Retail Traffic

Retail Ropes Mountain States

The cowboys of yore yearned for a home where the buffalo roam. Today, they're searching for a relaxed western lifestyle that's just a short drive in the SUV from some serious shopping.

"These ex-urban cowboys have chosen to live in a part of the country where they don't have to compromise to have a western lifestyle," says Mary Beth Jenkins, president of Denver-based The Laramie Co., a retail consulting, brokerage, sales and leasing firm. "They want that lifestyle with all the comfort of big cities, and that includes retail and entertainment amenities."

The West has long been characterized by its boom-bust cycle. The prosperity currently marking the retail climate of the mountain states - including a healthy economy and a population influx - has brought new development to Colorado, Utah and Idaho. Yet for these states, the memory of the last bust always lingers. Hoping to avoid a smattering of retail ghost towns, municipalities have become more involved in development throughout the region, ensuring that new projects in these cities have staying power.

Colorado Park Meadows Towne Center raised the bar for retail development in Colorado. Now that the mall has proven a success, retailers and restaurants alike are clamoring for more space in Colorado.

The 1.6 million sq. ft. shopping center south of Denver opened in 1996, introducing national chains such as Nordstrom and Dillard's to the Denver metro area. Upscale restaurants like P.F. Chang's China Bistro soon followed suit. The next stop for these shops and eateries is FlatIron Crossing, Westcor Partner's development scheduled to open Aug. 11, 2000.

"Park Meadows focused national retailers on Colorado and Denver in a major way," recalls David Scholl, senior vice president at Phoenix-based Westcor Partners. "In a way, nothing really exciting happened here for a decade. But Park Meadows has energized the entire industry here."

Without a doubt, FlatIron Crossing is the most significant project currently under development in Colorado. The 1.5 million sq. ft. shopping center has already signed on four anchor department stores: Nordstrom, Dillard's, Lord & Taylor and Foley's. Other tenants include Crate & Barrel, Eddie Bauer, Galyan's Trading Co., Gap, Banana Republic and Old Navy.

Park Meadows and FlatIron will flank the city of Denver, with the former about a 20-minute drive south of downtown, and the latter 20 minutes north, about halfway between Denver and Boulder.

Following Park Meadows' efforts to bring the feel of a mountain ski lodge to its self-proclaimed retail resort, Westcor is also striving for an environmentally conscious design at FlatIron Crossing. The mall will feature massive doors that allow shoppers to feel the Colorado breezes. Plans call for a pair of large greenbelts that will put the "park" back in parking lots.

But perhaps the most interesting element of the FlatIron design is the adjacent FlatIron Village, an outdoor promenade hosting shops and restaurants and anchored by AMC Theatres.

"When we went into Boulder County, we had to address what this market wants out of its shopping experience," says Scholl. "The local person wants indoor and outdoor. We've got a unique design here, and the rest of the country is anxiously watching what we do."

FlatIron Village will run about two blocks long and feature 230,000 sq. ft. of retail, restaurant and entertainment options. Already signed on for the project are P.F. Chang's China Bistro, Gordon Biersch Brewing Company and a Denver-based home furnishings shop called Djuna.

While both FlatIron Crossing and FlatIron Village were conceived by Westcor, a third element, FlatIron Marketplace is being developed by Newport Beach, Calif.-based Koll Development Co. The mixed-use complex will feature a hotel and office space as well as a nearly 445,000 sq. ft. retail and restaurant component.

"It's a great land use strategy to have Westcor as our partner," says Greg Mickelson, a partner in charge of retail development in the Western states at Koll Development Co. "This interchange will have a lot to offer."

Mickelson expects FlatIron Marketplace to be segmented into specialty pads, with retailers grouped by category. Tenants slated for the Marketplace range from The Great Indoors to toy merchant Zany Brainy and Nordstrom Rack. Buca di Beppo and Bahama Breeze will lead the restaurants at FlatIron Marketplace.

"We see families from Boulder hopping in the Range Rover and driving to shop at Nordstrom, and coming over here and eating at Bahama Breeze before they head over to the movie theater at the Village," Mickelson says.

The three components of FlatIron will be connected via a highway interchange and public transportation. A shuttle will travel between the shopping and the nearby Interlocken Advanced Technology office park.

"The customer of the region demands a choice of retailers and a choice of centers," Mickelson says.

Economic indicators point to a strong retail environment in Colorado, but transportation has emerged as the issue developers must face when planning projects in the Denver area.

"Traffic and transportation in general is a huge issue," Mickelson says. "But it's an issue the city of Broomfield tackled early in the planning."

