RETAIL SUCCESS THROUGH DIVERSITY
In 2004, developers are building retail projects that have various and specific focuses.
Chris Thorn

The retail market is seeing a lot of activity in 2004 in the Midwest. The retail projects under development are diverse and include the renovation of one of America’s first enclosed malls and the development of a major regional entertainment and retail destination.

In Algonquin, Illinois, Cincinnati-based Jeffrey R. Anderson Real Estate is developing Algonquin Commons. The $80 million project, which is located on the southwest corner of Randall and County Line roads, will feature a 420,000-square-foot lifestyle center and a 200,000-square-foot power center. “There are no fashion offerings that are better within 15 miles of our site,” says Mark Fallon, director of real estate with Anderson. “Also, most of our tenants are first to the market.” Tenants in the project include Old Navy, Galyan’s Trading Company, Abercrombie & Fitch, American Eagle, Ann Taylor Loft, White House/Black Market, Coldwater Creek, J. Jill, Victoria’s Secret, Talbots, Jos. A Bank, Bombay/Bombay Kids and Aveda Salon. The developers are targeting women and families seeking fashion for their homes and themselves.

Algonquin is a high growth area with annual retail expenditures increasing in excess of 20 percent, Fallon says. “This center will follow the huge success of its sister lifestyle center, Geneva Commons, 20 miles to the south.” The center was designed by Schaumburg, Ill.-based Legat Architects and is being built by the Lisle, Illinois, office of Duke Construction. Opening day is currently scheduled for October.

Highland Park, Ill.-based Tucker Development Corporation is currently developing Central Parkway, a 65,000-square-foot retail and office building in downtown Highland Park.

To the east of Algonquin, in the North Shore suburbs, Tucker Development Corporation (TDC) is developing Central Parkway. This 65,000-square-foot retail development is located on Central Avenue in downtown Highland Park.

“The area is a vibrant, upscale community, and the market offers very few vacancies for retailers,” says Richard Tucker, president and CEO of Highland Park-based TDC. “Even though it already has a tremendous mix of retail shops, downtown lacks an upscale health club.” To fill this void, Equinox, a fitness club, is leasing 30,000 square feet of space as the anchor tenant in Central Avenue. TDC will move its corporate headquarters into 7,500 square feet of office space in the project, and the company has also leased 7,000 square feet of space to Fifth Third Bank. The remainder of the project includes 16,000 square feet of retail space, 5,000 square feet of office space and 220 on-site parking spaces. HKM Architects designed the project and Power Construction is the general contractor. Equinox is opening this month, and the balance of the project will open in March.

In Evergreen Park, a southern suburb of Chicago, The Plaza is undergoing major renovations. The Plaza, owned and managed by The Provo Group of Companies, is a 51-year-old, 1.2 million-square-foot enclosed mall that is anchored by a 240,000-square-foot Carson Pirie Scott & Company and a 36,000-square-foot Circuit City.

One of the most substantial changes involved the demolition of an existing parking deck and the creation of an 11-acre, 1,100-space surface parking lot. The new lot, with improved lighting and new bus stops and traffic lanes, was completed last fall. Other new exterior renovations include the remodeling of the mall’s main entrance, enhanced signage, wider sidewalks, new sitting areas, approximately 300 new trees and the widening of the Campbell Avenue entrance.

New retailers in the mall include Chernin’s Shoe Outlet, Before Baby & Beyond, BOGO’s, Hot Stuff, US Cellular, Daddy & Me and Details for Men. Applebee’s Neighborhood Bar & Grill also opened a new location in the mall’s north parking lot.

RED Development is currently working on The Legends, a major retail and entertainment destination located in Village West in Kansas City, Kansas.

