Phoenix Premium Outlets near Chandler didn't have effect on city's bottom line

Michelle Mitchell, The Republic | azcentral.com 12:21 p.m. EDT March 14, 2014

When an outlet mall opened just outside Chandler city limits, city officials feared that the shopping center would impact the city's bottom line.

Nearly a year later, sales-tax receipts from the holiday season show that didn't happen.

"We're not seeing that it's really impacting the city at this point, at all," said Dawn Lang, Chandler's management-services director.

Phoenix Premium Outlets opened in April 2013 on the Gila River Reservation, near the Interstate 10 and Loop 202 interchange.

In anticipation that the new stores would draw shoppers from the city, Chandler factored a $750,000 drop in sales-tax revenue into its 2013-14 budget. That amounted to about a 15 percent reduction in revenue from the shops, movie theater and restaurants near the Chandler Fashion Center, although a small percentage of the city's overall sales-tax revenue of about $93 million.

"We were being cautious in putting a reduction in assuming that it would have that impact, but we're just not seeing it," Lang said.

The 2014-15 budget is based on the actual revenue received so it will not factor in any drops attributed to the outlet mall, Lang said.

Overall sales-tax revenue in January 2014 was about the same as receipts for the same period in 2013.

Taxes from retail, which contributes about 45 percent of the city's overall sales tax, restaurants and amusements categories were all higher than the historical trend, according to city budget documents.

Chandler also received about 10 percent more in sales-tax hauls through the second quarter than it expected in its budget.

Strong sales-tax collections contributed to the city's overall general-fund revenue coming in higher than expected through the second quarter of 2013-14.

"High consumer confidence and a steady stream of new development activity in Chandler" contributed to the strong numbers, according to city documents.

The Phoenix Premium Outlets is a "shopping destination" that attracts Valley residents and visitors and helps to drive traffic to the Chandler area, said Maura Eggan, vice president of marketing with Simon Property Group, which owns and operates the outlets.

Since the outlets opened, 14 new stores have been added to take it to full capacity, Eggan said. The stores include Cole Haan, Kate Spade, Movado Company Store, Polo Ralph Loren Factory Store and Starbucks.

Chandler Fashion Center is optimistic about sales in 2014, said Munira Smith, a spokeswoman for Chandler Fashion Center.

Retail sales are projected to increase about 4 percent in 2014, according to the National Retail Federation.

"There's definitely room in the market for both an outlet and a regional mall," Smith said.