Wednesday, January 22, 2014

Proposed outlet mall would bring 90 stores to Norfolk

By Carolyn Shapiro The Virginian-Pilot January 15, 2014 NORFOLK

Simon Property Group Inc. is expected to invest about $75 million to build its second Premium Outlets mall in Hampton Roads with 90 stores on an aging city golf course, city staff members announced Tuesday in a presentation to the City Council.

Redevelopment of the Lake Wright Golf Course property also would include about 65 acres that the city would retain for green space, walking trails, a possible amphitheater to host open-air music concerts, picnic areas, a pedestrian bridge over the lake, and boat rentals, Assistant City Manager Ron Williams said during his presentation.

Williams was the first to publicly name Simon, the nation’s largest mall owner, and its intention to build an outlet center in South Hampton Roads, confirming earlier reports in The Virginian-Pilot. Based in Indianapolis, Simon also owns Williamsburg Premium Outlets in James City County.

The company would buy about 50 acres from the city’s Economic Development Authority, which owns the land that borders and slightly overlaps the Virginia Beach line. Construction is expected to start this fall, with a projected opening of fall 2015, Williams said after his presentation.

Simon hasn’t mentioned any specific retailers, he added.

Simon Premium Outlet Park would include 350,000 square feet of leasable space and generate an estimated $135 million in annual sales, Williams said. That would bring Norfolk about $3.3 million a year in sales taxes and other revenue and the state about $7.2 million.

Williams declined to disclose a sale price for the property, citing ongoing negotiations. The sale is expected to close in May.

Before that, Simon needs rezoning approvals from Norfolk and from Virginia Beach for use of property in that city for parking areas. Simon also cannot use Lake Wright for stormwater runoff, because it is a city water reservoir, so it must build two retention ponds as part of the outlet project, Williams said. Boat rentals on the lake would involve a limited number of kayaks or other nonmotor boats.

The city hasn’t determined its costs for the project and is still working on the site design, Williams said. It would make wastewater improvements and build an access road from Northampton Boulevard east of Wesleyan Drive to the outlet center, which will sit at the north side of the property. The city could try to seek a Virginia Land Conservation Foundation grant to help pay for preservation of green space, Williams said.

Simon approached the city last summer with interest in building a new outlet center, he said. The Lake Wright property gave the company proximity to the airport, highways and nearby hotels, where it could capture passing tourist traffic, Williams said.

“This is a trend in the outlet mall arena, moving to more urbanized locations.”

The Quality Suites Lake Wright hotel, which sits southeast of the golf course on Northampton Boulevard, is privately owned and not part of the Simon project, Williams said.

A city-owned, 30-acre parcel that now provides space for a driving range east of the hotel also is not part of the plan, but the city is talking to interested buyers who might add more retail space there, he said.

The Simon project also is likely to spur retail development elsewhere in the surrounding Burton Station area, which straddles Virginia Beach. Norfolk officials have communicated frequently about the project with their counterparts in the neighboring city, Williams said.

Some stores in the new outlet center might overlap with the 135 stores in Williamsburg, but the company expects it will steal customers from the other Premium Outlets, Williams said. “That’s part of their business model.”

The size of the proposed center matches that of a Premium Outlets that Simon opened in August near St. Louis, with 350,000 square feet and 90 stores. That outlet mall includes Ann Taylor, Armani, Coach, J. Crew, Kate Spade New York, Le Creuset, Michael Kors, Nike, Saks Off 5th, St. John, Ugg Australia, Under Armour and Vera Bradley stores.

During an interview Monday, Mayor Paul Fraim said, “We can expect a top-of-the-line, upscale” center.

No comments:

Post a Comment