Two other states experiencing a high volume of retail development are Kansas and Missouri. RED Development, based in Scottsdale, Arizona, and Kansas City, Missouri, is currently working on two projects expected to make major impacts in their respective communities. In Kansas City, Kansas, RED is developing The Legends, a major retail, restaurant and entertainment project. The Legends will be another destination in Village West, which includes Cabela’s, Nebraska Furniture Mart, Great Wolf Lodge and Kansas NASCAR Speedway. The project will be built simultaneously as two phases (804,000 square feet and 400,000 to 600,000 square feet). RED is still finalizing the tenant mix and expects to make an official announcement this spring, but prospective tenants include fashion and branded retailers, a department store, hard and soft goods, interactive attractions and museums, movie theaters, restaurants and live entertainment. RED expects that some tenants will be new to the market, the Midwest and even the United States.

“Village West is a one-of-a-kind destination,” says John Bacon, director of communications for RED Development. “The Legends sits at the epicenter of this regional shopping, dining and entertainment district that is drawing visitors from hundreds of miles away.” The $200 million development will target visitors within 1 day’s drive or visitors spending the weekend at Village West.

If the other projects in Village West are any indication, RED expects The Legends to be a success. “Wyandotte County, Kansas, has little retail beyond Village West,” Bacon says. “Cabela’s and Nebraska Furniture Mart are both exceeding sales projections, proving the viability of the market.” The Legends is scheduled for completion in spring 2005.

RED’s other project, The Shoppes at North Village, is located in St. Joseph, Missouri. The project is a 565,000-square-foot community center that RED is co-developing with Kansas City, Missouri-based The R.H. Johnson Company. The Shoppes at North Village is designed to capture the flood of retail dollars leaving northwest Missouri and northeast Kansas heading for Kansas City to the south.

“St. Joseph is an underserved market for retail and restaurants, making the center desirable for retailers and consumers,” Bacon says. The center will combine architecture that matches the historic nature of St. Joseph with major retail and restaurant tenants. The developer plans to announce a list of tenants in February. The $95 million project, located between Interstate 29 and the North Belt Highway, is scheduled for completion late this year or in early 2005.

In St. Louis, the biggest retail project is THF Chesterfield Development’s Chesterfield Commons. Currently, the 1.6 million-square-foot power center, located in Chesterfield at the intersection of Interstate 64/Highway 40 and Boone Crossing, is anchored by Sam’s Club, Wal-Mart, Target and Lowe’s Home Improvement Warehouse. When the 800,000-square-foot Phase II, which is currently under construction, is complete in 2005, the 2 million-square-foot project will be the largest open-air, single-entity owned shopping center in the United States.

“Chesterfield Commons has become a nexus of commerce between the firmly established executive community of Chesterfield, west St. Louis County and O’Fallon,” says Michael Staenberg, president of St. Louis-based THF Realty. “Many of the retailers at Chesterfield Commons are the lead locations for the St. Louis market.” One major tenant looking to take advantage of the high customer volume is Wehrenberg Theaters. The company is currently building an $18 million, 14-screen cinema complex, which will feature the region’s largest movie screen.

When completed, Chesterfield Commons will generate $5 million in annual property taxes and $3 million in annual sales taxes. The pace of retail sales have helped the city of Chesterfield pay off the public infrastructure bonds needed for the center at a faster rate. “The center’s layout and mix of national retailers has made Chesterfield Commons the region’s premier destination retail center,” Staenberg says.

Another St. Louis area project is the Festus Towne Centre located on Interstate 55 in Festus, Missouri. St. Louis-based Gundaker Commercial Group is developing the 250,000-square-foot power center to intercept shoppers from rural counties on their way to St. Louis.

“Festus Towne Centre is a destination stop that will relieve the community of having to travel excessive amounts for their purchasing needs,” says Mike Hejna, president of Gundaker Commercial Group. The $20 million center will feature a big box anchor and three to four junior anchors. The project is scheduled for completion in 2005.

In O’Fallon, Chicago-based IBT Group is developing O’Fallon Walk at Fierse Road and Highway K. The 144,000-square-foot center will be anchored by national fashion, soft goods and home goods retailers. The project’s tenancy and thoughtful design make it unique to the market, according to Gary Pachuchki, principal of IBT Group. The project, which will cost $20 million to $30 million, is scheduled to open in spring 2005.

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