Arguably, the country doesn't really need another strip center or regional mall featuring more national chain stores. But don't try telling that to Mark Fallon of Cincinnati-based Jeffrey R. Anderson Real Estate Inc.
At the moment he is in the midst of leasing Rookwood Commons, a 321,000 sq. ft. open-air center featuring many well-known, high-end specialty retailers. The center, slated to open in spring 2000, is situated in Norwood, Ohio, an incorporated city that's surrounded by some of the Cincinnati metropolitan area's most affluent neighborhoods.
Jeffrey R. Anderson's retail portfolio is small, but potent. To date, the company has a handful of local properties, most notably its successful Rookwood Pavilion, opened in 1994 on the site of a former machine tool factory in Norwood. Made up of several buildings including new and old, the existing center is anchored by T.J. Maxx, Home Goods and Stein Mart, along with one of the country's largest and most innovative independent bookstores - Joseph-Beth Booksellers. The site also features a Don Pablo's restaurant, whose adaptive reuse of a retained two-story building now serves as the chain's prototype.
Fallon spoke with Shopping Center World about achieving critical mass and creating a right-sized retail world by editing the number and kind of stores people want in their neighborhood.
SCW: Rookwood Commons features many national retailers that have stores in existing malls only five or six miles away. For example, there's already Banana Republic, Gap, Talbots and AnnTaylor units in nearby centers. Why were these retailers attracted to your development when they seem to have the market covered in successful enclosed centers?
FALLON: First, our mission statement for Rookwood Commons talks about creating a lifestyle, urban shopping venue completely different from the traditional mall experience. A traditional mall typically has about 180 tenants running the gamut, from high-end department and specialty stores to dollar stores. Add to that a food court with 15 fast-food restaurants, kiosks selling items made at home and an eight- to 10-screen theater, and what you have is not exactly a stress-free shopping experience. The reality is, most customers shop only 10 to 15 of those stores consistently.
Rookwood Commons was conceived to feature only the best tenants from the best mall in town coupled with new, unique tenants in a safe, fun and convenient atmosphere - complete with outdoor music, great landscaping,fountains, unique architectural design.Given the size of the center, we decide d that 50% of our mix would be the real reason people travel to the best mall in town - in this case, Kenwood Towne Centre. The other 50% would be retailers that people have seen only when they travel to New York,or out West. So, for every existing Cincinnati tenant we identified, we approached a retailer new to the market. What we have created is a place where, for example, Banana Republic and Gap would be next to other premier players in their respective categories, rather than surround them with those only there to feed off their great drawing power.
At Rookwood Commons, Banana Republic is next to Talbots and across from Abercrombie & Fitch, which is adjacent to Anthropologie. These are a stroll away from Wild Oats Market and from Sur La Table, where customers will see AnnTaylor and Barnie's and Origins. Meanwhile, they're a hop, skip and a jump from P.F. Chang's, which we feel is the best of the gourmet Chinese restaurants.
SCW: So, then, finding great restaurants was another of your marketing initiatives?
FALLON: Right. After we signed P.F. Chang's, we asked them who else they like to have around them. We finishedwith Buca di Beppo, which we believe is the best in the family-style Italian sit-down category. We did a deal with J'Alexander's, which we feel is the best in that medium- to fine-dining category. We believe that Max & Erma's is the best in Ohio of the American fair.
Because these restaurants are the best in their categories and we know the demand will create waiting time - sometimes one to two hours - the center is designed so that they can visit shops, grab a coffee, or just sit back and enjoy the common areas.
SCW: You've mentioned Anthropologie and Sur La Table - these are new to the Cincinnati market, and actually new to the Midwest. Why did these retailers opt to go with your urban center? Wouldn't a superregional mall be less risky?
FALLON: It's true we have been successful in attracting new retailers to the market - specifically, Z Gallerie, Anthropologie, Sur La Table, Wild Oats, Origins, Zany Brainy, Bed Bath & Beyond and others - because those tenants prefer not to join the mall circus atmosphere.
Many of those tenants have a clearly defined customer who is educated with a desire for better-quality products. It's important to these retailers that they not be seen as homogenized.
Here, the outdoor urban atmosphere has provided them the opportunity to design their stores however they would like to mimic the pedestrian shopping districts of Santa Monica (Calif.) or Scottsdale (Ariz.) or San Francisco, where many of these retailers have had success.
SCW: In terms of the lifestyle approach you're taking with Rookwood Commons, you have plenty of apparel and home fashions stores. You have also attracted a good number of restaurants. Why is there no multiplex theater component?
FALLON: We didn't believe theaters were necessary to create traffic. Theaters are a "nice to have," but any way you look at it, theaters are big parking users. Also, because this is a very expensive urban site with the property alone costing in excess of $17 million, there was really no room for a theater. And it was not a demand tenants made of us because they've found that the theater customer is not necessarily their same customer.
There is already a very successful freestanding theater about two miles away. The economics and the footprint size were really the constraints. And though you see theaters on a number of plans for lifestyle centers, I think we were fortunate it wasn't a requirement.
Instead, we have signed one of the best grocery stores in the country with Wild Oats Markets. We believe that once customers experience Wild Oats in Cincinnati, they will drive a long way to shop there a couple times a week.
We also feel this is the same customer who will choose to eat at P.F. Chang's, J' Alexander's or Buca de Beppo in the evening. So now we've created a place people continue to visit several times weekly rather than what is typical with the superregional shopping mall, which is a couple times a month at best. As I mentioned before, we see these restaurants helping to drive traffic to the specialty stores, and vice versa.
SCW: How did you sell the city of Norwood, Ohio, on the concept of yet another development?
FALLON: Basically, we told them we were taking Rookwood Pavilion to the next level with our concept for Rookwood Commons. We explained what we wanted to do was not a typical strip center. We showed them The Summit in Birmingham, Ala., developed by Bayer Properties, and The Shops at Memphis developed by Pugh McKewin and visited other neighborhoods, such as SoHo in New York City and areas of San Francisco.
We took the best aspects of all those projects and places and pieced them together, and then we presented them as a lifestyle center we could develop adjacent to Rookwood Pavilion. After traveling to some of these developments themselves, city officials became very active in getting approvals.
Fortunately, we own Rookwood Pavilion. Although it has more of an off-price/better-value tenant mix, the city is very happy with our existing architectural look as well as its success. I should mention, too, that as part of the lifestyle center concept, we're building a 160,000 sq. ft. office tower. That's very positive for the city as well.
SCW: How did the tenants you targeted respond?
FALLON: Well, the level of tenants we have would not go into a typical strip center. They needed to know it wasn't going to be anything like a strip center, as we promised. In fact, we said, "Take your storefront and treat it like a freestanding building." We're encouraging them to create something more like an older urban downtown area. We're letting them use their creative juices to design whatever they'd like, within reason. And the city has signed off on that too. We are anticipating - and have already seen - some initial wild-looking elevations.
SCW: What plans do you have to market Rookwood Commons? Do you plan to offer any loyalty or frequent shopper programs?
FALLON: Our existing Rookwood Pavilion is probably the No. 1 outdoor shopping center in the tri-state area (Ohio-Kentucky-Indiana). We've not been marketing it other than just making it a great place to shop. Ultimately, we plan to market Rookwood Commons more in conjunction with tenants, allowing them to showcase the fact that they have events such as a sale or classes.
So, we are not charging a marketing fee. I don't think you need to charge tenants to buy radio or television advertisements to tell everyone that it's Mother's Day or Christmas. Our customer is more sophisticated. They know what day it is.