Mall at UTC gives Bradenton-Sarasota area its 'time to shine'

Retail real estate experts bullish on Bradenton-Sarasota market

cschelle@bradenton.comJune 8, 2014 

UNIVERSITY PARK -- The first enclosed mall to be built in the nation since 2006 is drawing retailers with panache -- Apple, Camicissima Milano, kate spade, Calypso St. Barth, Omega, Willams-Sonoma -- and anticipation is building for opening day, so much so that tickets are selling for a pre-opening celebration.

The hoopla over the Mall at University Town Center is not surprising given the dearth of such shopping here. There's never been one place for families and tourists to get the kind of mix of retailers the mall will bring: destination shops, teen favorites and big departments stores.

That kind of shopping has been spread across the region, with the destination shops like Lilly Pulitzer and

Tommy Bahama at St. Armands Circle, and teen favorites at various malls in Sarasota, Bradenton and Ellenton, while department stores are split between the Westfield malls in Sarasota and the aging and largely vacant DeSoto Square mall in Bradenton.

So now that a big shiny new mall -- 880,000 square feet to be exact -- with the power to attract top-notch retailers is coming to the region, what's going to happen to the area's shopping landscape?

It will change for sure. This has long been an underserved market, and retailers are just now realizing there is spending power here.

Ellenton Premium Outlets and St. Armand's Square will likely be the only areas to completely retain character and style. Other malls -- including strip malls -- will be faced with replacing retailers, while DeSoto Square mall is likely to continue its transformation.

While some properties are anticipating dealing with vacancies and are in the process of repositioning, there will be a second wave of retail on the grounds at the $315 million Mall at UTC on Cattlemen Road near University Parkway.

Growth to come

Taubman Centers, based in Bloomfield Hills, Mich., has pre-designed expansion of the upscale mall in partnership with Benderson Development.

"We have an area on the east side of the shopping center near the interstate that can accommodate a future department store as well as a little bit more in-line tenant space," John Eggert, Taubman director of development, said during an interview at the International Council of Shopping Centers Global Retail Real Estate Convention in Las Vegas last month. "Typically if you're building a wing, you need a little bit of inline tenant space to connect the department store to the existing mall."

The mall doesn't have any specific timeline for the expansion, Eggert said.

"We like having the flexibility of being able to do something in the future if the right department store is out there and wants to come into the market," Eggert said.

So, it's Nordstrom, right?

"We love working with Nordstrom; we love to have them at the center," Eggert said. "That's a decision that Nordstrom is going to have to come to if that's something they're interested in doing. We're certainly interested to talk."

Whether it's Nordstrom or another department store, Taubman has done advanced planning to make the expansion seamless.

"We've actually done the prep work we needed to allow for that building. We've intentionally not run utilities in that area where that building pad would be, just to be smart about it," Eggert said.

A parking deck would also be needed, which would drive up the project's cost.

"We would have to add a small amount of deck parking in conjunction with that additional anchor," he continued. "That's going to temper our decision to some degree on how much sense it makes to do that. But it also provides a nice amenity for Florida weather."

That retail space connecting to the department store is being watched by prospective tenants, too.

"Hopefully we have folks knocking on our doors for years to come," said Eggert.

Committed, not complete

Robert Taubman, president and CEO of Taubman, recently announced in an earnings call that the UTC mall is more than 90 percent committed with less than five months until opening.

However, when the mall opens its doors, not every space will be filled. As leases and commitments come along, the mall has to refigure its remaining square footage.

"I don't think we've had an opening where we were 100 percent filled," Eggert said. Some barricades might be up in front of spaces with leases signed at the last minute.

Some retailers also prefer to have their opening staged closer to the holiday shopping season, rather than open in October.

Trendy stores are complementing the announced Macy's, Saks Fifth Avenue and Dillard's, with powerful mini-anchors Apple, Crate & Barrel and H&M joining new restaurants Zinburger Wine & Burger Bar and Seasons 52. A formal announcement of the remaining stores is expected this summer.

The 90 percent leased and committed is a long way from where the mall was when the project resumed in 2012. Taubman helped resuscitate the project after Forbes Co. left the picture.

"We had to fundamentally start over from a leasing standpoint," Eggert said. "There was not ever any lack of interest. The moment we recharged the project, we had a tremendous amount of interest from vendors and prospective tenants."

The two sides continued to find tenants for the mall space.

"When we first teamed with Taubman, we did it because we wanted to work with the best in the mall field," said Mark Chait, Benderson's director of leasing for the Southeast. "We are more convinced than ever that we made the right choice."

Time to shine

It's time for the Bradenton-Sarasota market to shine, and retailers looking at Florida are taking note.

"Sarasota offers much more diversity, and you've got depth there and you have untapped spending. You're finally seeing the growth that it deserves," said Faith Hope Consolo, chairwoman of New York-based Douglas Elliman Real Estate's retail, who keeps tabs on Florida retail's market. "Now all you have to do is fill all those missing uses, and you got to keep them all happy."

People underestimate the wealth in the Bradenton-Sarasota area that can help the market, she added.

"They say Sara-what, and they never talk about it. You have a lot of quiet money there, and they're different," she said. "They're not showy like the other parts of Florida, and there's a really quiet, substantial old money."

