Sunday, June 30, 2013

St Louis Premium Outlet mall just the beginning of $300 million Blue Valley development

This rendering shows one vision for Chesterfield Blue Valley. (Photo courtesy of Chesterfield Blue Valley)
By: Carol Enright Posted 06/26/13 8:00 am Newsmagazinenetwork.com

As St. Louis Premium Outlets prepares for its grand opening on Aug. 22, Dean Wolfe has his sights set on the 73 acres yet to be developed around the mall. Wolfe is the principal of the 134-acre Chesterfield Blue Valley, which is home to the 50-acre outlet mall being built by Simon Property Group west of Hwy. 40 and south of the Daniel Boone Bridge.

The mall is almost leased out. Seventy-seven tenants, out of the 85 storefronts in phase one, have municipal zoning approvals from the city of Chesterfield for interior finish work – and are on their way to receiving building permits from St. Louis County. The new mall boasts a number of high-profile brands, including Coach, Cole Haan, J. Crew, Kate Spade, Gap, Nike, Ugg Australia, Under Armour, Vera Bradley and tony anchor Saks Fifth Avenue Off 5th.

Wolfe said he could not confirm that the mall was fully leased.

“It takes 60 days to build out tenant space, so, very shortly, we will have our final tenant count for the grand opening,” he told a recent meeting of the Chesterfield Valley Coalition.

In an April 26, 2013, first-quarter earnings conference call, Simon Chairman and CEO David Simon said the property was 96 percent leased and on its way to being fully leased at opening. Simon officials said they have seen so much interest in the mall that they are in discussions with retailers about leasing space in phase two of the center. They would not offer any details as to when phase two might get underway, but Wolfe speculated it could be soon after the grand opening.

At presstime, the other outlet mall, opening in the Valley on Aug. 2, Taubman Prestige Outlets Chesterfield, was not prepared to issue any current leasing figures. However, the Chesterfield city website shows that 46 tenants at that mall have been issued municipal zoning approvals. Last December, Taubman officials said the mall was 70 percent leased.

As St. Louis Premium Outlets hosted a job fair on June 21 to recruit more than 800 employees, Wolfe provided another employment figure: 4,000. That is the number of jobs he projects will be supported by the entire Blue Valley development in 2018.

Wolfe offered up a few more numbers, including 910,000 square feet of building area left to develop in Blue Valley. This dwarfs the 391,000 square feet of gross building area in the outlet mall development.

At the Chesterfield Valley Coalition meeting, Wolfe talked about the 1,750 new trees that will be planted in Blue Valley. He joked that they were “taking soybean fields and turning them into forests.”

Shoppers can meander through this “forest” on 3 miles of sidewalks and 37 acres of open space.

From there, the numbers skyrocket.

Wolfe said the total capital investment in Blue Valley, including the outlet mall, would reach $300 million. Annual projected sales are $350 million by 2018, which translates to $24 million in projected tax revenue. This more than doubles the sales projections put out by Simon last July, when it predicted that the outlet mall alone would generate $140 million in annual retail sales and $11 million in sales taxes.

So, where is the other $200 million-plus going to come from?

Chesterfield Blue Valley is zoned for retail, office, hotel, restaurant and entertainment venues. Wolfe said he is not at liberty to reveal the names of any potential users; however, he said he is negotiating with several and has received six letters of intent.

Three-and-a-half million is the number of visitors the new mall is expected to attract. All those shoppers will create traffic that will be accommodated by newly widened sections of Chesterfield Airport and Olive Street roads. The biggest road improvement is a new intersection connecting a seven-lane section of Olive to the newly widened five-lane Chesterfield Airport Road. Wolfe said he expects 20 percent of the traffic to travel to the site via Chesterfield Airport Road, 40 percent to come from the east going west on Hwy. 40 and about 25 percent to come from St. Charles County.

In addition to widening Olive Street Road, Wolfe plans to ask the city to rename it. He said that most locals are confused by the name, as they expect Olive to continue from where it becomes Clarkson Road near Faust Park. They have no idea that it reappears in the Valley.

Wolfe also explained the origins of the Blue Valley name.

“When you drive down from Chesterfield Mall and you’re looking across the Valley, it sort of looks blue and hazy – because of the humidity, probably,” said Wolfe.

But the real inspiration came from a book called “Blue Ocean Strategy: How to Create Uncontested Market Space,” by W. Chan Kim and Renee Mauborgne.

“We don’t have an ocean here, but we have a valley,” said Wolfe. “And what we really liked about the location was by being at the west end and at the bridge – the gateway – we were really creating a situation where the other competition to what we wanted to do was going to be irrelevant.”

Wolfe said he hopes to see some activity on new Blue Valley projects this fall. But said he told all interested tenants that he didn’t want any construction happening until after the mall opens.

“We really did not want to distract from the grand opening on Aug. 22,” Wolfe said.

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