MCALLEN, RGV – Visitors from Monterrey know how special it is to shop in McAllen and will they come back more frequently once they experience the new expanded wing at La Plaza Mall, says general manager Roberto Luciano.

Luciano gave an interview to the Rio Grande Guardian about the impact violence in Reynosa has had on shoppers from Monterrey as he officially opened the 245,000-square-foot expanded wing.

“I honestly believe that with the influx of the stores we are bringing in, unique stores they are not going to have in Mexico, we will see an increase in shoppers. For the families from Monterrey, it is an experience to come to McAllen. It is an old habit,” Luciano said.

Roberto Luciano

“Mexican nationals built McAllen. Honestly, everyone here is from Mexico. We are not part of that political (anti-Mexico) thing. Everyone is family here and the Mexican shoppers know that. The border violence, it has always been there, it is cyclical. If they feel safe, they will come.”

The expanded wing is on the north side of La Plaza Mall, facing I-2. Luciano said it offers highly-sought, specialty and first-to-market retailers, restaurants and entertainment options. Retailers in the expanded wing include Kendra Scott; Reeds Jewelers; Texas de Brazil; Rocky Mountain Chocolate Factory; Auntie Anne’s/Cinnabon; Flip Flop Shops; Divine Formal Wear; MAC Cosmetics; Sharol Shoes; H&M and T-Mobile. Opening in December is Encore Shoes, a national and new-to-market retailer that will offer an array of shoes and accessories for the entire family.

In his remarks at the official opening of the wing, Luciano said the entrances to the mall have been modernized, that LED lighting, new tile floors, and luxury seating has been added. Parking had been increased from 4,800 to over 6,100, including 1,260 in the new Dillard’s three-level parking deck.

Next February, La Plaza Mall will add a first to the market Disney Junior Play Area. “Kids are going to love it,” Luciano said. “We could not be more thrilled to introduce this new and enhanced experience.”

Also coming in 2018 will be international retail brand Zara, regional favorite Palenque Grill, and nationally recognized restaurants Buddy V.’s Ristorante and Carlo’s Bakery.

In his interview with the Rio Grande Guardian, Luciano said: “With everything else we have done, I think there will be a significant influx, especially this holiday season, of shoppers from Mexico. We need to get these images out to Mexico.”

Asked about the violence in Reynosa and the decline in sales tax revenues for the City of McAllen, Luciano said: “Reynosa has always been our market. The people from Reynosa, the violence does not impact them. They are always coming over. It is a daily commute. McAllen, it is part of Reynosa. I think the issue is Monterrey. They have come here for years. With the new additions, once they experience it, they will come back.”

In addition to the opening of the expansion wing, Simon has completed the renovation of the interior and exterior of the existing mall. John Phipps, vice president of development for Simon said shoppers will notice an enhanced look and feel of the property with renovated mall entrances, flooring, LED lighting, skylights, upgraded restrooms, luxury seating and landscaping.

“Shoppers come to our properties for dining options, the sensory experience of visiting our retailers, and to enjoy a variety of entertainment offerings, creating unique destinations to spend time together,” Phipps said. “We are confident that the combination of vibrant amenities offered in the new expansion wing will ensure La Plaza remains a top destination in the Rio Grande Valley.”

City of McAllen Mayor Jim Darling was at the official opening of the expanded wing. He said La Plaza Mall made a big difference to McAllen the day it first opened in 1976. He called it South Texas’ premier shopping location. “La Plaza put our city on the map as a true shopping destination for the Rio Grande Valley. Simon has been a great partner since the day the renovation began, creating jobs, supporting the community and attracting visitors from all over the world. We look forward to their continued investment in McAllen with these expanded options.”

McAllen City Manager Roy Rodriguez also spoke at the event. He thanked his staff for helping Simon make the project happen.

Aviation director’s perspective

Elizabeth Suarez, McAllen’s aviation director, attended the official opening of La Plaza Mall’s new wing. Suarez urged city leaders and business owners not to panic over the latest plunge in sales tax revenues.

Suarez acknowledged that McAllen currently faces challenges caused by a drop in the number of Mexican tourists and shoppers visiting the city. However, she said the long-term trends remain positive.

Elizabeth Suarez

“My message to our business partners is don’t be alarmed. Use these lows in the market as an opportunity to evaluate how we do business. Let’s make things more efficient and be more creative about what we do to bring that business in. It is not a time to panic. It is a time to work a little harder,” Suarez said.

On the same day the new wing at La Plaza Mall opened, McAllen Economic Development Corporation held a board of directors meeting. At the meeting, hotel manager Ed Lopez, representing the McAllen Chamber of Commerce, unveiled the latest McAllen Area Economic Pulse. This monthly economic index ranked McAllen’s “pulse” for September at 184.6, compared to 189.0 for the same month last year.

Lopez said the monthly report showed lodging tax receipts for September 2017 down a “whopping” 27 percent, when compared to the same month last year.

Suarez said September was not a good month to pick when analyzing sales tax revenue trends.

“September is not a good month for us to speculate on. It was the month full of natural disasters. Our (McAllen Miller Airport) September trended lower than any September in the last four years. If you look at that month you could speculate a million things. It is not good to do so,” Suarez said.

“It is the month we had the earthquake in Mexico, so that route did not have the service flow it normally has. It is the month that we had the hurricanes. In Puerto Rico, all service was suspended. In Houston, which really impacts this local market, all connection was suspended (due to Hurricane Harvey). We had massive natural disasters that impacted market flows. September is not an indicator of how we perform,” Suarez said.

Suarez said it is better to take a 20-year snapshot to see how markets work in the Rio Grande Valley.

