Fresh trends celebrated at Open-Air Summit

This year’s ICSC Open-Air Summit underway in Miami is taking place against an uptick in development activity, with a strategic emphasis on urban locations, mixed uses, parklike settings, and especially food.

“The expansions and renovations of older open-air centers that we are seeing in maturing areas today make a lot of sense, because they create better density and higher property values,” said David Palmer, executive vice president of development for the Dallas-based Weitzman Group.

There is a 5 percent rise in shopping center starts being projected for this year — or 102 million square feet, up from last year’s 97 million square feet, according to Dodge Data & Analytics. By comparison, the industry saw some 380 million square feet of construction in 2007, according to Dodge chief economist Robert Murray, who says the industry “is moving into a more mature phase of expansion.”

Today’s open-air centers are bending the definition of multitenant retail, with large segments of space not occupied by shops. Dania Pointe, Kimco Realty’s 102-acre, main-street-style shopping and entertainment mecca on I-95, in Dania Beach, Fla., near Fort Lauderdale, will also be a business center and have a 300-room hotel, apartments, condos and offices. (Kimco's co-founder, Chairman Milton Cooper, addressed the summit Wednesday.) The firm has been marketing the project online as a possible corporate headquarters site. The phased, $800 million project, at the site of the old Hurricane roller coaster at Boomers Family Fun Center, will eventually encompass about 1 million square feet of space, including big-box retailers and a diversity of national and regional merchants and restaurants. The 300,000-square-foot first phase is scheduled for late this year. “Dania Pointe is a great example of a new project destined for success because of its focus on creating a destination with memorable spaces and places,” said David Duckworth, an Avison Young principal of capital markets. “If executed correctly, new and expanded open-air projects not only open up to the community, they often serve as their civic hubs and gathering places.”

Cities that seek new centers often want extra helpings of food and fun along with them, says consultant Lacy Beasley, president and COO of Birmingham, Ala.–based Retail Strategies. “The most common request we hear from municipalities is for more casual-dining restaurants, family entertainment centers and breweries,” she said. “Americans now eat out more than they buy groceries, and restaurants offer them both convenience and the experience they want,” Beasley said.

Inquiries from retail developers and owners have risen this year, according to Lori Bongiorno, a principal of Columbus, Ohio–based M&A Architects and the director of the firm’s commercial studio. “It seems like developers that haven’t done open-air mixed-use projects before are eager to do them now,” said Bongiorno, who has worked on Peninsula Town Center, in Hampton, Va.; on Watters Creek, in Allen, Texas; and on Easton Fashion District, in Columbus.

“Today all bets are off — whatever’s fun and unique can make sense for a center,” said Scott Kaplan, executive vice president for retail brokerage at JLL.

In the Dallas area, the $400 million Legacy West urban village, in Plano, is set to open this month. This project will eventually contain 90 places to shop or eat, including a 55,000-square-foot, 20-vendor food hall, plus apartments, offices and a movie theater. Tenants at the Karahan Cos.–developed center will include a three-story restaurant-bar called Haywire, a Shake Shack, a Dean & DeLuca and a Del Frisco’s Double Eagle Steak House.

Kimco, too, has a Texas open-air project in the works. Its 450,000-square-foot, Target-anchored Grand Parkway Marketplace, in northwest Houston, is set for completion by early next year. The opening of the nearby Tomball Tollway has prompted strong commercial growth in the corridor, including new facilities for Noble Energy and ExxonMobil, as well as hotels, major medical facilities and residences. Grand Parkway Marketplace will contain national, regional and local tenants and eight junior anchors, plus a restaurant village with a man-made lake, a fountain and a boardwalk.

Grocery anchors in all manner of open-air centers will become even more common, according to consultant Jan Rogers Kniffen, CEO of J. Rogers Kniffen WWE.

Organic and specialty grocery stores remain in growth mode, in part because of the enhanced health awareness among Americans that stems from rising health care costs, says Beasley. Indeed, Whole Foods, Trader Joe’s and other specialists are showing up in shopping centers that never had grocery stores before, according to JLL’s Kaplan.

The preferences of the Millennial generation are a big factor driving the reinvention of open-air lifestyle shopping centers as wining-and-dining hubs, according to Kniffen. “They are more interested in doing things than owning things,” he said. “And, particularly, they’re more interested in going out and having drinks and dinner with friends.”

A significant amount of open-air construction is being done in the form of additions to enclosed malls. Simon’s Sawgrass Mills, in Sunrise, Fla., one of the largest enclosed shopping centers in the country, recently enhanced its outdoor experience by bringing in a line of luxury tenants to its Colonnade Outlets expansion, which has a streetscape design. “The addition adds tremendous value and horsepower,” said Duckworth.

In a giant urban project, Westfield says it will demolish its struggling, 44-year-old, enclosed Promenade mall, in Los Angeles’ Warner Center, in favor of a massive open-air complex with retail, up to 1,500 homes, a 15,000-seat concert venue, offices, a grocery store and two hotels. This $1.5 billion project, tentatively called Promenade 2035, will be an extension of sorts of Westfield’s new open-air Village at Topanga lifestyle center, across the street. Phased construction is to begin by 2021 with a target completion date of 2035, as the tentative name suggests. The firm’s goal is to transform the property “into a community destination that allows people to live, work and play all in one area,” according to Larry Green, a Westfield senior vice president.