To be competitive, especially in an economy where being competitive is the name of the game, power centers are being forced to up the amenity and atmosphere antes, or face assured vacancies.
The format that traditionally featured a series of big-box retailers in a sizeable strip has given way to an open-air, amenity-rich shopping center that combines the expected power retailers with a lineup of lifestyle tenants and restaurants.
The result is a powered-up version of a power center that is finding a surprising degree of success even when times are tough.
Case in point: Front Range Village in Fort Collins, Colo.
The 900,000-sq.-ft. hybrid power center, developed by Birmingham, Ala.-based Bayer Properties, is located on 110 acres in the heart of the northern Colorado market of Fort Collins, at the intersection of Harmony and Zeigler Roads just west of Interstate 25. Opened in July 2008, the project is anchored by SuperTarget, Lowe’s, Staples, Sports Authority, DSW and a joint Toys “R” Us and Babies “R” Us format. Of the 900,000 sq. ft. total, 645,000 sq. ft. is big-box retail along with junior anchors and surrounding retail and restaurants; 175,000 sq. ft. is Main Street specialty retail, restaurants and a library; and nearly 80,000 sq. ft. is office space.
The library—a 10,000-sq.-ft. branch of the Fort Collins Library System—is slated to open at the end of March. “The library and the office space will both add further synergy to the site,” said David Silverstein, principal of Bayer Properties. The office space is currently leasing, with some of the space coming on line in summer 2009 or sooner.
Components such as office and civic uses have been shown to add measurable pull to a shopping center, but Front Range Village has managed to find a high degree of draw prior to the opening of the added uses. The property, said Silverstein, generated the highest store-opening sales in the country for SuperTarget and Sports Authority, and Toys “R” Us/Babies “R” Us and DSW both exceeded plan by double-digit margins.
“The SuperTarget at Front Range Village continues to exceed sales plan driven by a strong initial opening, good customer traffic during the fall and steady traffic during the holiday season,” said SuperTarget team leader Tyson Buhre. “The location and shopping environment at Front Range Village have been instrumental in SuperTarget’s success.” SuperTarget had the highest sales in the nation out of 43 store openings in the same time period in July 2008, and Sports Authority had top sales compared to 11 other stores.
That is weighty testament in today’s downturn. When retailers in every corner of the country are struggling to stay afloat, a success story can elevate belief that the right format in the right location still can work.
“The site is terrific, as Fort Collins has been the retail hub of northern Colorado for years,” said Silverstein. “But there is more to Fort Collins than its retail offerings.” The community of 290,000 people has been named one of the best places to raise kids and, in 2006, as the No. 1 place to live in the United States. The metropolitan statistical area is the second-fastest expanding market in the state of Colorado.
“In short, the center’s success can be attributed to three things,” said Silverstein. “First, to the market itself; second, to the center’s location within the market; and, third, to the fact that we have been able to expand certain concepts such as the 175,000-sq.-ft. SuperTarget, which had a smaller, non-superstore elsewhere in Fort Collins; and the 45,000-sq.-ft. Sports Authority, which also had a smaller facility in town.”In Search of Retail
As retailers cut back on expansion nationwide, it is becoming all the more important for an under-retailed city to reach out and grab tenant attention. Just ask the City of Hesperia.
Hesperia, Calif., wants more retail. In fact, it is the city’s goal to become the retail capital in San Bernardino Capital’s Inland Empire North. “We’d love to be that,” said Steven J. Lantsberger, City of Hesperia’s economic development director. “We now have to deal with the [struggling] economy and, as such, our dream may take a little longer to capture than perhaps it would have a couple of years ago.”
Up until the early 2000s, Hesperia’s demographics couldn’t command much retail or restaurant attention. But now, said Lantsberger, that has changed. “As the city grows out population-wise, it will be the largest city in the High Desert.”
To better match the retail offerings with the growing population, Lantsberger and his economic team have devised a series of incentive programs designed to motivate businesses to include Hesperia in their expansion plans. Three on-the-shelf programs include brokers’ incentives, a franchise incentive program and restaurant rewards, but customization is available as well.
“We have other means and sources of assistance available that are tailored on a case-by-case basis,” said Lantsberger. “We try to be fluid and dynamic so we can flex to the needs of the business.”
Hesperia’s ability to flex and bend has led directly to the construction of a new community/power center anchored by SuperTarget. The 363,000-sq.-ft. center, named High Desert Gateway, was developed by Upland, Calif.-based Lewis Retail Centers and is located at Interstate 15 and Main Street.
“Collaborating with the City of Hesperia on the High Desert Gateway project has been an excellent experience,” said Randall Lewis, executive VP of Lewis Retail Centers. “In addition to our great working relationship with the city, they have also proven to be extremely pro-active and very accessible and eager to work with prospective retailers and brokers.”
That, it turned out, was key to attracting SuperTarget. According to Lantsberger, there was significant negotiation among Lewis, Target and the agency and city to fine-tune an assistance package that was going to make the project viable. “This was the first major retail project in that quadrant of the city,” said Lantsberger, “and while I can’t provide specific details about the assistance package, suffice it to say that there was a package ultimately approved for Lewis for this project.”
Sprouts Farmer’s Market will join the center with a late-spring or early-summer 2009 opening, building its home in a project filled with unlikely power-center amenities—fountains, sculptures, green space, lush landscaping and an attractive Main Street, making Front Range Village a center of which the city and its residents can be proud.
“It’s important to recognize Fort Collins’ willingness to work with us on a public/private partnership,” said Silverstein. “The project wouldn’t have happened without the city’s cooperation.”