West LR Mall May Open in 2003.
IT LOOKS LIKE THE MALL that wouldn't be built may be built after all.
It's been more than four years since Simon Property Group Inc. spent $6.3 million to acquire 95 acres on Interstate 430 in west Little Rock, south of what is now the Arkansas Heart Hospital. At the time, speculation was that the long-planned Summit Mall would be built on the site, possibly opening as early as 2000.
Now Bill Clark, whose firm likely will be the contractor on the project, says construction on the mall could start in 18 months and could cost in the neighborhood of $40 million-$50 million.
"It's on again, off again," Clark, chief executive officer of CDI Contractors Inc. in Little Rock, says of the mall that was first envisioned in 1988. "But if I had to guess, I'd guess yes [it will be built]. I really think it will be done, but it's just being shoved forward."
Clark speculates that other anchor tenants, in the mall likely would include J.C. Penney Co. and Sears Roebuck & Co.
"I'm sure Sears would love to get away from their free-standing store [on University Avenue]," Clark says.
The speculation four years ago when Simon Property Group bought the land -- at the southwest corner of Shackleford Road and I-430 -- was that Dillard's had entered into an agreement with Simon Property to limit the mall's anchor tenants to stores already in central Arkansas.
If that is true, it would mean that Penney's, Sears, M.M. Cohn or Montgomery Ward & Co. could be department store anchors in the mall. And national firms such as Nordstrom's would be excluded.
Nationally, mall construction has dropped significantly since the early 1990s. The International Council of Shopping Centers projects that 23 new malls will open from the end of 1998 through the end of next year.
The Summit Mall was a dream of Jim Wilson & Associates of Montgomery, Ala., when it bought the land in 1988. It paid $11 million for the property. But Wilson encountered financial problems and forfeited the property in lieu of foreclosure in 1991.
At Dillard's Inc.'s 1995 annual meeting, William Dillard Sr., founder and chairman of the Little. Rock department store chain, said Dillard's would definitely be an anchor store in the mall if it's ever built. Dillard's Park Plaza stores would remain open even if the Summit Mall is built, Dillard said.
Clark, who owns CDI with William Dillard II, chief executive officer of Dillard's says that a new west Little Rock mall would be a major competitor both Park Plaza and University Mall.
In 1995, Dillard Sr. said he was unsure if the site was the best spot in west Little Rock for a new mall, although he had no other location in mind.
Dillard said he advised Simon Property Group to buy the land because "the price was too good to pass up." At $6.3 million, 57 percent of what Wilson paid in 1988, Simon Property Group spent only $1.50 per SF.
The two-story mall was originally planned for four anchor tenants and 925,000 SF, larger than McCain Mall in North Little Rock. The cost for the project was lion estimated at $80 million in 1988, but that included three adjacent six-story office buildings, two restaurants and even a 10-story, 250-room hotel.
Tony Bozynski, assistant director of planning and development for the city of Little Rock, says Simon Property Group has the zoning rights to build the mall because it has continued to get extensions on the zoning.
"It's been approved by the city," Bozynski says. "I don't know if the plan is still to develop it as it, was approved or not. I don't know where the plan for a hotel and office buildings stands with [Simon Property's] current thought on development."
Asma Usmanti, a research analyst with A.G. Edwards & Sons Inc. of St. Louis, says a reason fewer malls are being built as the next century nears is because many national retailers already have a presence in malls in major metropolitan areas.
"So it becomes more of a challenge to open new malls and attract traffic without cannibalizing existing malls," she says. "Companies, to maintain their growth rates, are having to look to other sources of growth.
"One way, of course, is by acquiring other companies with locations in malls where they don't have a presence. And we have seen some companies, instead of opening a store within a mall, actually going to build a standalone store."
The International Council of Shopping Centers projects that an average of only seven traditional malls -- including typical anchor department stores such as Dillard's, Sears or Penney's -- would open each year from last year through next year.
The high for the decade was in 1990, when 19 malls opened. The low was nine in 1993 and 1994 combined.
One difference is that the malls opening in the next couple of years are much larger than those early in the decade. The 23 malls opening by the end of 2000 will average almost 1.2 million SF each, 70 percent larger than malls that opened in the late 1980s.
All but one of the 23 malls are superregional malls of more than 800,000 SF with three or more department store anchors, which will likely be the case for the Summit Mall.
Malachy Kavanagh, a spokesman for the International Council of Shopping Centers, says another reason fewer malls are being built is because more malls are being renovated and expanded.
"And it's very difficult to find the 70-80 acres you need for these malls," says Kavanagh, who notes there are about 1,800 malls in the United States. "Getting the permitting process takes a long time. It's not unusual for it to take from five years and, in some cases, 10 years to build a large mall."
Kavanagh also notes that there are not as many potential department store anchors for malls because of so much consolidation in the industry. But malls no longer rely solely on department stores to draw shoppers.
Other anchor space is being used by restaurants and theaters, Kavanagh says.
"While some of the department stores have vanished, there are other stores that have stepped up and replaced them -- such as Wal-Mart, Target and Home Depot," Kavanagh says. "Most of those category-killers like to own their own [buildings], but we are seeing them become anchors of enclosed malls. They are like every other retailer: they want to expand their reach and appeal to as many customers as they can."
Largest Mall Owner
Indianapolis-based Simon Property Group is building one of the 23 end-of-the decade malls, the Mall of Georgia, a 2 million-SF mall north of Atlanta. "The closest new malls to Arkansas are the 1.3 million-SF Circle T Center in Fort Worth and the 1.1 million-SF Opry Mills Mall in Nashville, Tenn., which are scheduled to open next year.
Simon Property Group is the largest shopping center owner in the country. It owns more than 175 million SF of space, 90 percent larger than the No. 2 firm, General Growth Properties Inc.
Simon Property Group owns 242 properties, including 153 regional malls and 77 community shopping centers in 35 states. More that 4,400 different retailers have more than 18,400 stores in the company's properties.
Dillard's is an anchor tenant in 63 of those properties, including the Mall of Georgia.
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|Date:||Nov 1, 1999|
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