Tuesday, October 2, 2012

As battle to build outlet malls plays out, Chesterfield has little control over outcome

By: Carol Enright - NewsMagazineNetwork

On Sept. 20, St. Louis Premium Outlets, the outlet center planned for the south side of Hwy. 40 east of the Daniel Boone Bridge, announced that it had signed a number of new merchants, including BCBGMAXAZRIA, Charlotte Russe, Jos. A. Bank, Bass, Gold Toe, Saucony, Sperry and Vera Bradley. Simon Property Group and Woodmont Outlets, joint developers of the mall, said the property is now 75 percent leased.

Ten days earlier, Taubman Prestige Outlets Chesterfield, the outlet center going up on the north side of Hwy. 40 east of the Hardee’s Iceplex, announced that it had accelerated its opening by nearly three months to Aug. 2, 2013, to take advantage of the back-to-school, tax-free weekend.

These are the latest in an ongoing string of “tit-for-tat” announcements that have taken on the tenor of a tennis match since the race to build an outlet mall began to heat up last spring. Taubman served first when it announced its unofficial groundbreaking in April. Simon quickly returned the ball by announcing that same day that Saks Fifth Avenue Off 5th had signed on as an anchor. On July 11,

Simon held its official groundbreaking. Exactly two weeks later, Taubman held its official groundbreaking. Through it all, both developers have maintained that only one outlet mall can succeed in Chesterfield Valley – and both have reiterated that they are fully committed to building their respective outlet malls.

At the Simon groundbreaking in July, Chesterfield Mayor Bruce Geiger used the word “surreal” to describe the prospect of two outlet malls in Chesterfield Valley.

“I would have thought, by this point in time, one would have dropped out,” the mayor said at the time.

In an August interview with West Newsmagazine, Martin Sneider, adjunct professor of retail at Washington University’s Olin School of Business, called it “suicidal” for developers to build competing outlet centers in Chesterfield.

But it’s been three months since those July groundbreakings and both developers appear more entrenched than ever.

Taubman has secured its building permit and ramped up construction at its site. At presstime, Simon was still working on securing its municipal zoning approval from the city – the last step before getting a building permit from the county – but had received city approval to construct footings and foundations.

Those who have been following the story continue to wonder why the city is allowing two outlet malls to be built.

The short answer is: It isn’t.

“We don’t have the ability, based on so many laws, to pick and choose winners and losers,” explained Geiger. “Once developers come in and comply with all the legal zoning requirements, it then becomes a matter of the marketplace, not the city, being able to say yes or no.”

Geiger said he believes one outlet mall “would be terrific for the region and terrific for Chesterfield.”
But, like many Chesterfield residents, he said, “I, too, have a problem with two of these premium outlet malls.”

What most residents don’t understand, said Geiger, is that as long as developers build in accordance with the zoning requirements of the city’s comprehensive (master) plan, the city has little choice but to let them proceed. In fact, if the developer complies with all city requirements and the city denies its approval, the city could open itself up to legal action.

In the case of the outlet malls, both sites are zoned planned commercial. This allows the building of retail stores, hotels, restaurants or office buildings.

“We didn’t zone it for a premium outlet center,” said Geiger. “We zoned it for a planned commercial, which allows retail.”

Geiger said the Taubman Group approached the city with a proposal for an outlet mall in July 2011. In February 2012, the owner of Chesterfield Blue Valley, the future home of St. Louis Premium Outlets, told the city that a developer was interested in building a premium outlet mall on 50 acres of his land.

“My mouth dropped open,” said Geiger. “Not knowing much about premium outlet malls, I’m thinking, ‘we’ll have two?’”

In each case, Geiger said the city’s job was to make sure that the developer complied with the city’s comprehensive plan and zoning laws.

“The zoning laws say that a landowner has the right to realize the highest value for his property, as long as they’re in compliance with the comprehensive plan and the zoning for the municipality they’re trying to develop,” Geiger explained.

Even as the city was working with both developers on their site plans, Geiger said city staff expected that one would eventually pull up stakes.

“History showed us these two competitors had tangled in the past and, at the last minute, one had pulled out. We fully expected the free-market system to have the same result here,” he said.

If both malls eventually do open, Chesterfield can expect an influx of two-to-three million shoppers. And both developers have said that up to 90 percent of these shoppers will be from outside the city.

Chesterfield Police Chief Ray Johnson acknowledged that a new outlet mall or malls would place “an added workload” on the department.

“We are looking toward (the outlet malls) with an eye toward the increased people, which always brings crime, victimization and traffic,” said Johnson.

The flip side of having too many people flooding into the city is having too few to support two new malls. So, what happens if one fails?

Geiger said the city’s property maintenance ordinance would require the developer to keep the property up. However, if one of the centers were to fail, Geiger said the city would ask the developer to tear it down. Still, the mayor said he doubts that either developer would risk its reputation by leaving behind an eyesore.

“The visibility of both of these outlet malls from the highway is outstanding,” said Geiger. “I can’t imagine that they would leave those buildings so that people could say, ‘That’s Simon’s or Taubman’s failed outlet center.’ ”

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