Thursday, August 1, 2013

Premium Outlets looks to open outlet mall in Norfolk

NORFOLK, Jul 31, 2013 (The Virginian-Pilot - McClatchy-Tribune Information
Services via COMTEX) -- The nation's largest owner of retail properties is
looking to build an upscale outlet center near Norfolk International Airport
that would replace at least part of a city-owned golf course.

Simon Property Group Inc., which owns Williamsburg Premium Outlets, has made an
offer for land on Northampton Boulevard, the site of Lake Wright Golf Course,
according to sources who would speak only anonymously because the project has
not been announced.

Details, such as what Simon offered to pay and when a deal might be completed,
were not available. There is also no information on potential tenants. But one
source told The Virginian-Pilot the project would be the most significant retail
development in Norfolk since MacArthur Center opened downtown in 1999.

If the project is like other recently opened Simon outlets, it could create 800
to 1,000 retail jobs and about 200 construction jobs. The city is not offering
tax incentives, the sources said.

The Pilot asked for a copy of the company's letter of intent, but officials
declined to release it, citing a provision of the state Freedom of Information
Act that allows them to withhold records pertaining to ongoing negotiations.

"We are in negotiations regarding a real estate matter and do not have anything
to share at this time," city spokeswoman Lori Crouch said.

The City Council has been briefed in closed session on the project and is
expected to discuss it again this month when it returns from summer break.

Simon Property Group officials did not respond to phone calls requesting
information about its plans. Simon, based in Indianapolis, owns 325 retail
properties across the United States, including Chesapeake Square mall in

The company's Premium Outlets unit has grown particularly fast. Three new outlet
centers are scheduled to open this month in St. Louis, Toronto and Busan, South
Korea. All of them, according to a release, are between 98 and 100 percent

The center on U.S. 60 in James City County, west of Williamsburg, opened in 1988
and underwent a major expansion in 2008. It was one of 21 outlet centers bought
by Simon in 2010 in its acquisition of the Prime Outlets chain.

The Williamsburg-area center had grown into one of Hampton Roads' most popular
shopping destinations, even before Simon's takeover. Among its 135 stores are
dozens not available elsewhere in Hampton Roads, such as L.L. Bean, Burberry and

While opening a center in South Hampton Roads might siphon shoppers from this
part of the region, the company has found success in other markets with multiple
locations. In Northern Virginia, it operates Leesburg Corner Premium Outlets and
Potomac Mills. It has two outlet centers in Las Vegas and three in Orlando, Fla.

Simon has tried in those cases to keep each center's tenants distinct to
encourage shoppers to frequent both. The center in northern Las Vegas has about
three dozen clothing retailers that aren't in the center in southern Las Vegas,
for example.

The centers are major employers. More than 1,000 people work at Williamsburg's.
The 90 retailers at Phoenix's newly opened Premium Outlets employ about 800,
according to news reports there. And a new 100-store center scheduled to open
next spring in the Charlotte, N.C., area will have more than 1,000 employees,
the company has said.

The Lake Wright course, which is nearly 50 years old, sits near the airport and
Interstate 64. It is one of the city's three golf courses. Lake Wright and
Lambert's Point courses are both managed under a contract and are expected to
need a $436,893 subsidy, according to the city's budget.

How much of the Lake Wright property would be developed and whether any of its
18 holes would remain or would become green space hasn't been determined,
sources said.

The course is in Norfolk and Virginia Beach, so both would benefit from the
development. For one, plans indicate Wesleyan Drive in the Beach would be
extended northwest to Miller Store Road, said Virginia Beach Councilman Lewis
Jones. That would help develop the area of the city known as Burton Station,
which has been the focus of a growth plan, Jones said.

Burton Station was built by freed slaves, and some of the same families still
own property there.

"We'll work well together to bring it across the finish line," Virginia Beach
Mayor Will Sessoms said.

While the outlet mall is being lauded for its potential economic impact, the
news may not sit well with the golfing community and some residents.

Dee Monaco of Lake Taylor said a golf course is preferable to another shopping
center in the area. William Bickel, owner of Froggie's Cantina at the Beach,
said he picked Lake Wright for his restaurant's first annual charity golf
tournament, primarily because of the prices. The "forgiving" fairways are also
appealing, meaning it's an approachable course for beginners, he said.

Besides being close to one of the region's most-traveled interstates, the site
is attractive because it sits along a key thoroughfare for the Chesapeake Bay
Bridge-Tunnel, a major route for travelers to and from the Northeast.

"It's a strategic location with the interstate, with the airport, with the
central-ness of location to Southside Hampton Roads," said Ned Williams, vice
president of William E. Wood Commercial and Investment Real Estate. "It's very

Local developers have said for years that South Hampton Roads might be an
attractive location for an outlet center, particularly during the summer, when
visitors to Virginia Beach and North Carolina's Outer Banks swarm the region.

Virginia Beach developers took a stab at the outlet craze in the 1980s with
Great American and Celebration Station, two large centers aimed at off-price
shoppers. Unlike Premium Outlets, set up for shoppers to stroll outdoors from
store to store, Virginia Beach's failed centers were enclosed malls. They didn't
attract higher-end merchandisers, whose outlets tend to fare best.

Williamsburg Outlet Mall, an enclosed discount mall near Premium Outlets, lasted
longer, but it announced in April plans to close by the end of this year.

Pilot writers Dave Mayfield, Gabriella Souza, Sarah Kleiner Varble and Carolyn
Shapiro contributed to this report.

___ (c)2013 The Virginian-Pilot (Norfolk, Va.) Visit The Virginian-Pilot

(Norfolk, Va.) at Distributed by MCT Information Services

Jillian Nolin

Copyright (C) 2013, The Virginian-Pilot

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