The city of Broomfield is banking on residents using public transportation to shuttle between FlatIron Crossing and FlatIron Marketplace. Bike paths will connect neighboring housing developments with FlatIron Crossing and the adjacent office park.

However, traffic to and from the mall isn't the only route where transportation is an issue; it is a concern throughout the entire region. Alternative transportation - such as light rail, connecting cities and suburbs within Colorado - is also serving to impact the state's retail scene.

"Denver has become bottlenecked in certain places," Jenkins says. "Transportation will be needed simply to make towns livable, and development will incorporate that today and in the future."

Utah Light rail has recently emerged on Utah's retail scene as well. In Salt Lake City, light rail connects downtown and the suburbs, theoretically providing suburbanites easier access to downtown shopping. But despite this investment in infrastructure, many downtown Salt Lake City merchants are concerned that suburban development will bring national retailers closer to the places where people live.

"Light rail has only been around for two months, so its impact remains to be seen," says J. Floyd Hatch, director of the Mountain States chapter of the ICSC, and the owner/manager of Intermountain Development Group in Salt Lake City. "But it's not reason enough for downtown retailers to relax. There is a lot of suburban development on the horizon that has them concerned."

The biggest development is The Gateway, developed by Salt Lake City-based The Boyer Co., and scheduled to break ground in 2000. The 2.5 million sq. ft. urba n mixed-use development will include 675,000 sq. ft. of retail and entertainment as well as hotel, office and residential space. The Gateway, slated to open in time for the 2002 Olympic Winter Games, will be centered on Salt Lake City's historic Union Pacific Station. "Right now it's a real tenant-driven environment in Utah," Hatch says. "The developers will build where the tenants tell us to."

Another suburban power center - West Jordan Landing - is closer to opening. Anchored by a movie theater megaplex, the mixed-use complex by Salt Lake City-based Gross Development will offer a blend of retail, restaurant and entertainment that has several national retailers interested.

"Utah is generally business-friendly, and the economy supports a good quality of living and a well-educated workforce," says Koll's Mickelson.

But perhaps the biggest story in Utah right now is consolidation. Home to major grocer Albertson's, Utah has seen roll-ups in a variety of industries impact the retail scene. "These are not just huge mergers like Albertson's and American Stores," Hatch says. "We're seeing mergers with everyone - grocers, drugstores and restaurant chains."

With the consolidation, retailers will compete for corner sites as never before, Hatch says. Regional mall development isn't driving retail in Utah. Rather, its the power centers like Gateway and West Jordan Landing that shoppers and tenants are demanding. And developers seem to be responding.

"What we're seeing in Utah and Idaho is the emergence of these second cities," says Jenkins of Laramie Co. "We're seeing the areas between the big cities supporting mixed-use complexes."

However, the challenge within these second cities is the increased involvement of municipalities when it comes to development plans.

"I am finding when I go to cities with a project, the entitlement process takes two to three times longer than it did only three years ago," Hatch says. "The goal is to build something that works so it is a positive thing that has more citizens involved. However, the process of working with the cities is more time-consuming."

Idaho As in Utah, the emergence of suburbs in Idaho has marked the retail climate in the past year. National retailers and restaurant chains are finding that the urban cowboys of Idaho will get in their cars and drive an hour to combine shopping, dining and movie-going into a single experience. Consequently, entering a market of 30,000 people is less risky for retailers, due to the depth of pull a center has.

Although consumers will go to regional malls, they prefer to shop at smaller sites, Jenkins says. "We're seeing more limited power center development as opposed to regional malls."

With entertainment mixed-use concepts scattered throughout the state, it seems movie theater megaplexes are emerging as the key anchor to attract shoppers.

"It's a different thought process, but these centers have 2% vacancy rates, and that makes a smaller market much less scary," says Jenkins. In fact, the Edwards megaplex located in the small town of Haley, Idaho, is one of the company's most successful sites nationwide.

"That Edwards theater is making history," says Ken Benoit, director of leasing at Hawkins-Smith Commercial Developers in Boise.

As businesses continue to see value in the quality of life afforded by the mountain states region, well-paying jobs will fuel the population growth that will ultimately drive retail development.

However, the western lifestyle that attracts these residents will be jeopardized unless infrastructure issues, primarily traffic, are addressed. Municipalities and developers will continue to work together to ensure the new projects and redeveloped centers truly fit community needs.

"There are a lot of opportunities throughout the region," Jenkins says. "The West is ecologically responsible in terms of development. It will be the front-runner when it comes to addressing what needs to be done to make these towns livable."

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