Seated at a quiet table in the Oak Court Mall food court, her purse secure on her lap, Willette Coleman lunches on salad during a work break.

She’s dining inside what was, not many years ago, the most lavish shopping mall in Memphis, an elegant building opened in 1988 on the city's prosperous east side.

In a city that depends on sales and property taxes, Oak Court and the retailers inside were like an ATM spitting out tax payments, money that helped sustain police, parks, firefighters and other public services for years.

But on a recent Friday, Coleman, an east-side worker who goes to Oak Court on lunch hour, can see the distress around her.

The Gap has closed.

Joseph A. Bank is gone.

New York & Company advertises 70-percent mark downs.

Macy’s new discount section, Backstage, touts apparel at outlet-mall prices.

And then there’s the parking.

Like many Memphians who fear parking lot bandits and mischievous teens, Coleman, 44, said she avoids the mall at night.

Can Oak Court survive?

No one knows, though Coleman senses the mall at Poplar and Perkins is inextricably tied to Macy’s massive three-story department store.

“If they leave you’ll see it decline,” she said.

East-side rebound

Despite Oak Court's turmoil, the east side has flourished.

Shopping by computer, a phenomenon known as e-commerce, has veered hordes of people out of long-standing stores.

Yet, close to the mall an empty supermarket now contains Sprouts grocery store. Laurelwood Collection is renovating. Laurelwood Shopping Center just spent $1 million on renovations. Nordstrom Rack is rising where Sears once stood.

And Oak Court has an ambitious new owner.

“The mall was a third-class citizen to a huge owner. It just wasn’t a priority with them,” said Danny Buring, a partner in the Shopping Center Group, a Memphis real estate advisor. “The new owners know the neighborhood is much nicer than the mall. Hopefully they’ll start to catch up again with the neighborhood.’’

New owner

Ever hear of Washington Prime Group?

They’re the new owner, a three-year-old company, based in Columbus, Ohio, betting money can be made on 110 unsung malls and shopping centers, the bulk of them spun off in 2014 by Simon Property Group of Indianapolis.

“Simon essentially put all its bad malls in one bucket,” said retail analyst Jan Kniffen, head of J. Rogers Kniffen Worldwide Enterprises LLC in Greenwich, Conn. “The less-strong properties wound up with Washington Prime.”

Oak Court woes trace in part, Buring suggests, to Simon's stewardship.

“If the mall could shove another kiosk in to fill an empty space they did it,’’ Buring said. “It’s the opposite of what Laurelwood (Shopping Center) has done. Laurelwood cares about one thing. Get the right tenant in. If it costs a little money to get the right tenant, they’ll do it.”

Kniffen doubts all Washington Prime malls can survive. Hundreds of malls are dead and hundreds are sick throughout the country, victims of e-commerce, flawed retail strategies, shifting millennial tastes and families struggling on stagnant wages.

“There are 1,083 malls left and I think about 40 percent of them are going to close,” Kniffen said.

Mall turmoil

So what will Washington Prime do?

It’ll most likely fit entertainment arcades and restaurants into former store space, and look for new local and regional merchants for the vacant storefronts between Dillard’s and Macy’s, the Oak Court anchor department stores.

Only a decade ago, an owner might comb through national chains and find a fresh mix of stores to put in a tired mall, like a coach sending in fresh players from the bench. Today, there is no national bench. Bankruptcies and store-closings dog a retrenching retail industry.

“Filling up empty retail space is one of the biggest challenges of our time. It’s not 1985 anymore," said site selection consultant John Boyd, head of Boyd Co. of Princeton, N.J. "You’re not going to go get Macy’s or Sears.”

Online shopping leads to less shopping in malls. That’s a reason Washington Prime’s stock price has dwindled. Shares traded Friday at $8.53, down from $18.89 three summers back, just after the company absorbed the Simon real estate.

New boss

Washington Prime chief executive Louis Conforti insists malls can survive.

“The industry has been lazy and reactive,’’ Conforti told Bloomberg News in May, eight months after he had been named CEO.

He was global strategy chief at Colony Capital LLC, a Los Angeles-area real estate investor run by billionaire Thomas Barrack, a former deputy undersecretary in President Ronald Reagan’s administration who went on to lead President Donald Trump’s inaugural committee.

Speaking to Bloomberg at the International Council of Shopping Centers convention, Conforti said: “I have never seen a greater inequity between the perception and reality than today in the retail space.”

Some investors have heeded Conforti and hung on, lured by a hefty quarterly dividend and Washington Prime’s longer-term strategy.

“The investors don’t care about the quality of the mall as much as they care about the ability of Washington Prime to manage the mall,” Kniffen said. “They’re betting they are smart enough to get rents strong enough to keep paying the dividend out of the cash flow.’’

Round One

Earlier this year, Round One Entertainment Inc., a Japanese bowling, food and karaoke chain with U.S. offices near Los Angeles, opened at a Washington Prime mall in Mentor, Ohio.

Washington Prime is expected to soon announce a significant new business will enter Oak Court. Company executives did not comment.

“You’re putting stuff like entertainment arcades, sky diving towers, bowling alleys and restaurants in the malls to attract people in hopes they’ll buy something from one of the stores on their way out,” Kniffen said. “The whole game is to get you to stay longer. It’s better (for the malls) than doing nothing.”

