I had a pleasant chat today with two representatives of Simon Property Group, in town to unveil a concept for redevelopment of University Mall, which Simon manages under a ground lease with 20 years to run. The landowners and Simon are in court, with landowners arguing that Simon hasn't lived up to its commitment to provide a fully tenantable mall. Simon contends it has done all it can, but says the market has changed and the best plan now would be to raze the mall and build something new.
Specifics?No drawings will be released until tomorrow morning, when the Midtown advisory committee gets a first look. There'll be a news conference later in the day.
It will be a mixed use project. 1) Retail, with an anchor tenant like a Target, with "junior anchors" that might be a bookstore, home store or the like 2) restaurants; 3) offices, probably geared to a medical community demand that the neighboring St. Vincent Medical Center believes is greatly needed; 4) an unknown number of residences, likely in a high-rise.
There are 27 acres to develop. It will look "more vertical than horizontal," said project director Scott Richardson. Some of the parking will be in decks, with small amounts for store-side parking. Some offices will be built on top of retail, just as was once done on Main Streets across America. In all, there will be more square feet to lease than the 600,000 square feet in University Mall, but the footprint of the buildings will be decidedly different and the amount of retail will be smaller, though much more will be devoted to other uses. There will be more green space. Simon is interested in working to provide a pedestrian bridge to link the property with the main St. Vincent campus across University Avenue.
Once this concept is aired -- and it presumably will meet with general approval from the Midtown advisory panel -- Simon will draw up a concrete proposal for the landowners within 30 days. Simon would prefer to buy the property, but Richardson said it was also open to a new lease agreement. What's the magic number for both sides? That's not known. Simon has had no recent discussions with the owners, who include the Cella family of Oaklawn Park fame, outside of the courtroom exchanges through lawyers.
Rough timetable: Finish planning in 2007 and begin construction in 2008. J.C. Penny has a lease in the mall through Jan. 31, 2008, so the mall can't be razed before then. Penny is expected to move to western Little Rock
Simon's friendlier public relations face can't hurt its effort. It was uncommunicative during the late Summit Mall controversy and as University Mall fell on hard times. A popular redevelopment plan could put pressure on University Mall landowners to come to the bargaining table with Simon. Simon has leverage, too, through the 20 years left on its land lease, presuming federal Judge George Howard doesn't decide to allow the land owners to terminate it.
It's a high-stakes game. The good news is that the world's largest shopping center developer sees sufficient value in what is now a troubled, unattractive property to try to make an expensive redevelopment work. Others undoubtedly share that view. That spells hope for the neighborhood.
Oh, yes. It's premature, the Simon rep said, to say whether Simon would be interested in tax increment financing to aid this project. But, yes, they've used it elsewhere in the U.S.