Benderson close to moving ahead, but mall plan may need tweaking
Kevin McQuaid / Sarasota Herald-Tribune
After a four-year hiatus, Benderson Development Co. says it is close to relaunching its ambitious University Town Center mall — though perhaps without its partners or the luxury anchors once planned for the shopping hub.
Although sales have improved, analysts maintain that department stores Nordstrom, Neiman Marcus and Macy’s — who had tentatively committed to the $185 million mall — remain too wary to consider opening many new stores.
Benderson will likely have to look to upscale alternatives like Saks Inc. or Lord & Taylor to anchor the 1.7-million-square-foot property, planned for Interstate 75 and University Parkway.
“Both Nordstrom and Neiman Marcus, in particular, are proceeding cautiously with retail expansions,” said Jeff Green, president of Jeff Green Partners, a Phoenix-based retail consultant.
“I think it will be a while before University Town Center would get either one, or both,” he said. “In my opinion, it will not happen until late in this decade.”
Conceived during a real estate and stock market boom that fueled nearly unprecedented discretionary spending, the project snagged the upscale department stores in 2007 and 2008. But when the Great Recession ate into housing values in Southwest Florida and nationwide and tripled U.S. unemployment levels, the potential anchors backed off.
The same might be true for Benderson’s mall partners.
Mark Chait, Benderson’s director of Florida leasing, declined to comment on the status of partners The Forbes Co. or Taubman Centers Inc.
“At this point it’s our project, and we’re working with several developers who are interested,” Chait said. “We do expect to have a partner on it.”
Chait said Benderson is in talks with a number of department store anchors that would be “appropriate.”
Benderson and Forbes officially mothballed the upscale mall in December 2008, seven months after Taubman Centers Inc. was brought in to help get it off the ground. Taubman, developer of Tampa’s International Plaza, told investors in April 2009 that the Town Center was on hold.
But Benderson signaled this week, while receiving approval from Sarasota County to decouple affordable housing from the 276-acre project, that plans have been revived and negotiations have intensified.
“The major retailers are talking seriously,” Benderson President Randy Benderson said.
The resurrection comes as competitor Westfield Corp. has once again begun pushing an expansion plan at its Southgate Mall. There, Westfield is hoping to add 30 new inline stores, including the region’s first Apple Inc. electronics store.
But neither Nordstrom nor Neiman Marcus — two retailers whose entrance into Sarasota promised to provide a quality many perceived as missing here — appear ready to re-commit to University Town Center.
“We’re open to continuing discussions depending on how they proceed,” said Colin Johnson, a spokesman for Seattle-based Nordstrom. “There’s a possibility we would revisit this, but there’s nothing definitive as yet.”
This year, Nordstrom has opened just one full-line store, in Newark, Del. Additional full-line stores are slated to open this fall in St. Louis and Nashville.
Nordstrom, which has stores in Tampa and Naples and seven other Florida cities, earlier this month said total 2011 sales had grown 6.7 percent year-to-date compared with the same 2010 period.
Neiman Marcus also has seen a spike in sales.
The Dallas-based chain reported operating earnings for the third quarter of its fiscal year, ended April 30, that rose 45 percent to $123.2 million.
Like Nordstrom, Neiman Marcus also operates at International Plaza in Tampa and was brought to University Town Center by Forbes.
Like Nordstrom, the company also remains intrigued by University Town Center.
“We still have an interest in the Sarasota market and we are still in discussions with the developer,” Neiman Marcus spokeswoman Ginger Reeder wrote in an email Thursday.
But some retail analysts say that while luxury merchants have rebounded, they remain wary of new, mall-based stores.
“Right now, mall development is dead in the water,” said Howard Davidowitz, chairman of Davidowitz & Associates Inc., a New York retail consultant and investment banking firm.
“The luxury sector is booming, so if positioned in the right area, anything is possible,” Davidowitz said. “But most of the growth is online or at their discount outlets. That’s the reality of the environment.”
Green, the Phoenix consultant, contends that Florida’s housing crisis, nagging unemployment rate and saturation of retail will prevent retailers from expanding in the state.
“In Florida, retailers are gun shy,” Green said. “There’s already a lot of retail and there remains a struggling housing market.”
Still, Benderson believes the timing is right, especially since construction would take two years.
“The economy is gaining momentum, stores are starting to show definite interest,” Chait said. “We’re excited about moving the mall forward.”