In the first three month of 2017, Washington Prime took in $203.4 million in revenue from tenants in its malls and shopping centers. After paying taxes, wages and expenses, the company handed stockholders $3.5 million, a payment called a dividend, and held on to $11 million as corporate profits.

Sure, $11 million looks big, but it means this: For every $1 in revenue, the company made 5 cents in profit, an amount unappealing for most investors. Computer maker Apple Inc., for example, made 21 cents on every $1 of first-quarter sales. Unless the numbers improve, Kniffen contends, malls will have to close.

“Once you get below the top 250 malls in the country, the long-term trend is negative,” Kniffen said. “You’re going to have to be very clever to sustain the cash flow and pay that dividend.’’

Suburban spread

Today, only Oak Court, the larger Galleria at Wolfchase and troubled Southland Mall remain among the city’s five big regional malls.

No doubt many east-side families would shop at Wolfchase if Oak Court closed. But many also would venture outside Memphis, spend in nearby Arlington, Bartlett, Collierville, Germantown and Southaven.

“Part of the problem is because we’re a slow-growth community with a substantial low-income population, new malls as they are developed displace the old malls,” University of Memphis economist John Gnuschke said. “The truth is we’re just spreading out our economic pie.’’

For now, spreading out favors outlying cities, particularly the upscale suburbs in Shelby County. Home to about 100,000 households, these cities have needed more tax revenue since Memphis City Schools surrendered its charter in 2011 to Shelby County.

Although the Memphis school board hoped joining Shelby County’s richer tax base would improve the school system, suburban leaders decided to create separate school districts, figuring this would maintain house values and education standards in their cities. The suburbs then cast for ways to finance the new schools. In a state that bars income taxes, sales taxes offer a quick way to grow tax revenue, particularly if homeowners resist higher property taxes.

One shopping center opening or closing can’t make or break a city’s budget. But it can have an impact. For example, developers of the proposed $200 million Germantown Town Center project businesses in their center would provide Germantown $100 million in sales tax revenue over 30 years. This averages $3.3 million per year.

Mall of Memphis

Coleman knows the sprawling Mall of Memphis where she shopped as a girl has been razed.

She knows Macy’s already has closed at Southtown Mall.

She’s seen kiosks fill the Oak Court aisles and youth-related retailers fill old stores with athletic brands like Nike and Jordan.

“That plays to the black community,” Coleman said. “They think they’re giving us what we want. I don’t think it’s true. I have two boys and I’m not buying much of this.”

Reports of mall disturbances light up social media

Neighborhoods in the four Zip Codes nearest Oak Court contain about 45,000 households with an average annual income of almost $89,000, or about $4 billion in total per year, the 2015 U.S. Census shows.

She’d like to see better stores come in, and fears if the mall ever closes, it will be taken not as a signal the mall owners misfired, but a sign of east-side malaise.

“It’s people in the area that keep the malls afloat,” she said. “If they see it close and get tired of fighting the crime, and they start moving out, this area’ll go down.”

East Memphis pride

Cory Prewitt isn’t so sure East Memphis’ fortunes rest on Oak Court.

“I don’t think any one property defines us” on the east side, said Prewitt, chief operating officer of Laurelwood Shopping Center, which his family developed in 1958.

“They are a competitor and I don’t want them to go away,” Prewitt said. “I would much rather have them thriving than what is happening right now.’’

Laurelwood renovating, adding stores

In Zip Code 38117, the Poplar Corridor area that includes Oak Court and Laurelwood Shopping Center across the street, 51 retailers recorded annual sales over $1 million, the 2015 U.S. Census shows.

While the mall's chain stores have struggled, Laurelwood counts one vacant store among its upscale merchants, many of them owned locally, such as 87-year-old Joseph Stores, a destination offering fashionable $300 women's shoes.

“There’s been a lot of crime over at Oak Court Mall, but that doesn’t make me want to move. We are part of Memphis,” said Barrie Wexner Wurzburg, president of Joseph owner Wexner Companies Inc.

“We have very loyal customers," Wurzburg said. "We have such a heritage. Grandmothers shop here, and their daughters, and their daughters. Our customer doesn’t want to go in the mall. She wants to park her car and come in here and it’s easy. You come in here, you get an experience.”

'Harness our talent'

It’s tempting to say it’s become a black mall and a white shopping center, although that’s wide of the mark. The divide reflects income levels.

People of all colors are seen parking Audis, Cadillacs and Mercedes outside Macy’s, Dillard’s and Joseph, although Oak Court owner Simon might have skewed the mall in favor of younger Memphians.

If so, Washington Prime can refocus around merchants relevant to middle-income families, particularly those in their 20s and 30s starting out at a time when American incomes are stagnant.

‘’It seems like incomes are not necessarily in tow with quality-of-life costs,” said Laurelwood’s Prewitt, noting East Memphis seems less wealthy than it once did. “That’s going to become an issue (throughout Memphis). We need to make sure we harness our young talent.”

Affordable stores and services aimed at young families can help the mall flourish again.

What happens next is up to a distant company in Ohio.

“If it changes purpose and improves the quantity and quality of shopping including security,’’ said U of M’s Gnuschke by email, “the revisions will have a positive impact on the area. If it is torn down and the property reworked, it could again be positive if the property is upgraded. If the property is left to continue a steady erosion, the declines will have a negative impact on the surrounding area.”

Ted Evanoff, business columnist of The Commercial Appeal, can be reached at evanoff@commercialappeal.com and (901) 529-2292.