“We are in a very unique area with a very unique dynamic to its market. My argument, upon reviewing 20 years of data, is that we work in trends. Those trends are doing very similar things about every five years,” Suarez said.

“We’ve got new challenges, with the peso devaluing the way that it has, with some of the safety and security discussions we have had in Mexico. We cannot deny those are changes to the market. They were not completely anticipated. We have got to adjust to them. It is a new baseline. It is a new market trend. But the market will continue to perform as it has done historically. It is not a time to panic. It is a time for us to approach the market conservatively with regard to expenditure and work creatively.”

Suarez said she is convinced the long-term trends are positive for the Valley generally and McAllen specifically.

“There are so many exciting things happening in this region it is sometimes difficult for us working in different aspects of the market to discuss all of these things. I can tell you, I have been in this city for 18 years, there is such a tremendous dynamic right now. I think we are coming to a crossroads. There are all types of opportunities, globally. Markets that are intersecting with our market where they have never intersected. It is a dynamic that is different,” Suarez said.

“We are posed with different challenges from southern markets. But we also have some opportunities from the north that we have not had in the past. We have had challenges from a federal level that have impacted perception. I think in these times, the thing that has set McAllen and the Rio Grande Valley apart is that when we are in a lull, we really come together. That has been the leadership we have always had. We have always come out of things stronger.”

Suarez explained some of the things she is doing at McAllen Miller International Airport to arrest the slide.

“We are looking at creative ways to encourage our Mexican friends and family to continue coming into McAllen, South Texas, area. It’s really important for us to talk about all the offerings we have that are first class. Two things we look at as challenges, as we try to develop new air markets in Mexico,” Suarez said.

“The first is that a lot of the air markets in Mexico are really sophisticated markets, like Mexico City. Typically, people that are coming from those markets into the U.S. have typically grown accustomed to bigger cities with all the full-scale offerings that you would expect of a city like Houston or Dallas. So how do we convince them to take advantage of our short distance trip to McAllen that’s quick and accessible. This is a great draw for them. It gives us another tool in our kit to add, that we can continue to encourage that flow and movement.

“In addition to that, as we are talking to them in a difficult economic situation, it is important for them to know that they can come to McAllen at a more economic price. It is less cost to them to flying all the way to Houston or to Dallas. And everything is here that they can expect in those cities. It is less cost, we speak your language. Your friends and family are here, and we have everything you can expect from a retail offering in a first-class market.”

Suarez added: “This is a unique location, because of the diverse community, because of our geographic location, because of the diversity of our population. Because of the investment we have made in infrastructure, from academic to actual building infrastructure, investment in different sectors of our market. We will continue to see benefits, so long as we continue to work together, think in a way that is creative, and understand the challenges and be very open about some of these challenges as we face them.

“I am very positive. I deal with all kinds of markets. It is not doom and gloom when you look at it from a global perspective. Business has changed forever. We are not at a time when business is just going to be handed to us on a silver platter. We do need to be more strategic about how we recruit that business, and how we keep our tourists coming. At the end, we are going to stronger, it is not easy. We have to roll up our sleeves and work together.”

Hotel manager’s perspective

Lopez, manager of the Doubletree Suites by Hilton in McAllen, gave this report to the McAllen EDC:

“I have just been reviewing the Pulse that just came out. The report says occupancy receipts were down a sharp 27 percent. I call it a whopping 27 percent. It has been a difficult year for the hoteliers. We all know why, and September seems to have the worst month in many, many, years. October and November are trending a little bit better. December is usually good with shoppers from Mexico, so we are hoping. Airline boarding is down, bridge crossings are down. But, home sales seem very positive.”

Lopez said the McAllen Chamber is focusing its efforts on lodging, retail and border crossings. “It has been a difficult year for our members. We will see what happens in 2018.”

In a later interview with the Rio Grande Guardian, Lopez said repeated that things are difficult for area hotels right now.

“It is mainly due to the violence in Reynosa. Monterrey is a two-hour trip. People do not want to drive through Reynosa because of the security issue there. We depend on those Mexican shoppers to stay in our hotels, shop in our malls and eat in our restaurants. That is why things are way down. Occupancy was below 50 percent (in September), which is unheard of for many, many, years. And it is all because of the violence. It is not because we do not have great hotels, great restaurants and great products to sell. It is the uncertainty in Mexico. Hopefully, it improves.”

Lopez added: “The Mexican people are very resilient, but insecurity is Reynosa affecting things. It is the No. 1 issue. We depend so much on the Mexican shoppers. They have got to stay somewhere so they stay in our hotels. We can survive this by being positive. We think things will come back. We just do not know when.”

To combat the violence in Reynosa, McAllen businessman Jesus Gonzalez has recommended the City of McAllen drop its adverting campaign in Monterrey and spend the money instead on hiring private security guards to man the between Anzalduas International Bridge and the Reynosa-Monterrey autopista. McAllen Mayor Darling responded he has faith in Tamaulipas Governor Francisco Garcia Cabeza de Vaca.

In his comments to McAllen EDC, Darling said he was pleased to see FBI officials acknowledge that the problems with violence in Mexico are related to the drug habit in the United States.

“We hosted a three-day law enforcement event, with 40 law enforcement personnel from Mexico, plus FBI, Customs, the Department of Homeland Security, the mayor of Reynosa, and the governor’s staff. It was successful. It was very nice to hear the FBI understand that our drug habit fuels a lot of the cartel business. We need to work on both sides of the border in arriving at a joint solution. I think it is good step for him to say that publicly,” Darling told MEDC.