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Mall wars

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The retail landscape in the Sarasota-Manatee market shifted significantly when The Mall at University Town Center opened in north Sarasota County Oct. 16.

The arrival of UTC has caused the three closest enclosed malls — DeSoto Square, Westfield Sarasota Square and Westfield Southgate — to make numerous changes. That goes from new local executives to a revamped mix of stores. Other changes are cosmetic, from replaced lights to refurbished bathrooms to extra fountains.

The changes are a competitive necessity, but are also part of a larger national trend. Paul Rutledge, who runs the retail brokerage group in Tampa for CBRE, cites a study that says 50% of malls nationwide are in need of a repositioning project. So Rutledge and his peers, in addition to customers and tenants, will all watch the mall wars closely. “For people in the retail industry,” says Rutledge, “this is a really exciting time.”

The following are strategies for all malls in the Sarasota-Manatee region not named The Mall at UTC.

—Mark Gordon | Business Observer

At a Glance
1. DeSoto Square Mall

• Location: U.S. 301 Boulevard West, Bradenton

• Square feet: 689,470

• Number of stores: About 75

• Year opened: 1972

• Owner: Mason Asset Management

• Anchors: Hudson’s Furniture, JCPenney and Sears

• Other stores: Bath & Body Works, Champs, GNC, F.Y.E., Kay Jewelers and Victoria’s Secret.

2. Westfield Sarasota Square
• Location: U.S. 41 and Beneva Road

• Square feet: 1,082,800

• Number of stores: 144

• Year opened: 1977

• Owner: Westfield Group

• Anchors: Costco, JCPenney, Macy’s and Sears

• Other stores: Aeropostale, AMC Theaters, Chick-fil-A, Men’s Warehouse, Ruby Tuesday and Yoder’s Marketplace.

3. Westfield Southgate
• Location: U.S. 41 and Bee Ridge Road

• Square feet: 421,778

• Number of stores: 36

• Year opened: 1956

• Owner: Westfield Group

• Anchors: Macy’s and CineBistro, a seven-screen luxury movie theater operated by Cobb Theaters. CineBistro is projected to open in 2015 in space formerly occupied by Saks Fifth Avenue. Dillard’s is still technically an anchor until the store officially closes.

• Other stores: Champs, Coach, Express, J. Jill, Pottery Barn and the Walking Co.

4. The Mall at University Town Center
• Location: Interstate 75 and University Parkway

• Square feet: 880,000

• Number of stores: More than 100

• Year opened: 2014

• Owner: Taubman Centers, Benderson Development

• Anchors: Dillard’s, Macy’s, Saks Fifth Avenue

• Other stores: Anthropologie, Apple, Banana Republic, Boston Proper, Brooks Brothers, Crate & Barrel, J.Crew, Kona Grill, Pottery Barn, The Capital Grill, The Cheesecake Factory, Williams-Sonoma.
Sources: DeSoto Square Mall, Taubman Centers, Westfield Group

Desoto Square Mall
The path to fix the problems at DeSoto Square Mall is long. But the executive behind the plan to restore a 42-year-old mall is undeterred.

The double whammies at the DeSoto Square Mall in central Manatee County, between a dreadful image and a Goliath-like competitor down the road, don’t scare Robert Tackett.

The shopping mall veteran, after all, once oversaw a mall at the intersection of one of the toughest neighborhoods in America: Martin Luther King Jr. Boulevard and Crenshaw Boulevard in south Los Angeles.

That corner was the heart of the 1992 riots. In 2007, a development group built a mall there, and Tackett, a Kentucky native with the twang to prove it, was hired to handle leasing. A veteran of other malls with Simon Property Group, Tackett says he learned more about integrating a mall into the community at that center, Baldwin Hills Crenshaw Plaza, than any other position. “I loved that job,” says Tackett. “It was a lot of fun.”

Tackett will need to keep that passion front and center in his latest task: saving DeSoto Square.

For several years, DeSoto has had an image of being in high-crime area — a reputation Tackett says is unfounded based on the latest Manatee County Sheriff’s Office data.

Past that, the tenant situation is tenuous. Anchors Dillard’s and Macy’s bolted for The Mall at UTC. Total occupancy is 82%, up from around 75% a few months ago, yet well below high performing. And the food court, a solid source of revenues for malls, has three empty spots out of eight.

The owner of the mall is Long Island, N.Y.-based Mason Asset Management, which bought it in late 2012 from Simon Property Group for $24.6 million. Mason Asset Management put the property up for auction earlier this year, but rejected a $33.7 million offer.

The move surprised some commercial real estate brokers who believe DeSoto Square’s best days are in the past. “It needs to be repurposed,” says Paul Rutledge, who runs the retail brokerage in Tampa for commercial real estate firm CBRE. “The best value would be to tear it down.”

