Decline and closure
By 2008, two of the mall's seven retail sectors were closed. Press reports described the mall as "in decline" and that the mall was "likely to be demolished in 2010" to make way for a mixed-used development.[7]
On June 26, 2009, Yahoo! reported that it was one of "America's Most Endangered Malls": "While gleaming new stores have been springing up in some parts of Austin, this 38-year-old mall along I-35 has struggled to keep stores open--and avoid embarrassing controversies. Anchor JCPenney left in 2006, and this year Dillard's sued the mall's owners, claiming they let the mall become a ghost town. The owners countersued, claiming that the suit is part of a scheme to help Dillard's get out of its lease early."
As Austin grew and expanded in the years since Highland Mall's opening, the demographics of the surrounding neighborhoods, once considered somewhat upscale, remained stagnant; the mall is the closest major regional shopping center serving the eastern portion of the city, which has traditionally been populated primarily by working-class African American residents. Highland Mall had developed a reputation for large crowds of visitors to the mall during the Texas Relays (a major track and field event held at the University of Texas at Austin), generating controversy and allegations of racial discrimination, or at the least, a less-than-welcoming attitude, on the part of mall management towards the visitors, mainly younger African Americans, many who visit from out-of-state.[9] During the 2009 Texas Relays, management decided to close the mall several hours earlier than normal, presumably in an attempt to control the crowds and promote safety, prompting protests from the local chapter of the NAACP and a possible boycott of the mall (all part of a larger controversy over perceived negative attitudes in Austin towards the Texas Relays and its largely younger Black fan base, which uses the Relays as a social event comparable to the controversial Freaknik events in Atlanta in the early 2000s).[10]
Charles Heimsath, president of an Austin-based real estate research firm, suggested that local malls such as Barton Creek Square and The Domain siphoned off clientele from Highland Mall.[11] Despite Highland Mall's relative proximity and convenience to the University of Texas at Austin, many UT students elect to use these other shopping venues.
On June 3, 2009, the Austin Chronicle reported that Austin's professional soccer team, the Austin Aztex, were interested in using part of the site for a soccer stadium.[12] The site would have also included "pedestrian-friendly street frontage in a mixed-use design, rapid bus transit and rail right across the street, and structured parking." Grassroots Austin Stadium Supporters (GRASS) was a group that has formed to push for the stadium project.[13]
In January 2012, GGP spun off 30 underperforming properties, including Highland Mall, into a new company called Rouse Properties.[14]
On September 1, 2012, Rouse filed for bankruptcy.[15]
On April 30, 2015, Highland Mall officially closed after 44 business years. The adjacent retail spaces remained operated by Rouse Properties until July 2016, when the firm was acquired by Brookfield Asset Management. Jones Lang LaSalle also handles operations of the retail spaces.[16]
Acquisition by ACC
In 2012, Austin Community College purchased Highland Mall to redevelop the site as a regional education center. The first phase of ACC's Highland Campus opened in Fall 2014. The first phase includes classrooms, labs, study areas, library and media center, student commons, and ACCelerator, a 600-station learning lab for individualized instruction through technology.[17][18]
Preparation is underway for additional redevelopment at Highland Mall. Plans call for a digital and creative media cluster, expanded information technology programs, culinary and hospitality center, professional incubator space, an advanced manufacturing center, workforce innovation center, and regional health sciences center with simulator lab.[19]
In 2017, Rackspace announced plans to open an office in the former Dillard's anchor space, but plans were shelved when the company was acquired by an outside investor.[20] In 2018, it was announced that the former Dillard's store would be remodeled into a two-level television studio that will house Austin PBS affiliate KLRU
