Woodbury Common agrees to drop New York trade restrictions
Simon Property Group has agreed to a settlement with the office of New York State Attorney General Eric T. Schneiderman that will have it loosening its stranglehold on the outlet business in Metropolitan New York.
Schneiderman maintained that Simon’s Woodbury Common outlet center in the Hudson River Valley owned a virtual monopoly in the region — including New York City — by virtue of a clause in tenant leases that forbid the opening other outlet stores within a 60-mile radius.
“No business should be allowed to stifle an entire industry at the expense of the consumer, but for years, that's exactly what Simon Property Group did to New Yorkers,” Schneiderman said. “Simon's anticompetitive conduct blocked competition and drove up prices for New York consumers.”
Simon will pay New York State $945,000, revise existing leases to remove the radius restrictions, and cease employing radius restrictions or other exclusionary tactics that might deter Woodbury tenants from opening additional outlet stores.
The settlement is welcome news for Staten Island developer Joseph Ferrara and his BFC partners, whose Empire Outlets NYC are under construction and set to bring luxury outlet stores to New York City in 2018. Brands signed to lease space at the 1.1 million-sq.-ft. development near the Staten Island Ferry terminal include Nordstrom Rack, Banana Republic, Francesca’s Collection, and Columbia Sporting Goods. But this week’s news should quickly add more names to the list, according to Casandra Properties’ James Prendanamo, who directs leasing for Empire Outlets.
Asked if the settlement expanded the prospective tenant pool, Prendamo replied, “We were looking at a tenant pool that was 10 Olympic-sized pools, then it shrunk to four, and now it’s back to 10 again.”
In a statement, Simon Premium Outlets argued that the radius restriction was lawful, having been in use since 1985, long before Simon acquired the center from Chelsea Property Group. The company decided to settle, however, since Schneiderman’s investigation had become “an unnecessary distraction.”
“Simon has never sought to limit competition. It regularly granted exceptions to radius provisions and understands the importance of competition and consumer choice in the market,” Simons stated. “While we do not agree with the suggested findings, the settlement has favorable terms for Woodbury Common and will permit Woodbury Common to focus on providing tenants and shoppers the type of premium experience they seek.”
Old Navy joins historic makeover in Michigan
Presidential candidate John F. Kennedy delivered a stump speech there not long after it opened in 1960. Legions of thriving General Motors employees kept it thriving for decades. But Tech Plaza in Warren, Michigan, suffered a crushing blow when Walmart left in 2008, and the center was nearly vacant when Detroit-based Petzold Enterprises acquired it in 2014.
Tom Petzold’s lured back Walmart that same year, and his company has since rebuilt Tech Plaza into a going concern, adding Marshals, DWS, Carters/OshKosh, Five Below, and Ulta in ensuing years. This week, Old Navy signed multi-year lease at the center.
“We sought to make the center as upscale and modern as possible,” said Petzold, the company’s president. “Old Navy is the ideal complement to our other marquee stores that will truly help reestablish the Tech Plaza as a viable shopping destination.”
To assist in the makeover, Petzold assembled a project team made up f local companies: Tiseo Architects from Livonia, design firm R. Berlin and Associates from Northville, and NCS Construction Services of Bloomfield Hills. The team delivered 118,000 sq. ft. of retail space to the market over the past 12 months, and has leased 73,600 sq. ft. to 11 stores, many unique to the city of Warren.
Center changes hands in ‘fast-growing’ Folsom
Citing favorable demographics and a steady income stream, Nazareth Enterprises acquired the Walmart Central Shopping Center in Folsom, California for $39.7 million.
Besides Walmart, the 139,377-sq.-ft. center contains a 24-hour Fitness SuperSport Gym, the 99Cent Store, and Great Clips. It’s shadow-anchored by a Super Walmart.
“Folsom is a fast-growing city with a substantial median income," said Mounir Kardosh, CEO of Nazareth. "The center’s tenant mix supports the needs of its affluent neighbors and we are confident that we will fill the few vacancies with likewise upscale tenants.”
The purchase put Nazareth over the $100 million mark in acquisitions in third quarter. It was represented in the transaction by Landmark Real Estate Services. Marcus & Millichap represented the seller, a private investor.