I found a nice article from March about "Omnicenters" [Eastchase style development]. It includes some talk of our local Eastchase development, very interesting. Do we have a future mid-town ATL style development on our hands? It's long.. I put the important parts in bold. Enjoy.
THREE IN ONE
Omnicenters blend aspects of
malls and
power and
lifestyle centers
BY DEBRA HAZEL
Is it a mall, a power center or a lifestyle center? Truth be told, one of the latest shopping center formats that some developers are embracing happens to be all three.
Dillard’s and Sam’s Club, JCPenney and Best Buy — normally, these would not appear on the same tenant list. But you’ll find them all at Yuma Palms (Ariz.) Regional Center, outside Phoenix, which combines mall, lifestyle and power center components in a unified, open-air layout. As is the case with other such centers — call them omnicenters, though they don’t have an official name just yet — tenants range from department stores to big boxes.
Omnicenters are cropping up across the U.S., from Florida to Phoenix, in what developers say is a response to several trends in the retail sector, including the desire of tenants for lower common-area maintenance charges and the growing tendency of consumers to cross-shop.
“The Target customer is also a Cheesecake Factory customer, a J. Crew customer, a Dillard’s and a Nordstrom customer,” said Paisley Boney, CEO of Ben Carter Properties, an Atlanta-based development firm. “Ideally, you’d like to incorporate all the uses into one master plan.” Ben Carter Properties and co-developer Simon Property Group are doing just that at St. John’s Town Center, an omnicenter that opens this month in Jacksonville, Fla.
Most omnicenters (not to be confused with master-planned communities) are located in suburbs, don’t necessarily include residential components, and lack certain civic amenities that are typically found in a true downtown, such as a courthouse, post office, library, government office or church. They range in size from 1 million square feet to well over 1.5 million square feet and incorporate retail in all its incarnations and formats. The ideal site for omnicenter development is a small market with a significant patch of land still available, and near a major metro area, developers say.
St. John’s tenants run the gamut. The project’s 1.3 million square feet of retail is divided into three components: a lifestyle center with a Dillard’s anchor, a community center anchored by Dick’s Sporting Goods and Barnes & Noble, and a Main Street with Cheesecake Factory and P.F. Chang’s as anchors.
Westcor Development Partners’ Yuma Palms Regional Center, which opened in November, contains 1 million square feet of retail. It features a big-box center on one end linked by green space leading to a Main Street center at the other. The department stores and additional specialty retail are located in a third zone next to the Main Street.
Omni-care needed
Omnicenters require more than just marrying a lifestyle center and a power center on the same parcel, however. Site selection, leasing, layout and architecture call for much care if these projects are to be successful, developers say.
“It’s all in the leasing and the planning,” said Will Wilson, vice president of development at Jim Wilson & Associates. The Montgomery, Ala.-based firm is developing The Plaza at EastChase and The Shoppes at EastChase in its hometown, all on one site. The Plaza consists of an 810,000-square-foot fashion center and a 220,000-square-foot power center, both linked to The Shoppes, a 435,000-square-foot lifestyle center.
Omnicenters are more complicated to build than enclosed malls, says Thomas J. Schneider, executive vice president of development at Simon. This is because all their buildings accommodate vastly different uses — the category killers require one building size, the department stores another and the long blocks accommodating the specialty stores yet another.
Unifying these different buildings so that the project still resembles a cohesive whole demands skillful use of similar architectural themes and elements throughout, says Larry D. Ellermann, president of Phoenix-based Ellermann + Schick Architects, which designed Yuma Palms. He tied the project together through signage, landscaping, light fixtures and other elements.
Consequently, omnicenter development isn’t cheap — St. John’s reportedly is costing $158 million. That works out to about $100 per square foot of leasable space, compared to an average of $150 million to $190 million per square foot for malls. Thus far, though, the projects have not been more difficult to finance, according to Gilbert W. Chester, a principal at Phoenix-based Westcor, though he acknowledges that the backers “sure tracked it closer.”
It is the format’s diversity of tenants that makes it attractive to lenders. “One of the negatives of power centers was that there were very few tenants, and they are very large,” said Scott Zucker, a managing director at New York City-based IXIS Real Estate Capital. “An issue with one tenant could lead to a default.”
Give ’em room
Not surprisingly, omnicenters do require a lot of land. The EastChase complex, for example, occupies more than 330 acres, which will eventually house 1.5 million square feet of retail, as well as hotels and office space. St. John’s Town Center occupies 200 acres and will also include hotel and residential space. Yuma Palms, the smallest of the three, stands on about 100 acres.
“I don’t know many cities with the opportunity to use 1.2 million square feet [for retail development],” said Howard R. Gordon, senior vice president of business development and marketing at Cheesecake Factory.
Parking is an issue too, of course. Big boxes require large parking fields in front — “the antithesis of an urban street,” according to Boney. Yuma’s Main Street, power center and Sam’s Club (on its own parcel) occupy distinctly different areas, so cars are kept away from the places they’re not wanted. “We really encouraged a lot of pedestrian activity in the Main Street area, while the power center is serviced by cars,” Ellermann said.
Omnicenters’ critical mass provides a draw for retailers, despite lacking the four department stores that typically anchor a super-regional mall, Boney says. The size of St. John’s Town Center certainly appealed to Dana Stallings, co-owner of the franchised Kilwin’s chocolate shop that will open there this month. Though the typical Kilwin’s is about 1,500 square feet, Stallings settled for a 1,200-square-foot spot next to P.F. Chang’s in the lifestyle portion of the project. “For the location, we’ll take it any way,” Stallings said.
But placing tenants in the proper locations is more difficult in an omnicenter than it is at a regional mall because of the different uses and the layout necessitated by the big boxes. “They’re still not terribly workable,” said Roy H. Higgs, CEO and managing principal of Development Design Group, the Baltimore-based architecture firm that consulted on St. John’s Town Center. “You still need your car. They connect but do tend to have different shopping experiences.”
Retailers that work well with a department store anchor may not necessarily want to be too close to the big-box complex. Coordinating the layout of St. John’s Town Center required “sitting down with a lot of different tenants to figure out a plan that made everyone happy,” Boney said.
But the end result is worth it, the developers say.
Both Chester and Wilson say shoppers spend more at omnicenters, with the different retail complexes feeding each other. And when it comes to co-tenancy, the retailers themselves say the more the merrier once they have figured out where they want to be. Dillard’s, one of the few department store chains still opening new stores, is an anchor at the aforementioned Simon, Westcor and Jim Wilson projects.
Thus far, the only major category missing at omnicenters is the supermarket, because razor-thin supermarket margins make their risk of entering an untested format prohibitive. Yet even there, omnicenter developers say it is simply part of the next step for these projects. Boney says that an upscale grocery store is likely in the 150,000-square-foot second phase of St. John’s Town Center.
Meanwhile, Simon is building another such center, Coconut Point, in Estero/Bonita Lakes, Fla. Coconut Point will offer 1.2 million square feet of retail, consisting of The Village, anchored by Dillard’s, The Lakefront, anchored by a Medico cinema and some restaurants, and The Community Center, dominated by a Sears Grand. The Lakefront and the Community Center are scheduled to open in October, with the Village set to open in September of next year. Wilson has another such complex under development, in Collierville, Tenn., outside Memphis.
So if the omnicenter doesn’t exactly become omnipresent, expect to see the number increase. “We’ll see a lot more of it,” Higgs said. “It’s a better land use, overall.”
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