didn’t want the property anymore”.
For more information about retailers no longer in New Orleans, read our blog: The Wildebeest Must Die For The Lion To Live.