Tackett, named general manager of DeSoto Square in September, is undaunted. His first step is to handle every situation transparently. “You have to deal with things honestly and be up front with people,” he says.

“You can’t blow smoke up people.”

At DeSoto Square, about two miles south of downtown Bradenton and 10 miles north of Downtown Sarasota, Tackett made two changes quickly. One was to clean up what Tackett calls the curb appeal, everything from palm trees to bathrooms to potholes in the parking lots.

The next priority is tenant mix. Tackett says that’s a case-by-case process of meeting with current tenants to get leads and working a network of contacts in the retail community. Tackett hopes one of the newest tenants will be a big draw: Colonial Cinemas at DeSoto Six, a movie theater complex that replaces DeSoto Dollar Movies, which closed over the summer.

Tackett is encouraged by the recent occupancy uptick and the good wishes of people who want him to keep up the fight to save the mall, built in 1972. “There are people who grew up here around the mall and raised their kids here,” says Tackett. “People don’t want to see the mall go away.”

Westfield Sarasota Square
The largest mall in the Sarasota-Manatee market won’t give up its share easily.

The future of the Westfield Sarasota Square mall could be seen in a $2,000 espresso machine. Or a solid wood casket that runs $1,800. Or even a pack of eight men’s socks for $20.

Those are three of the thousands of items for sale inside a typical Costco, which opened in the mall in summer 2012. The membership bulk quantities warehouse draws a passionate and loyal following wherever it opens a location. That’s definitely been the case at the 145,000-square-foot Sarasota Square Costco, says General Manager Scott Christensen.

“It was a little unconventional in the beginning, but it’s been a great fit,” Christensen says.

Several area commercial real estate brokers say the best chance for Sarasota Square, on U.S. 41 and Beneva Road, to grow long-term is to nab more mass-appeal retailers like Costco that are a great fit.

“I think it needs some more middle-of-the-road-type stores,” says American Property Group of Sarasota President Barry Seidel, whose main office is a mile down the road from Sarasota Square. “They need to do something to pick that up.”

Westfield executives declined multiple interview requests. In an email response to questions, Westfield says it continually reinvests in its centers. At Sarasota Square the firm specifically cites Costco and the 2015 planned opening of H&M, a Swedish-based chain known for its budget-conscious fashions and styles. Other stores that recently filed permits for Sarasota Square, say mall officials, include Rue21 and Old Navy. Those stores also cater to a budget-conscious clientele.

Sydney, Australia-based Westfield bought Sarasota Square in October 2003 from Texas-based Coyote Management for $77 million. In 2005 the firm announced a $50 million revitalization project that included new food court restaurants, a new 12-screen AMC Theater and 25,000 square feet of retail space. Built in 1975, the mall was previously renovated in 1979 and again in 1989.

“Westfield Sarasota Square is continuing to evolve following the success of Costco, catering to younger families in the area,” states the Nov. 18 Westfield email. “Westfield believes in the Sarasota market and in the future of our assets there.”

Westfield Southgate
Westfield Southgate, the area’s oldest enclosed mall, wants to reinvent itself, citing its premier western location.

Paul Rutledge remembers the hoopla in 1999 when the Town Center at Boca Raton was renovated.

The mall added a Nordstrom, and with a Bloomingdale’s, Neiman Marcus and Saks Fifth Avenue in place, it set the tone for a competitive battle to grab market share. Other retail centers in Palm Beach County fretted about the impact of the Town Center, recalls Rutledge, now with CBRE in Tampa.

Rutledge sees many parallels in what the Town Center at Boca Raton did 15 years ago and the debut of The Mall at University Town Center in Sarasota. But Rutledge says there’s hope for UTC’s competitors — if the strategies are sound and executed well.

“You can’t let UTC be the only game in town,” Rutledge says. “You have to play back and say, ‘We have this game.’”

Rutledge is mostly talking about Westfield Southgate. The mall, built in 1956, is a few miles south of downtown Sarasota and has been the go-to center in the area for decades. Saks Fifth Avenue and a few other high-end tenants left Southgate earlier this year for The Mall at UTC.

Westfield’s answer to The Mall at UTC is to turn Southgate into what officials call a “resort-style, boutique shopping experience.” Westfield executives declined multiple interview requests.

Westfield executives, in the statement, also comment on what some area commercial real estate brokers say is Southgate’s best asset: its location. It’s near downtown, at the corner of one of the busiest intersections in Sarasota County and a mile from a bridge that leads to Siesta Key. And Benderson Development recently paid $10 million for the 96,000-square-foot Dillard’s space.

“If I was to own a mall,” says American Property Group of Sarasota President Barry Seidel, “It would be Southgate.”






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