Nashville Flood Recovery Update: Opry Mills Mall

Currently, the remediation work at Opry Mills has stopped and store owners are finding new locations where to set up shop.

The majority owner, Simon Property Group is taking legal action against multiple insurers who are not paying up on the insurance claims filed. The lawsuits could take several months to be settled.

Local government and shoppers ask themselves whether or not the mall will ever re-open. Being one of the largest malls in the area, its closure could cost millions of dollars, in sales taxes alone, in the days remaining until Christmas.

Not only that, but some 3,000 employees that worked in the mall’s 200 retailers are now out of a job, joining the ranks of what is now a 9 percent unemployment rate in the region.

The projected date to re-open is August 2011, but with the complicated insurance legal suits, it could be even later.

Flood waters went up as high as 10 feet in some areas of the mall and the restoration will cost more than $200 million. However, Simon is deciding not to continue construction until the court decides on the cases being opened. This decision is something that leaves many wondering “Why?’

$50 million, the insurance companies’ cap for the time being, has already been spent on initial restoration efforts, but last week this work was stopped as the bill reached that maximum.

Some speculate perhaps there’s more to it than this, saying that perhaps the mall’s owners have doubts about re-opening because it may have not been doing very well to begin with, in this difficult economy.

There could be some truth in this since Simon Property Group is the largest mall owner in the US and one of the biggest worldwide. For example, in its second-quarter earnings report to Wall Street investors, it didn’t even mention May's Cumberland River flooding or the closing of Opry Mills. They normally should have mentioned it if they thought it could affect the bottom line, but owning 393 properties in North America, Europe and Asia, this was probably something like a rounding error to them.

But to Nashville, Opry Mills’ Mall closure is no small matter. Shoppers will now go elsewhere for their holiday needs this year and mall tenants are moving to malls in other counties. Sadly, other retailers, having already been hit hard by the weak economy, may not even relocate.

Some people predict the mall will never re-open, while others remain optimistic, seeing as how it showed great success when it was up and running.

Only time will tell.

To read the Tennessean article, click here:
www.tennessean.com/article/20101003/BUSINESS01/10030364/2047/news01