Trend-Setters

It’s open season.

Open air, that is. When it comes to new mixed-used developments with a core retail element, expect more and more of those shops to be out of doors in a layout and design that conveys “Main Street.”

Brian Sciera, VP of lifestyle centers for W/S Development of Chestnut Hill, Mass., describes movement as “going fresh. It’s based on customer demand.”

Several mixed-use projects now in the works are tapping successful elements from existing lifestyle centers, such as upscale grocery stores and movie theaters, in settings flavored with green patches and quaint streets like those first seen in projects such as the Easton Town Center in Columbus, Ohio. At the same time, some established enclosed malls are turning entire sections inside out to present an outdoor face, while adding in entertainment features and common areas.

“As malls age and people’s shopping patterns change, the malls are starting to change,” noted Greg Maloney, president and CEO of Atlanta-based Jones Lang LaSalle (JLL) Retail. “In the ’70s and ’80s they were basically fortresses. The strategy was not to show them anything’ for we wanted to pull them [shoppers] and trap them inside. That philosophy has changed, and it is a wonderful change.”

An example is Rosedale Mall in Roseville, Minn., a property managed by JLL. When the Mervyn’s department store closed, it was knocked down and replaced with a two-story lifestyle section with restaurants and a theater on level two, with retailers including Talbots and Ann Taylor on level one.

To address the distinct needs of this segment, JLL created a new open-air division in April. By year-end, Maloney expects to have 100 additional open-air properties under contract to lease and/or manage. “There was no one doing this on a national basis,” said Maloney.

Meanwhile at W/S Development, a better-than-expected performance from the three-year-old, 430,000-sq.-ft. Derby Street Shoppes project in Hingham, Mass., spurred the firm to launch several similar centers in and around Boston. Legacy Place in Dedham, Mass. is a 735,000-sq-ft. lifestyle center slated to open in fall 2008 and offers retail, restaurants and a theater. Meadow Walk at Lynnfield combines 395,000 sq. ft. of retail and restaurants with 180 luxury residential units and 80,000 sq. ft. of office space.

Then there is Nashua Landing, a 600,000-sq.-ft. lifestyle center in Nashua, N.H., located in a region considered an extension of the Boston market. Inside Boston itself, W/S is developing the 1.5 million-sq.-ft. retail and entertainment portion of the Seaport Square project that is proximate to the new convention center.

So bullish is W/S’s Sciera on the outdoor concept that, à la David Letterman, he hands out to potential tenants a “Top 10” list of reasons to “Go Fresh in Boston.”

Adding lifestyle: Executives at Cafaro Co. of Youngstown, Ohio, are enthusiastic about the transformation of an existing enclosed mall into the Spotsylvania Towne Center. Located in Fredricksburg, Va., this once-rural area is morphing into a bedroom community for Washington, D.C., commuters and a comfortable place for government retirees, explained Anthony Cafaro Jr., a company VP. As a result, the community’s needs are changing.

The renaissance of the shopping center began with a complete makeover of the interior and now, besides anchors J.C. Penney, Sears, Macy’s and Belk, it is the first mall to boast a Costco warehouse club as a cornerstone.

The second phase, now under way, is the creation of an additional 250,000 sq. ft. of retail and entertainment space that will take shape as an outdoor lifestyle center, connected to the original piece through a pedestrian walkway that will enter through the food court. Scheduled to open in fall 2008, the outside portion will add new retailers, sit-down restaurants and an upscale theater featuring valet parking, waiter service and exclusive film screenings.

“The layout is a combination of streetscape with cars being able to park in front, and large pedestrian areas,” said Cafaro. “We see the outside portion as being very synergistic and complementing the interior mall.”

Cafaro has a long history in developing and managing enclosed malls, and the Spotsylvania project is its first major outdoor enterprise. It also has plans to renovate the Millcreek Mall in Erie, Pa., giving it a 50,000-sq.-ft. storefront section facing the parking lot.

But these projects do not signal a seismic shift at the company, stressed Cafaro Jr. “The enclosed malls are still very viable and we are not abandoning that by any stretch of the imagination.”

Filling in the gaps: Among the current projects of The Garrett Group, Temecula, Calif., are The Golden Triangle in Murrieta, Calif., and Garrett Ranch in Hemet, Calif. Both are situated in fast-growing Riverside County and have been designed to become centerpieces of each community by offering multiple components.

The Golden Triangle is a 1.3 million-sq.-ft. property encompassing retail, restaurants, entertainment, hotel, office space, a fitness center and, as requested by town officials, a conference facility. It is expected to debut in the fall of 2009.

Kirk Wright, CEO of Garrett, said the site helps fill in what is lacking in retail and restaurant offerings in the region. “There is no Chico’s, no Coldwater Creek and no P.F. Chang’s or Cheesecake Factory,” said Wright, adding that all of the mentioned are in discussion.

Meanwhile, the Garrett Ranch project, set on a 200-acre site owned by Garrett chairman Paul Garrett for 30 years, is being embraced as his family’s legacy to the city. It will provide housing, office space, a shopping area combining department stores with specialty boutiques, entertainment, as well as an adjacent shopping section with big-box retailers. The atmosphere of Garrett Ranch will impart an international feel with hints of Spanish design.

“There is pent-up demand here for a high-level shopping experience, so that is what we are going to provide,” said John Potts, VP of real estate for Garrett. “We are trying to develop a more sustainable format. The jobs and housing elements give this a balance.” Groundbreaking is expected early next year.

Refining mixed use: Chicago-based McCaffrey Interests is pushing full steam ahead on its own brand of mixed-used developments.

Its Market Common project in Myrtle Beach, N.C., is preparing to open in April 2008. It is the center of a 122-acre Air Force base redevelopment. Clayton McCaffery, VP of leasing, calls it the “grown up and new and improved” version of its Market Common, Clarendon, an award-winning mixed-use project.

Myrtle Beach, the larger sister, will weigh in with 400,000 sq. ft. of retail space in Phase 1, with 200,000 sq. ft. of rental apartments above the stores. Additionally there will be 1,500 row homes and townhomes, along with 40,000 sq. ft. of office space. Phase 2 will layer on another 200,000 sq. ft. of retail.

“It is positioned to offer an adult shopping experience,” said McCaffery. “We have made a conscious effort to focus on a more refined environment.” Rather than appealing to the tourist crowd. “We are focusing on enticing the permanent population.”

But there is much more from McCaffery. In Chicago, the firm is taking mixed use to a new level with its Market Common South Shore project. Set on Lake Michigan, it is essentially a city-within-a-city with schools, a 1,000-boat marina, 10,000 new homes and 700,000 sq. ft. to 1 million sq. ft. of retail. South Shore Drive and Lake Shore Drive will be extended through the complex, with roadwork beginning as early as September.

McCaffery is exuberant about the project. “How often do you get to redevelop 530 acres of lakefront property in one of the biggest cities in North America?”

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