The Expansion of Gran Sur Shopping Center: Urban and Environmental Controversies in Mexico City

In Mexico City, the Gran Sur shopping center in Coyoacan has been at the center of urban and environmental controversy following a series of government decisions that allowed its construction in the late 1990s and its subsequent expansion amid the COVID-19 pandemic.

According to SiiLA data, Gran Sur encompasses a built area of approximately 143,000 square meters on a property exceeding 110,000 square meters. This mall houses 116 retail spaces, 108 of which are occupied, and was expanded despite a series of legal irregularities dating back 25 years.

Recently, the Secretariat of Urban Development and Housing (SEDUVI) reported that in 2022, it authorized a significant expansion of 43,900 square meters for Promotora Mar y Cielo, the company managing the shopping center, under an agreement aimed at revitalizing the economy by constructing on major city arteries.

This agreement, established in 2021, was intended to facilitate projects that would promote economic development in response to the challenges posed by the pandemic. However, despite the intentions of economic revitalization, the implementation has been fraught with irregularities and oversights that raise questions about the management and supervision of these policies.

Promotora Mar y Cielo was required to meet various conditions, including environmental mitigation and urban integration measures, within a specified timeframe. However, they failed to meet the necessary environmental requirements, leading SEDUVI to cancel the registration of the Facilities Agreement in April 2023. Consequently, the Secretariat of the Environment (SEDEMA) imposed a fine of over 5.2 million pesos (nearly 300,000 dollars) for the environmental damage caused, underlining the severity of the situation and the urgent need for compliance.

The shopping center's expansion has also revealed inadequate oversight in earlier development stages of Gran Sur. According to SEDUVI, since the company has not complied with various regulatory requirements dating from 1999, "the process is under thorough review."

National media and official documents reveal that the irregularities related to the Gran Sur shopping center include 18,000 square meters built without the necessary permits and the failure to fulfill an agreement to donate 10% of the property for city reserve land for over two decades. These serious legal shortcomings, along with the unregulated expansion, reflect a range of challenges in urban and territorial development management that need immediate attention.

In addition to these irregularities, the Gran Sur expansion project has also encountered significant issues documented by the Environmental and Urban Order Attorney's Office (PAOT), including exceeding the construction limits set in 1997 and failing to comply with regulatory free zones. According to PAOT investigations initiated by neighborhood complaints, the project overstated the size of the land, leading to the inappropriate use of allowed densities. The development, conducted in two phases, involved demolishing structures in the parking area to build a new storage space and expanding the core of the shopping center to add new retail spaces and offices. This process also included violations of environmental impact regulations, illegal tree felling on the site, and unauthorized additional constructions in the adjacent residential complex.

The situation at Gran Sur not only illustrates the difficulties of implementing development policies under exceptional circumstances like a pandemic but also highlights the pressing need for a more rigorous and transparent framework by the authorities. The failure to adhere to basic construction and environmental standards endangers not just the legality of the projects but also the urban and environmental well-being of the city, emphasizing the crucial role of transparent governance in urban development.

For more information on this and other topics related to Mexico's commercial real estate market, explore SiiLA REsource or contact us at contacto@siila.com.mx.