COVER STORY, APRIL 2007

A STEP AHEAD OF THE COMPETITION
Tri-Land Properties and Alberta Development Partners tap into Kansas City’s established markets through retail redevelopment.
Amy Bigley

As many developers look to high-growth areas for retail opportunities, Westchester, Ill.-based Tri-Land Properties and Greenwood Village, Colo.-based Alberta Development Partners have focused their efforts on redevelopment and revitalization in various areas of the metropolitan Kansas City market.

“To a certain extent, Kansas City has perhaps gone under the radar from the more national scene,” explains Hugh Robinson, executive vice president of Tri-Land. “There are a lot of [developers] chasing the high-profile properties — the power center or lifestyle centers — and not really focusing on older assets.” Although Tri-Land continues to construct ground-up projects, the company focuses much of its efforts on repositioning and renovating neglected shopping centers in established markets.

Richard Dube, president of Tri-Land, explains that his company looks for areas that are undersold or overlooked. “While Kansas City has had a lot of new developments in high-growth markets, there has not been much interest in the established markets with existing 10 to 20-acre, 100,000 to 200,000-square-foot centers.”

Alberta Development Partners is creating The Streets of Metcalf, an open-air center that will replace an existing enclosed mall.

Alberta Development Partners has entered the Kansas City market for many of the same reasons. The company is currently redeveloping two older enclosed malls into The Streets at Metcalf in Overland Park, Kansas, and The Streets at Barrytowne in Kansas City, Missouri.

“Typically, existing shopping centers are located in areas with strong demographics and tend to have a very loyal customer base,” says Bryan McFarland, principal of development at Alberta Development Partners. “While shoppers might not visit the older centers as often, there remains a strong emotional connection with the property and customers are interested in seeing the center re-energized.”

Tri-Land’s strategy of looking for older, tired centers with some vacancy, which can be acquired at a price that is significantly below replacement costs, helps keep the company competitive in the market. “These projects, which are so well located in high population density and medium-to-low rental environments, are attractive to most chain and independent tenants that are looking for a stable project,” Dube explains.

In Overland Park, Kansas — just south of Kansas City — Tri-Land Properties is redeveloping and modernizing Cherokee South Plaza.

Tri-Land is currently redeveloping Blue Springs Market in Blue Springs, Missouri; Brywood Centre in Kansas City, Missouri; Cherokee South Plaza in Overland Park, Kansas; Devonshire Village in Olathe, Kansas; and Ten Quivira Plaza in Shawnee, Kansas.

Dube notes that the communities in which Tri-Land redevelopments are located have been very cooperative and anxious about the projects. “The communities have properties on their hands that have been operating poorly or not at all — some are abandoned buildings — so they are anxious to assist us with some form of government entitlement,” he says. All five of the company’s Kansas City developments are located in TIF districts.

Although the communities are usually very cooperative in the redevelopment process, McFarland notes that the greatest challenge in redeveloping is the coordination involved with the existing department stores. “Typically, the stores own their building and ground, and any proposed new development requires their approval,” McFarland says. The company reached common ground with Macy’s and Sears in its development of The Streets at Metcalf, both stores will receive new building exteriors and site improvements.

Another advantage of redevelopment versus new build is the minimal site work required for the development. McFarland explains that much of the earthwork has already been done, the utilities have been delivered and access to the property has been established. “The benefit of the local customer base and the strong demographics, coupled with brand recognition are also advantages for a redevelopment project,” he adds.

As for competition, “There’s always that potential, but once a center is redeveloped and repositioned it is hard for competition to come in because everything is developed around the center,” Dube explains. “It’s not like a growth market where you build a new Lowe’s Home Improvement Warehouse and a Target, and across the street someone else builds another development.” Robinson adds that the redevelopment projects are usually situated in densely populated areas providing a ready-made market, which is not necessarily dependent on residential growth.

Both companies, which have made significant commitments to the Kansas City market, are looking to tap into an undervalued market and create successful projects that will benefit the surrounding communities. “We hope to create successful retail projects out of the current centers that are [underperforming]; the projects will give back to the community by creating jobs, increasing tax revenues and offering a contemporary retail environment for the community,” Dube says.

TRI-LAND PROPERTIES — Retail Redevelopment Projects Brywood Centre Kansas City, Missouri Brywood Centre Tri-Land acquired Brywood Centre, a 208,234-square-foot retail center located at the intersection of 63rd Street and Blue Ridge Cut-Off in Kansas City, in May of last year with the intent to repositioning the center. Redevelopment plans for the center, which is anchored by a high-volume Price Chopper, will include high-intensity parking lot lighting, a new building façade, new building and site signage, and high-impact landscaping. The plans also call for an expansion of the existing Price Chopper. The regional neighborhood center is easily accessible by Interstate 435, 63rd Street, Blue Ridge Cut-Off and Highway 350. Blue Springs Market Blue Springs, Missouri Blue Springs Market Tri-Land recently acquired the former Kmart property located at the northeast corner of U.S. Highway 40 and Missouri State Route 7 in Blue Springs. The company plans to redevelop the property into Blue Springs Market, which will share a parking lot with a high-volume, 60,000-square-foot HyVee supermarket. Tri-Land has two plans for redeveloping the property — one plan calls for subdividing the current building into a 50,000 and 20,000-square-foot anchor spaces, and 10,000 square feet of small shop space. The second plan is to reposition the property as a single-tenant family department store. Other renovation plans include high-intensity lighting, high-impact landscaping, and building and site signage upgrades, as well as improvements to the façade and roof. Cherokee South Plaza Overland Park, Kansas Acquired in 2004, Cherokee South Plaza is a 118,000-square-foot retail center located at the southwest corner of 95th Street and Antioch Road in Overland Park. The neighborhood center is surrounded by a population of 98,432 people and situated at highly trafficked area in Johnson County. Redevelopment plans for the 1980s-era strip center include a new building façade, repaved parking lot, new building and site signage, high-impact landscaping and high-intensity lighting. The relocation of two tenants will help to transform Cherokee South to a more contemporary neighborhood retail center by incorporating a gathering place concept featuring greenery, customer walk-ways and patios. Two New York Stock Exchange retailers will anchor the revitalized center.

Alberta Development Partners — Retail Redevelopment projects The Streets at Metcalf Overland Park, Kansas Alberta Development Partners is redeveloping Metcalf South, an older, enclosed mall, into a 1.1 million-square-foot mixed-use development in Overland Park. The 50-acre, open-air project will feature 900,000 square feet of retail space, 174,000 square feet of office space and an undetermined amount of residential units. The retail component will feature upscale boutiques, national and local shops, and an entertainment complex. The center will also feature office and residential space, as well as a hotel. Given the company’s two area developments’ current vacancy rates, McFarland believes construction will first begin on Metcalf first. The Streets at Barrytowne Kansas City, Missouri The Streets at Barrytowne Alberta is also redeveloping the Metro North mall into The Streets at Barrytowne, an open-air mixed-use center located in Kansas City’s Northlands area. Situated on a 106-acre site, the center will feature 1 million square feet of retail and office space, as well as residential units. “Both sites have high traffic and visibility with a built-in customer base,” notes Bryan McFarland, principal of development at Alberta. “The open-air concept has been embraced by shoppers across the country, as it delivers an authentic experience for the entire family.” The center will also feature outdoor space, including a town square, a clock tower and a picnic area.

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