**I called Pen Equity and spoke to the agent about the tenants of this project. He told me there is very little chance of an IKEA at this site. I asked him what makes this project any different than any other big box site. He told me that it will be different because the tenants will be new to the area and the design is much better than your average big box sprawl. I am wondering if one of the tenants could be Bass Pro or Cabela's, both of which are new to Canada. They are big stores that do attract people from out of town.
Gateway project a retail drain
SHOPPING: Shuffling the deck
By NORMAN DE BONO THE LONDON FREE PRESS
Last Updated: May 4, 2011 9:07pm
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A $100-million "gateway" project would mark London's Hwy. 401 entrance under a new proposal.
About 25 hectares of land - from the Costco store, south of Hwy. 401 on Wellington Road, to Dingman Road - would become home to a 500,000-sq.-ft. retail and commercial plaza.
"It is an exciting development. We want to bring London to Highway 401," said David Johnston, president of PenEquity Realty Corp. in Toronto, the project developer.
While much recent London development has been in the north end, it's time London embraced Hwy. 401 with a high-profile, welcoming development, he added.
"It will have large retail users and other uses too. It's very unusual to find that type of location available in Ontario on a 400-series highway."
There are rumours PenEquity has landed a Loews store as its anchor tenant. Other uses are rumoured to include office space and even a hotel. But Johnston declined comment, saying more details will be revealed in June.
"Where can you find a combination of a city that is a regional hub, has an international airport, a population of about 400,000 and 50,000 cars driving by every day? We will provide something unique, something different to draw people from Waterloo, Woodstock, Sarnia and Windsor. It will be exciting," he said.
The city hasn't received a formal application for the development, but the application is "imminent," said Jim Yanchula, the city's manager of community planning and urban design.
The location has 610 metres of frontage along Hwy. 401. The 25 hectares site includes a large man-made pond which, if kept, reduces the developable site to 21 hectares.
"This is moving ahead very rapidly," said Peter White, chief executive of the London Economic Development Corp.
"It is an outstanding location. It will be a wonderful gateway development, the best visibility in the city."
But the development raises concerns about retail saturation in London. The new development will leave a trail of empty stores elsewhere in the city, predicted retailing expert Michael Pearce, a professor at the Richard Ivey School of Business at the University of Western Ontario.
"It will draw from old to new and it will be a dogfight" for shoppers, he said.
He dismissed grand descriptions of "gateway development," saying it'll really be a collection of big-box stores, called "power nodes" similar to those found in Hyde Park, and hardly a grand welcome to the city, said Pearce.
"We have had enough stores for a long time, but shoppers are attracted to new," he said.
It could also spell more gloom for the downtown, especially the development includes office space for lease, he added.
"It is another part of the long-term shift away from downtown; that will keep happening," said Pearce.
For a preview of the impact the PenEquity deal could have, look no further than Westmount Shopping Centre, a "ghost mall" killed by new power node development at Wonderland and Southdale, roads, said Pearce. The mall is converting to office space, which hurts the downtown.
"Is there any reason to believe there is a net positive to this, or are we just shuffling the deck here? Westmount is a great example of that," he said.
A Toronto-area businessperson planned the development and bought the land, but the economic downturn killed that deal and PenEquity stepped in as developer, said Peter Whatmore, vice-president of commercial realtor C.B.Richard Ellis.
"It is a beautiful site and will become a regional draw," he said.
The area is in for a larger retail makeover with the Crossings Centre, at Wellington and Exeter roads, getting a new look and office space, said Chris Kirwin, vice-president and broker with Colliers International in London.
The plaza will add a 10,000-sq.-ft. electronics store, 60,000 sq. ft. of office space and two restaurants.
"The main challenge for that centre has been access off Exeter Road," said Kirwin. "We are talking with the city about additional access."
He welcomes the PenEquity development, saying it would make the entire Wellington strip more of a shopping destination.
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