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Originally Posted by cokezero
What does everyone think about Midtown's chances for landing an "anchor" store along the lines of a Macy's or a Target for their Midtown Mile?
The only likely place I believe one could be built is on Dewberry's 10th and Peachtree Street site. Every other sizeable tract along the Midtown Mile is either developed or in the process of being developed.
However, every traditional department store chain in the Atlanta area is already represented at Peachtree and Lenox (with the exception of Sear's and JCPenney, but Sear's has transformed into nothing more than a real estate holding company and I can't imagine JCPenney seriously considering a non-mall or lifestyle center location). Macy's already failed once, so I can't imagine them ever seriously considering another try at Peachtree Street for Macy's or their sister chain Bloomingdale's. Would any of the other stores in Buckhead (Nordstrom, Neiman Marcus, Belk/Parisian, Saks) consider opening another location in Midtown?
I'd say no, none of the Buckhead department stores would consider opening an additional store in Midtown. So then that would leave us with only big box retailers as potential anchors. In my opinion, Target is already cannibalizing itself with so many intown stores (North Buckhead, South Buckhead, Edgewood, and Atlantic Station) and wouldn't be interested. Wal-Mart, wih only one intown store, could be a possibility and would probably be a big draw. But with Wal-Mart being everyone's favorite big box to hate, I'm sure NPU-E and the Midtown Alliance would do everything they could to keep them off Peachtree.
So then what? Can the Midtown Mile be this world-class shopping destination everyone is envisioning if it only has the likes of a Gap and a Crate & Barrell? Or better yet, will those chains even open a store on Peachtree without an anchor or two nearby?
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Markets and competition notwithstanding, it is virtually impossible for traditional department stores today to be created in any urban environment for several reasons. The biggest reason being that they typically pay very little rent, so a free-standing department store (or one on the ground floor of an office or condo buildings is really a money loser unless: a) there is some sort of public subsidy, or b) the developer of said project owners a lot of street level retail nearby and can justify raising the rents on the in-line stores to subsidize the department store (which theoretically will make the other retailers more valuable.
One scenario where it could possibly work without public subsidies is if somebody like Selig, who owns several adjacent blocks and takes a long-term perspective, were to put one in. Essentially, it would be on par to creating an urban mall financing mechanism and it MAY be viable.
The most likely option would be a large-scale vertical retail center similar to Water Tower Place in Chicago. In this case, the big store could by subsidized by the smaller ones around it and within the same project.
I don't think Midtown needs a department store anchor. There are many junior anchors or shadow anchors that could and will work just as well.
These are the very same reasons why we'll probably never get a traditional department store in the former Macy*s space in Downtown. Without public support, no developer in their right mind will lease to a store at the terms the store would want. The only viable option might be something like Wal-Mart or Targer, which are actually used to paying rent.
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