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Oakway Center Turns A New Leaf

Reassessing location and demographics, McKay Investment Co. gives a small center a big overhaul and a new lease on life.

When it was built in the 1960s, Oakway Center stood out as the first enclosed mall in the northern suburbs of Eugene, Ore. Thirty years later, its novelty was long past, and the number of new customers had stalled due to the center's outdated look and tenant mix.

Oakway Center has always had low vacancy rates, according to owners McKay Investment Co., a family-owned business in Eugene. In January 1995, when McKay took on the task of renovating the center, the property was 93 percent occupied. Nevertheless, it had become a "B" property, and McKay set out to invent a new, upscale image for the center and to restore it to an "A" quality holding.

Sizing up the possibilities At 150,000 sq. ft., Oakway Center is dwarfed by Valley River Center Mall (1 million sq. ft.) and Gateway Center Mall (750,000 sq. ft.), both of which are located within miles of Oakway. For McKay, it was not feasible to transform Oakway into a regional competitor, but it was essential to renew the property.

"Because of its size, Oakway Center can't compete with the regional malls," says Steve Korth, a general partner for McKay Investment Co. "As a result, it has always been more of a local shopping center."

"We decided to redevelop the property because it has the best location in the Eugene-Springfield area," adds general partner Linda McKay Korth. "We wanted to find a way to put the property to its best use."

Located on a 25-acre, triangular parcel of land, Oakway Center is bordered on all sides by traffic-bearing roadways (Oakmont Way to the north, Coburg Road to the east and Oakway Road to the west). About 65,000 cars per day pass through one of the intersections, and, at a nearby Interstate 105 interchange, 50,000 cars pass per day.

McKay reports that, within a 5-mile radius of the center, the population is 190,000 people. Family income within that circle averages $39,000 a year, and, within a 1-mile radius of the center, average family income rises to $74,000.

With those numbers, the prospects for Oakway Center's rebirth could not be ignored. "We knew that we were under-utilizing the property," says Steve Korth. "The location, demographics and traffic counts all suggest that it can do better."

Where to begin? The possibilities for change at Oakway were numerous in 1995. The center's exterior comprised a dated brick facade and a mansard roof accented with brown, metal fascia. Inside, the effect was equally worn: Cookie-cutter, glass store fronts lined the mall, topped off with acoustical tile ceiling that was accented with a little too much blue for today's tastes.

Cosmetics were not the only challenge, however. In addition to renovating Oakway Center, McKay decided to redevelop the site upon which it sits.

According to Linda Korth, during the site's original development, zoning issues forced sporadic building and mixed uses that combined to create a conceptual and parking tangle. Redevelopment, which began with the Oakway renovation and will continue for six or seven years, will produce a site in which retail and office space are more clearly delineated.

Retail will dominate the acreage and will be situated on the southern portion of the property, closest to the busiest intersection: Oakway Road and Coburg Road. Offices will be located to the north, along Oakmont Way.

Trying on a new skin Phase I of the Oakway Center renovation, which focused on the west wing of the mall, is essentially complete. Spearheaded by Oslund Design Inc., Eugene, the $2 million project involved redesigning the center's exterior, interior and signage to create a contemporary, upscale atmosphere.

"We started by ripping off the facade on the west and north sides," says Carl Oslund, president of Oslund Design. "Underneath was a tilt-up concrete slab in very good structural condition.

"We applied a warm, French gray EIFS skin and built a steel and glass canopy around the building. For the main west entrance, we designed a glass tower, sort of an external atrium. It is very visible at night, creating a kind of billboard for the center," he notes.

At the northern entrance to the mall, Oslund followed up the design of the main west entrance with a shorter glass tower.

Inside, Oslund redesigned Oakway Center's western and northern common area corridors. The new floor features gray and black ceramic tile with oak wood trim. Natural light floods through the new ceiling, which accommodates three new 10 ft. x 36 ft. skylights.

Along with the center's new look, Oslund designed a graphics program that incorporates an oak leaf logo -- a recreation of the center's new exterior signage.

Getting there, staying there As Oslund began the Oakway renovation, architects and contractors began re-working the site by redirecting traffic and parking, and installing new landscaping and outdoor lighting. Larry Gilbert, a principal with Cameron McCarthy Gilbert Landscape Architects (CMGL), Eugene, reports that his company's first assignment was to simplify traffic flow and improve safety for pedestrians and bus riders. According to McKay, both tasks were achieved by reducing the number of access points to the center and realigning the parking areas.

Redesigned entrances will move traffic into a ring road (or, more properly, a ring lane) around the mall. Parking lots are situated on both sides of the ring, creating separate parking for the offices and retail.

In addition to re-routing traffic at the site, CMGL was charged with the task of exterior landscaping. Using the idea of a campus as his guide, Gilbert designed landscaping that features expanses of grass and gardens.

To move pedestrians through the "campus," CMGL is installing walkways delineated by lights, bollards and brick paving at traffic intersections. Stainless steel compasses set into the walkways near each mall entrance will help shoppers navigate the site's retail offerings. Decorated with the Oakway Center leaf logo, each compass displays a "you-are-here" symbol.

New look to new leases During completion of phases I and II (the west wing renovation of Oakway Center and the parking redevelopment), Oakway Center and its tenants remained open for business. Tenants have supported the project, says Linda Korth.

"Redevelopment is much more difficult than development," she explains. "The noise and the dirt create concerns for the tenants, but ... the tenants have become involved in our vision for the center, and we are getting wonderful cooperation."

To complement its new upscale appearance, Oakway Center also is retenanting. For that task, McKay has appointed Alan Evans, a partner with Prichard, Evans and Elder Inc., and Tim Campbell, principal for Campbell Co., both of Eugene.

"As we move the center away from its roots as a neighborhood center, the goal is to attract regional and national retailers that aren't presently in our market," Evans says. "We also want to take advantage of the demographics and the location and offer opportunities to retailers already in the area."

Working with McKay's renovation plan, Evans envisions the mall with several 5,000 sq. ft. to 10,000 sq. ft.anchors, each with an exterior and an interior entrance. The remaining 30 or so smaller shops will operate with interior store fronts.

Jim Ivory, president of Eugene Athletic Supply Co., found the concept so attractive that he became the first anchor for the renovated west wing. His 7,500 sq. ft. store is located just inside the west tower. "We were attracted to this site because of the location and access," he says. "In addition, the growth of the Eugene community is here in the north."

For Ivory, making the move represented a significant risk. Eugene Athletic Supply spent 22 years in its previous downtown location and has become a regional institution.

"The financial impact of the move has been incredible," he reports. "We have been here since December 1995. Sales for our first year here increased by more than 30 percent over the previous year.

"The growth is continuing," he notes. "Last year, our sales were $310 per sq. ft. This year, sales should increase to about $360 per sq. ft."

Transformation is ongoing As McKay begins to realize the returns on phases I and II of Oakway Center, plans are set to continue redevelopment. For example, construction has begun on the west wing facade and will be followed by the start of the north wing renovation. Next spring, the east parking area will be redeveloped.

As it continues to redevelop and redefine its image, Oakway Center illustrates a common dilemma for shopping center owners: Redevelop or die. In an industry of powerhouse developers and sprawling megaplexes, the prospect of redevelopment becomes even more daunting for the smaller player.

With Oakway Center, McKay and its team of locally based designers are reaching their goal: to transform a dwindling neighborhood center into a vibrant hub. With a prime location, a new, upscale look and impressive demographics, Oakway Center appears to be poised for 30 more years of lively retailing.

Michael Fickes is a Baltimore-based freelance writer.

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