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McAllen's Proximity to Mexico Border Helps Build Red-Hot Retail Sector

La Plaza Mall

La Plaza Mall is a popular shopping location in McAllen that still flourishes among the growing retail developments in the city. Many chain retailers experience their highest national per-square-foot sales in their La Plaza Mall locations.

Rich‚ molten hues ring the terra cotta roofline of McAllen’s La Plaza Mall.

And nothing could be more appropriate.

Measured in mercury‚ sales in this Rio Grande Valley shopping mecca would be red hot. By a more conventional measure‚ La Plaza stores can soar past the $500-per-square-foot mark‚ besting sister stores anywhere in the nation.

That spells success for mall owner Simon Property Group‚ anchors like Macy’s and in-line tenants like Guess. But McAllen’s penchant for luring millions of shoppers a year from two hours deep into Mexico is a boon for independent retailers‚ too.

A second-generation jeweler‚ 31-year-old Ricardo Portillo watched his parents Carmen and Ricardo Sr. grow their business from a couple of jewelry cases to a thriving Brownsville location with several thousand square feet. Nearly a decade ago‚ Ricardo Jr.

launched a Harlingen store and in 2005 opened Portillo Jewelers’ third store in La Plaza Mall.

McAllen commerce‚ he says‚ is a multifaceted international gem.

“Any given day‚ a German engineer could come into the shop who happens to be on a one-month hiatus to consult with a business that has a factory in Reynosa (Mexico) and an office here in McAllen‚” the younger Portillo says. The next day might bring Filipino nurses recruited to McAllen for their medical skills.

“Part of our competitive advantage is the individualized attention we give – finding out not just what they came in for‚ but what they might be happiest with.”

Portillo’s creative catering symbolizes what’s happening on a macroeconomic level: Developers do more every day to woo shoppers.

And besides a heightened focus on customer service‚ strategic location is becoming even more critical among so much competition.

In 2007‚ Simon Property opened the 600‚000-square-foot Palms Crossing in west McAllen‚ adjacent to the new $36 million convention center that is enjoying steady bookings from conven­tioneers such as the NAACP and the Catholic Daughters of America.

Traveling east on the U.S. 83 expressway‚ Las Tiendas Plaza and several adjacent plazas offer frontage-road retail‚ while 10th Street north to Edinburg features many popular boutiques and specialty stores‚ an upscale cinema serving food and alcoholic drinks‚ and the J.C. Penney-anchored Shoppes at Rio Grande Valley‚ an $80 million development under way by First Hartford Realty.

Farther east on U.S. 83‚ Chelsea’s Rio Grande Valley Premium Outlets grew sales taxes fivefold the first year of operation. That prompted a 40-store expansion to 150 outlets.

Some 37 percent of McAllen area sales stem from Mexican visitors‚ whose buying power helps create more choices.

“That’s the conservative estimate‚” says NAI Rio Grande Valley broker Michael Blum of the 37 percent. McAllen itself registered $3.3 billion in annual retail sales in 2006. “It’s an astounding number.”

Blum says development of 1.5 mil­lion square feet of retail space is under way or recently completed‚ with another 800‚000 square feet recently announced.

“It continues to grow each year‚” says Chamber CEO Steve Ahlenius‚ who hopes for high-end retailers Saks Fifth Avenue and Nordstrom soon. “I see nothing but opportunity on the horizon.”

Story by Gary Perilloux
Photo by Antony Boshier

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