“The biggest disppointment to hit the New England retail industry during the past year was the cancellation of development activity on New Haven, Conn.'s Long Wharf Mall.”

Retailers are exhibiting increasing levels of interest in having a presence in the New England region, say both national and regional shopping center developers.

The regional upswing comes following the real estate recession of the early 1990s and a period of NIMBY (not in my backyard) activism that made zoning approvals difficult to obtain, according to Bill Fox, vice president of leasing for General Growth Properties, Chicago. “But new mall development in New England has always been more challenging than in other areas,” Fox says, “due to the lack of available sites and difficulties in zoning.”

While the population declined in the early '90s, “New England now has good demographic numbers,” says Mike Goman, president of Farmington, Conn.-based Konover & Associates, which develops community and strip centers in the region. “But it's hard to find appropriately developable sites — ones not on a hill and not rocky.”

Goman is finding “a fair bit of interest on the part of big-box retailers” to establish or expand their presence in the New England states, but the community concerns Fox mentioned make finding good sites tricky.

Konover handles community concerns with public information campaigns, Goman says. “We sit down and talk to a community, from the chamber of commerce to local environmental and conservation organizations to town planning agencies.

“These communities have had little or no development for many years,” Goman points out. “They are concerned about the impact development will have but are compelled almost to pursue economic development.”

Homeowners' property taxes don't cover all of the cost of a community's services, such as education, which typically is 75% of a town's total budget, he explains. The property taxes cover about 60 cents on the dollar and the remainder has to come from commercial development. “Faced with the increasing costs of education, many communities decide the last thing they want is to encourage more residential development,” Goman says. Instead, New England towns are looking for commercial development that supports home values.

Fitting the home values bill are big-box retailers such as Kohl's, Target, The Home Depot, Lowe's and Wal-Mart. Some of the locations where Konover is presently developing sites for this type of retailer include Auburn and Topsham, Maine; Keene, N.H.; Canton, Conn.; and Little River Plaza in Westfield, Mass.

The big boxes are driving what development there is in New England, according to Bruce Kaufman, editor of the Finard Retail Review, published monthly by Finard & Co. LLC, Burlington, Mass. Lenders are requiring that shopping center deals be secured by strong credit tenants, says Kaufman. “With retail sales trending, these are hardly ebullient times,” he notes.

But, Kaufman says, there's a desire on the part of the big boxes to penetrate New England more. “However, you won't find any open meadows here. It's more likely you'll be knocking something down or buying a bankrupt retail chain” to establish a presence in the region, he says.

Kaufman thinks Kohl's, The Home Depot and Wal-Mart will pick up some of the leases available due to the Bradlee's bankruptcy earlier this year. As higher gas prices lessen shoppers' driving distances, stores with more locations will benefit. Kaufman says Ames may be next to declare bankruptcy, if that retailer's fortunes don't improve.

Not a big boxer, but a hot retailer nonetheless, Hennes & Mauritz opened its first New England store on March 29 in General Growth Properties' 4-year-old Brass Mill Center & Commons in Waterbury, Conn. H&M is a Stockholm, Sweden-based retailer of high fashion, value-priced women's, men's and children's clothing. “The flagship Fifth Avenue store created a stir when it opened in late summer last year — they had to restock,” recalls GGP's Fox.

H&M's three New York City stores and now its 20,000 sq. ft. store in the Brass Mill Center are the vanguard of about 20 stores the international retailer is planning in the United States, says Christian Bagnoud, H&M's New York-based U.S. marketing director. H&M wants to open stores, either freestanding in the best locations or in shopping malls, between Boston and Philadelphia, Bagnoud says. In 2001, the retailer will open stores on Sept. 7 on Boston's Washington Street and in the Danbury (Conn.) Fair Mall.

Bagnoud says H&M enjoys good response from its customers because “our value for the money is very high.” H&M needs 15,000 to 40,000 sq. ft. for its stores, he says. GGP is talking with H&M about going in the developer's Silver City Galleria in Taunton, Mass., Fox says. And the retailer is going into Buckland Hills Mall in Manchester, Conn.

Other retailers that have expressed interest in New England, particularly in GGP's Natick Mall in Natick, Mass., says Fox, are Restoration Hardware, Pottery Barn, Crate & Barrel, Tommy Hilfiger and J. Crew. But since Natick Mall is 98% occupied, he says, and none of those retailers would fit in the existing space, GGP is studying potential expansion options.

Meanwhile, two new Natick Mall tenants are illustrative of another industry trend — women's fashion catalog operators opening mall stores. J. Jill opened in summer 2000 and Coldwater Creek will open in fall 2001. Fox says the J. Jill store is that retailer's first in the country, and the Coldwater Creek store is “probably its first store in New England.”

Fox says he's had some conversations with Gadzook's, a Dallas-based specialty retailer of teen-agers' clothing and accessories, to enter the New England market, and says Best Buy as well as Kohl's are “aggressively expanding into New England,” the latter typically in power centers of 200,000 to 300,000 sq. ft.

The biggest disappointment to hit the New England retail industry during the past year was the cancellation in mid-December 2000 of development activity on New Haven, Conn.'s Long Wharf Mall. New England Development of Newton, Mass., and co-developer Fusco Corp., had waged a five-year battle to develop the $500 million, 1.2 million-sq.-ft. mall. Major setbacks included lawsuits filed by rival Los Angeles-based developer Westfield America, and the pullouts, first, of Nordstrom due to the retailer's own restructuring and, second, of the city's support for the project.

Paula Stephens is an Atlanta-based writer.

This way, tourists

Tourism is playing a big role in the shopping center plans of two developers active in New England.

