Outlet mall duel in Chesterfield takes a surreal turn

2012-07-12T00:10:00Z 2012-09-10T09:07:08Z Outlet mall duel in Chesterfield takes a surreal turnBY KAVITA KUMAR • kkumar@post-dispatch.com > 314-340-8017 stltoday.com


CHESTERFIELD • About a dozen men in suits and hardhats, gripping gold-colored shovels, stood Wednesday morning near a white tent as a musical trio readied to entertain the small crowd.

They had arrived from around the country to pose for the obligatory groundbreaking photos, turning those first shovel-fulls of dirt that usually signify a done-deal development. They proclaimed that St. Louis Premium Outlets in Chesterfield would be open for business by next fall.

But at the same time, just a few miles down Highway 40, excavators were moving around dirt on the site of a competing outlet mall development, slated to open about that same time. That project will hold its own ceremonial groundbreaking in two weeks -- even though both developers have said Chesterfield can support only one outlet mall.

The surreal scene had even the mayor of Chesterfield baffled as he surveyed the continuing brinkmanship, unsure of how it would end.

“I’ll be honest with you: I don’t know,” said Mayor Bruce Geiger. “I would have thought by this point in time that it would have been resolved and one would have prevailed and the other one said, 'OK, thank you very much, but I’m going somewhere else.' That hasn’t happened.”

To the contrary, at this critical point, both sides claim they're getting ready to start building.

“We are focusing on our property,” said John Klein, president of Simon Property Group’s premium outlets division, which is spearheading the St. Louis Premium Outlets project. “We have our plans and we’re proceeding according to our plan and starting construction now. They need to make their own decision.”

He said site work would begin within days, but physical walls wouldn’t start going up for another few months.

Experts say that the winner will likely be the developer who lines up the most and best tenants.

By that measure, Geiger noted, Simon Property Group seems to have pulled ahead, announced a couple dozen retailers who have committed to the project, including Saks Fifth Avenue’s Off 5th, a retail heavyweight. A spokeswoman said those retailers have leases that have either already been signed or are being finalized.

But Linda Humphers, who tracks the outlet mall industry for the International Council of Shopping Centers as editor of Value Retail News, cautioned not to read too much into the fact that the competing project by Taubman Centers has not yet announced tenants. Developers have different protocols -- some wait up until a couple months before opening before announcing retailers, even though they may have firm commitments, she said.

“It could very well be that Taubman has tenants and they’re proceeding in a different way,” she said.

Karen MacDonald, a spokeswoman for Taubman Centers, said in an email that the company typically doesn’t announce retailers until a year out. But she said they would announce tenants at its groundbreaking ceremony on July 25.

Taubman Centers is planning a $150 million outlet center to be called Taubman Prestige Outlets Chesterfield located across from Chesterfield Commons. That project is a further along in terms of construction and began site work in April. It plans to begin utility and foundation work followed by physical wall construction after the groundbreaking ceremony.

The Simon project is located a couple miles further west near the Daniel Boone Bridge. Simon has formed a joint venture with Woodmont Co. and says it will invest more than $100 million. This project has also received approval to create a special taxing district to bring in an extra $30 million through an extra 1 percent sales tax.

During Wednesday’s groundbreaking ceremony, there was no mention of the competing project. Instead, Simon and Woodmont officials focused on their own development. They said the center would draw about 3 million visitors a year, do an estimated $130 million in sales, and bring in 800 construction jobs as well as 800 retail jobs.

A number of retailers such as Brooks Brothers, Elie Tahari, Tommy Hilfiger, and Nine West have already committed to the project. On Wednesday, officials added nine more retailers to that list, including Carter’s, Reebok, Sunglass Hut and Crabtree & Evelyn.

Humphers said she wouldn’t dare guess who who will win this battle. She said it might take another several months to get worked out.

Geiger noted that both sides are made up of shrewd business people.

“Simon is huge -- the world’s largest real estate company,” he said. “And Taubman is no slouch. They are going to make a business decision.”

In any case, he added that city staff will be relieved when the situation is resolved.

“It’s been a tremendous burden, because in essence we’re doing two projects,” she said. “So I know our staff will be happy when it’s all said and done.”

Kavita Kumar covers retail and consumer affairs for the Post-Dispatch. She blogs on Consumer Central. On Twitter, follow her @kavitakumar and the Business section @postdispatchbiz.

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