Some of the quiet money includes retail magnates like Macy's CEO Terry Lundgren, who has a home on Casey Key, and Rene Tremblay, president of Taubman's Asia division, who has property at the Glenridge on Palmer Ranch.

Upscale malls and city centers are flourishing, said Frederick Schmidt, president and COO of Coldwell Banker Commercial.

"The fact that they're building an upscale mall this size and nature says the regional market is very good for buying power," Schmidt said. "How the surrounding, ancillary buildings react or are developed certainly are addressing this audience, or an audience not served by this mall."

That lends itself to being a more stable market, too.

"I think that's going to attract a whole host of retailers," Hope Consolo said.

Upscale competition

Manatee County's upscale shopping is at the Ellenton Premium Outlets with Off Saks Fifth Avenue, Brooks Brothers, Michael Kors and many others. Outlets are far from bargain bin deals offering second-runs and mislabeled sizes. They're more labeled as factory stores offering specialized merchandise and the occasional deal.

American Eagle Outfitters, Ann Taylor, Bath & Body Works, Chico's, Gap, Gymboree, J.Crew, Journeys, Loft, Soma and Swarovski have stores in Ellenton and planned at the Mall at UTC.

Ellenton's outlet owner, Indianapolis-based Simon, is the dominant outlet operator in Florida by sheer volume, and retail experts believe there will be room for both. "The consumer associates an outlet with closeout and that's not what they are anymore," said Mark Gilbert, executive vice president of Capital Markets Group for Cushman & Wakefield, based in Miami.

"Michael Kors has very specific merchandise that they produce just for their outlet store. That's what many retailers do nowadays," Gilbert noted. "They sell one product in their primary store and sell a different product in the outlet, and they don't cross over."

Manatee's wealthy residents and tourists on Anna Maria Island and Longboat Key now are more apt to take a drive to St. Armands Circle where luxury shopping is plentiful. There, retailers including Brighton Collectibles, Soma, Chico's, Lilly Pulitzer, Boston Proper, The Walking Company and others will join the Mall at UTC.

Casto manages the retail at St. Armands and believes there is room to breathe.

"For St. Armands, I think it's less of a concern because it has enough distance," said John Hutchens, vice president of project management for Casto. "Sales remain strong for the retailers."

If anyone is leaving St. Armands, Hutchens hasn't been told.

"There may be some repositioning but I'm not aware of it," he said.

Struggling DeSoto

It's a former Simon property that may continue to fall on hard times with the opening of the new mall.

Simon sold DeSoto Square mall in 2009, letting it slip into foreclosure, while it was unloading other properties, identifying that the market and demographics of the surrounding area changed, according to retail analysts. Simon acquired the property in August 1996, 23 years after the mall first opened.

"The best days of that property are behind it, but the (leasing) price has been reset at a level that may allow them to attract alternative tenants to their properties," Gilbert said.

When Mason Asset Management took control in 2012, company president Elliot Nassim told the Herald that the mall is viable and promised to "roll up our sleeves" after investing $25 million.

Mason announced in February the purchase of Regency Square Mall in Jacksonville with hopes of redevelopment, too. But no redevelopment or repositioning plans have been announced for either DeSoto or Regency.

Nassim did not respond to the Herald's requests for comment for this story.

The company has made some cosmetic changes at DeSoto Square including a new sign on Cortez Road, improvements to Firestone and new awnings to be installed.

J.C. Penney signed a five-year lease this year with four additional options to extend. The lease expired Jan. 31, but was filed with the Clerk of the Circuit Court in April. The 73,628-square-foot department store has called the mall home since 1973, when it was called the Bradenton Mall.

The Dillard's space that had been vacant since 2009 is home to Hudson's Furniture, which is now open to the public. Hudson's turned the second level into an outlet center.

Mason might want to consider turning the mall into a "power center" focusing on fewer uses, one expert said.

"If there's a furniture mart it could become 100 percent furniture or be complimentary to existing retailers and do an entire thematic thing there," Schmidt said.

Older shopping centers that see new retail move in nearby ought to be ready for reinvestment and maybe not with traditional retail.

"B-class malls are in the most trouble in the country," Schmidt said. "They're challenging. There's no doubt about it. Some communities are making them community centers, assisted living or knock down a portion of them and re-use them for call centers or corporate uses."

Gone from DeSoto Square are stores like FootLocker, Old Navy, Hallmark and Boater's World and restaurants Sbarro's and Starbucks. A CrossFit gym tried to make a go of it in the former Boater's World, but left after four months because the demographics were wrong. Based on leasing information by Mason, the mall has a 12 percent vacancy in terms of square footage. Out of the 678,377 square feet in the mall, 84,373 square feet is empty, making up 22 spaces.

The mall mirrors the effects of the Great Recession, where the attention pulled away from the middle class and instead catered to the lower income and wealthier shoppers.

"The high-end is doing well and the discount end is doing well, and the middle is not doing well, and that's just reflective of the overall economic situation we're in where the middle class is kind of getting squeezed," said Ronald Wheeler, chief executive officer of The Sembler Co., in St. Petersburg.

Charles Schelle, Herald business reporter, can be reached at 941-745-7095. Follow him on Twitter @ImYourChuck.

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