At The Centre of New England, Universal Properties Group Inc.'s phased 1.4 million-sq.-ft. value retail/premium outlet center along I-95 in Coventry and West Greenwich, R.I., near Providence, the developer is looking to attract some of the estimated 11 million tourists annually that visit the area.

Already open are BJ's Wholesale Club, Cracker Barrel, Wendy's and Applebee's, with Denny's Classic Diner slated for a July opening. Negotiations are under way with Starbuck's, Dunkin' Donuts and Tutor Time Child Care Learning Centers. Plans call for a 128-room Hampton Inn to open early next year.

“Rhode Island has been a historic place for tourists to visit, offering shopping in legendary Newport, serene Block Island, quaint South County and now the new and spectacular downtown Providence, which has significantly increased retail shopping,” says Lori Marchetti, director of real estate with Universal Properties. As designed by Bullock Smith & Partners, The Centre's storefronts and food courts will convey the ambience of not only New England but also international cities such as Venice, Paris, London and New York.

Plans call for an additional 600,000 sq. ft. of big-box retail, restaurants and hotels, 500,000 sq. ft. of entertainment facilities, plus assisted living and elderly housing, office, distribution, light manufacturing and R&D space, all totaling 6 million sq. ft. A bevy of tax incentives have been approved for retailers by the local townships.

Also acknowledging the importance of tourism to the success of its malls, General Growth Properties Inc. began a marketing campaign in April designed to increase tourism spending at the company's leading “destination centers.” According to the company's audit of its malls, tourists in 2000 spent more than $1 billion at its top 29 malls. GGP notes that the U.S. Department of Commerce projects global tourism will grow by 5% to 10% annually during the next decade and is positioning its shopping centers as “America's Favorite Shopping Destinations.”

New England Project Listings

Massachusetts
Project Name | City, State Developer | Headquarters Center | Project Type Current GLA* Completion Date* Anchors
The Loop
Methuen, Mass.
The Wilder Cos.
Boston, Mass.
L | N 480,000 sq. ft. Aug. 2000 Borders, Old Navy
The Home Depot
Sherwood Plaza
Natick, Mass.
Ria K. McNamara Inc.
Shrewsbury, Mass.
S | RD 268,000 sq. ft. Sept. 2001 Christmas Tree Shops,
Mars Music, MVP Sports
Riverside Plaza
New Bedford, Mass.
Ria K. McNamara Inc.
Shrewsbury, Mass.
S | N 157,000 sq. ft. Sept. 2002 TBA
The Crossroads at Plymouth
Plymouth, Mass.
Developers Realty
West Hartford, Conn.
P | N 350,000 sq. ft. Fall 2002 TBA
Shoppes at Blackstone Valley
Millbury, Mass.
W/S Development Assoc. LLC
Chestnut Hill, Mass.
L | N 780,000 sq. ft. Spring 2002 Target, The Home Depot
Stop & Shop Plaza
Norwell, Mass.
Tedeschi Norwell LLC
Rockland, Mass.
N | N 70,000 sq. ft. March 2002 Stop & Shop
Connecticut
Project Name | City, State Developer | Headquarters Center | Project Type Current GLA* Completion Date* Anchors
Berlin Crossing
Berlin, Conn.
Northeast Retail Leasing & Mgt.
Springfield, Mass.
C | RN 175,000 sq. ft.
(20,000 sq. ft.)
Fall 2001 Super Foodmart,
Ocean State Job Lot
Eastbrook Mall
Mansfield, Conn.
Northeast Retail Leasing & Mgt.
Springfield, Mass.
M | RN 300,000 sq. ft.
(8,000 sq. ft.)
Sept. 2001 T.J. Maxx, Ames Dept.
Store, JCPenney
Southbury Plaza
Southbury, Conn.
Gatto Development
Southbury, Conn.
S | N 210,000 sq. ft.
(43,726 sq. ft.)
Dec. 2001 Kmart, Stop & Shop
Fairfield Center
Fairfield, Conn.
Starwood Ceruzzi
Fairfield, Conn.
S | RD TBA TBA Borders, Victoria's Secret,
Ann Taylor Loft
Vermont
Project Name | City, State Developer | Headquarters Center | Project Type Current GLA* Completion Date* Anchors
Maple Tree Place
Williston, Vt.
Starwood Ceruzzi
Fairfield, Conn.
L | N TBA TBA Best Buy, Shaw's,
Dick's Sporting Goods
Rhode Island
Project Name | City,State Developer | Headquarters Center | Project Type Current GLA* Completion Date* Anchors
The Crossing at Smithfield
Smithfield, R.I.
W/S Development Assoc. LLC
Chestnut Hill, Mass.
L | N 600,000 sq. ft. Summer 2002 Kohl's, The Home Depot,
Target
Maine
Project Name | City, State Developer | Headquarters Center | Project Type Current GLA* Completion Date* Anchorsth
Wal-Mart Supercenter
Auburn, Maine
Konover Development Corp.
Farmington, Conn.
P | N 355,760 sq. ft. Spring 2002 Wal-Mart
Center Type: S=Strip Center, N=Neighborhood Center, C=Community Center, M=Regional/Superregional Mall, P=Power Center, O=Outlet Center, L=Lifestyle Center, F=Fashion/Specialty Center, MU=Mixed-Use Development. Project Type: N=New Project, E=Expansion, RN=Renovation (updating look, refacing, common area or amenities upgrade), RD=Redevelopment (demalling or remerchandising). Completion Date*: Subject to change. Existing/Planned GLA (Expansion GLA): GLA=Gross Leasable Area. TBA=To be announced/unavailable.