Outlet mall expected to spur Glendale tax revenue, add jobs
Tanger mall also expected to spur tax revenue, add jobs
Leslie Wright / The Arizona Republic
West Valley shoppers can anticipate strolling through J. Crew, Banana Republic and Gap outlet shops when Tanger Factory Outlet Centers Inc. opens a new mall at Glendale’s Westgate City Center in November.
Glendale city officials can look forward to an extra $2.5 million of annual sales-tax revenue, as well as 900 new jobs. Arizona should see an additional $7.5 million in annual state taxes.
Nearby restaurants and other shops can expect thousands of new feet coming their way if the new outlet mall draws in 5 million to 6 million annual visitors and shoppers, as executives expect.
Traditional malls and shopping centers could see a minor drain of shoppers to the $76 millionTanger Outlets Westgate, but probably not as much as they might fear.
Bulldozers were already moving earth Wednesday as about 200 dignitaries gathered under a crisp white tent for the traditional groundbreaking. The mall will be on the 38-acre Westgate site that lies between Loop 101 and 95th Avenue.
Tara Hitchcock, the former host of “Good Morning Arizona,” described the coming mall as the “missing piece of the puzzle” that would allow the troubled Westgate to thrive.
The Ellman Cos. opened the center in 2006, a few years after luring the Phoenix Coyotes hockey team to a new arena at Westgate.
Since then, the cratered economy and continued problems finding a buyer for the hockey team have resulted in slow foot traffic.
Ellman lost the bulk of Westgate to lenders in foreclosures last year and a new management team is working to reinvigorate the complex.
Others said they were just glad to see ground breaking on something after years of dismal economic news.
“There is so much pent-up demand, not only in Glendale but in the surrounding communities,” said Glendale City Councilwoman Joyce Clark, who represents the area.
An expedited review
Tanger executives announced their plans for the 328,000-square-foot mall in February, just a few weeks after Glendale officials moved the project through expedited planning. Steven Tanger, president and CEO of the North Carolina-based company, said the aggressive permitting saved millions of dollars.
Glendale offered no incentives for the project and zoning was approved when Westgate was built in 2006.
Like Westgate’s Jobing.com ice-hockey arena and the nearby University of Phoenix football stadium, the outlet mall is meant to draw tourists as well as locals. The design should merge with the contemporary look of the shopping and entertainment center, with its large urban billboards and “dancing” fountain.
“We look at this as an asset,” said Sherry Henry, director of the Arizona Office of Tourism. “That activity and economic vitality will spread out across the rest of the state.”
An outlet mall boom
Outlets are one of the fastest-growing retail sectors in the country, where the recession has driven consumers to find brand-name goods at cheaper prices.
Four outlets are in the works in metropolitan Phoenix alone. One being planned near Loop 101 and Scottsdale Road originally was to be the site of a high-end luxury mall. Another outlet mall is planned near the Wild Horse Pass Hotel & Casino near Loop 202 and Interstate 10.
Tanger is planning to build an outlet mall at Loop 101 and Indian Bend Road, near the Talking Stick Resort, along with the mall at Westgate. The company has 39 outlet malls around the country and in Canada.
With low overhead and an appeal to the budget-conscious shopper, outlets are among the few projects that can get financed, said Jeff Green of Jeff Green Partners, a Phoenix-based real-estate consultant group that studies the feasibility of retail projects.
“Outlet malls have done so well that folks like Tanger are a wise bet for investors,” Green said.
Surprise residents may have to wait for another decade or more before Westcor’s Prasada — a huge commercial and residential center — straddles Loop 303 and draws shoppers from around the region. As originally conceived in 2005, the mall should have opened 2 million square feet of commercial space by the end of this year.
The housing slump also stalled Estrella Falls, another Westcor regional mall planned for Goodyear, which may not even break ground for two to three years.
Not grandpa’s outlet mall
Outlet malls also have changed since they first started popping up in out-of-the ways sites around the country. While major retailers used to send over seconds or outdated fashions, many now manufacture items specifically for their outlets.
With a different product line, retailers no longer worry about having an outlet competing with their stores in traditional malls and shopping areas, Green said.
“They bring in the lower end of product that you won’t find in the regular store,” Green added.
Tanger disagreed that the quality of outlet products is lower, but the company describes the typical outlet shopper as distinctive. The majority of outlet shoppers are “affluent, well-educated working women, 25-54, who are shopping for their favorite brands,” said a company release.
Discounts on brand names can run from 30 to 70 percent, with merchandise coming directly from the manufacturer.
Smaller shopping centers near the site might feel some impact, but not much, Green said.
“I think they’ll be impacted but it’s going to be fairly minor because the outlet mall is going to be pretty much branded merchandise,” he said. “The outlet mall is probably not going to have many restaurants, if any. And the impact on Arrowhead mall is going to be minor because you’re either a traditional shopper or an outlet shopper.”
Still, he added, retailers will have to see what happens when the outlet mall opens since they don’t usually locate so close to traditional malls.
Barry Broome, president and CEO of the Greater Phoenix Economic Council, said that the foot traffic will make up for any drain of customers.
“This will function as an anchor,” he said, adding that the development is a good indication of future economic growth. “It’s a great sign for Westgate and a great sign for the West Valley.”