Two Outlet Mall Projects Compete for Chesterfield Location

Two outlet mall projects compete for Chesterfield location


BY KAVITA KUMAR kkumar@post-dispatch.com 314-340-8017 | Posted: Friday, October 7, 2011

The race to build a new outlet mall in the St. Louis region is officially on.

It's a competition sweeping across the country as developers try to capitalize on the rising popularity of outlet malls among economy-battered consumers.

The showdown here is taking place in Chesterfield, where two projects for mid- to high-end outlet malls have been proposed less than five miles from one another.

On Thursday, more light was shed on one of those proposed projects. Standing before an artistic rendering of the Spirit of St. Louis Outlets, the backers of that plan said they envisioned an $85 million project that will entail 555,000 square feet of retail space on the south side of Highway 40 (Interstate 64), just east of the Daniel Boone Bridge.

It would feature a "racetrack" style, open-air layout with about 250 stores. They hope to break ground next summer with an opening date set for fall of 2013. St. Louis is a great location for such a project because it does not have a true, modern outlet mall, said Stephen Coslik, chief executive of Texas-based Woodmont Co., which is developing the project.

"It's perceived to be one of the few outlet markets in America that's not presently being served," he said.
He later added that the St. Louis Mills was more of a hybrid of outlet and full-price stores while the struggling outlets in Warrenton follow an older outlet concept that is nearly 60 miles west of St. Louis.

The other contender vying to build an outlet mall is Michigan-based Taubman Centers, which has been primarily known as a developer of upscale malls. But it has recently chosen outlet malls as one of its areas for expansion. It has formed a joint partnership with Outlet Partners and wants to build "Chesterfield Outlets" -- a development of up to 500,000 square feet along the North Outer 40 Drive, just east of Boone's Crossing. That project will be reviewed by the city's planning commission next week.

A spokeswoman for Taubman Centers could not be reached for comment.

But Aimee Nassif, Chesterfield's planning and development director, said the developers had told the city they hoped to have 115 stores and to open by early 2014.

"At the end of the day, you'll see one of these two centers happen," Coslik said.

What's happening in Chesterfield is called a 'site fight," said Linda Humphers, who tracks the outlet mall industry for the International Council of Shopping Centers as editor of Value Retail News. It's a fight, she said, that is taking place in metro regions such as Chicago and Phoenix as mall developers hustle to be part of the boom in outlet centers at a time when traditional mall development has all but come to a halt. There are between 40 and 50 new outlet centers planned in the next few years. But many of them won't get built. She expects about five or less new outlet malls to open every year.

So who usually wins these fights? Humphers said it often came down to whichever one is the bigger developer and who can get it done the most quickly. In this case, though, both developers have a long and respected history in retail.

"I would say it's a real toss-up in terms of contacts and experience," she said. "It should be fun to watch."
Another key will be which project lands the most-coveted retailers.

Richard Ward, a St. Louis-based consultant with Zimmer Real Estate Services, said outlet centers used to have to stay about 40 to 50 miles away from metro areas because full-price retailers had more sway in keeping the discounted stores farther away.

But these days, outlet malls have been moving closer in. "I'm a little surprised that they'd move in this close," he said. "They're almost next door to Chesterfield Mall and certainly next door to Chesterfield Commons."

Katie Reinsmidt, a vice president for CBL & Associates, which owns Chesterfield Mall, said in an email that the company did not have any comments at this time on the proposed developments.

But the backers of the Spirit of St. Louis Outlets emphasized that their location was six miles from Chesterfield Mall, which they said was a respectful enough distance so as not to cannibalize sales from full-priced retailers.

"We're here to create incremental business," said Lisa Wagner, a partner for EWB Development, which is handling the marketing and leasing for the Spirit project. "This creates a new destination and does not merely siphon business from existing retail."

The center is expected to draw customers from a 150-mile area, so it will be bringing in shoppers who would not ordinarily shop in Chesterfield, she added.

In addition to being farther from Chesterfield Mall than the other proposed project, the team behind Spirit of St. Louis touted the project for its high visibility and easy access from the interstate and its racetrack layout.

Coslik said they should know in the next six months or so which of the two proposed outlet centers would win out. He said he did not plan to seek any tax-increment financing, though he did not rule out other governmental programs. In any case, he said he had a major financial institution, yet to be named, on board providing the vast majority of the financial capital for the project.

The project is part of a 133-acre site owned by Chesterfield Blue Valley LLC, which bought the property in 2007 and 2008.

The mall will make up about 40 percent of the development, said Dean Wolfe, the company's manager. The rest will be made up of a hotel, sit-down restaurants, and office space, he said. "We have a larger site," he said. "We have better access. We're zoned today. We're ready to start construction."

But they still have to present their site plans to Chesterfield for approval.