Sunday, August 26, 2007

Why did Southtown Mall Fail?

The Harrison Square project analysis does not have one single bit of information on the impact to other businesses that I have found. The assumptions are basic with no real information on where or how they were derived. They appear to me to be nothing more than SWAGS.

The reason why Southtown Mall failed or closed raises a very basic question, why? Did the people who buy services and products there simply stop spending money? If so, then they should be some of the wealthiest in the county. Or did they simply spend their money elsewhere such as Glenbrook when it opened?

Did the opening of Glenbrook increase spending or shift spending? There are two ways to increase spending; increase income or spend down savings. The US Savings rate is very low. There does not appear to be much left before we begin dipping into savings. Spending down savings can only go on for so long before there is nothing left.

On a smaller scale, what impact did the opening of the Rave have? From what I heard, the stadium seating drew people from all over. The lines were long with decreased attendance at other theaters. Did the Rave's attendance drop after the opening of the new theater off of Dupont or the renovation of the Coldwater Cinema's? I used to visit the Rave many times a year, but since the construction of the Dupont and renovation of the Coldwater theaters, I have not been back. I spend no more today going to theaters than I did prior to the Rave. In my case, I contribute no net increase to theater spending in Fort Wayne.

When a Mexican restaurant closed on Lima and Dupont, we did travel to Jefferson Pointe where they moved to, but again my spending on dining neither increased nor decreased. Now since they have closed, we now eat at a different restaurant. However, there is no net increase in our spending on dining.

The basic premise behind the Harrison Square financial impact is that the residents will spend more without an impact on current establishments. This simply is not a realistic assumption. Southtown Mall failed because people began shopping elsewhere. The current Wizards Stadium at the Coliseum will fail as soon as the Harrison Square project begins.

They identify construction costs as being good for the economy. However, will Harrison Square actually increase construction or displace construction? Is total construction capacity in Fort Wayne finite or is there excess capacity to build Harrison Square with no impact on other construction projects? Will Harrison Square drive up construction costs locally for a short period of time?

My overall spending will not increase much over what I spent in 2006. Where I spend my money will change slightly from 2006. I seriously doubt that I am much different from others in Allen County. Therefore, if we as a whole do not spend any more in our local area, then where is this more than $200 million in increased sales going to come from?

The economic impact does not identify any loss of business to any existing establishment.

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