Galleria makes way for new anchor
Owners purchase old Belk space, seek Dillard's or Nordstrom Thursday, August 23, 2007
SHERRI C. GOODMAN Birmingham News staff writer
The owners of Riverchase Galleria have agreed to buy the 255,000-square-foot anchor space being vacated by Belk Inc., potentially paving the way for the Birmingham area's largest mall to land a Nordstrom or Dillard's.
The deal is expected to close Sept. 30, said Linda Zwern, head of Belk's western division based in Birmingham. The terms were not disclosed.
Bob Perry, general manager of the Galleria, said mall manager and co-owner General Growth Properties would look at remaking the west side of the mall into a more modern streetscape reminiscent of lifestyle centers such as The Summit and Patton Creek. A major department store would anchor the streetscape, he said.
Chicago-based General Growth has said it would like to land Nordstrom or Dillard's, two department stores absent from Birmingham's retail landscape. Both stores have been on developers' and shoppers' wish lists for years.
As part of the plan, the Galleria's parking decks would be reconfigured. General Growth also might eliminate the lower levels of the parking structures that flank the current Belk building so that the streetscape would span that side of the mall.
General Growth and its Galleria co-owner, Montgomery-based Jim Wilson and Associates, would likely have to invest $50 million to $100 million to make those changes. If they decide to go forward with the streetscape plan, it would not be completed until at least 2011, Perry said.
Expanding offerings:
Belk earlier this year said it would move into Parisian's high-profile spot in the Galleria along with one floor of the former McRae's site. The move will allow Belk to expand its offerings in the state's largest shopping mall, while gaining perhaps the most high-profile anchor spot in the Galleria.
Tim Belk, who was in Birmingham Wednesday to watch the Parisian sign come down and the Belk name go up at The Summit, said Belk will be completely moved into its new Galleria main store in September.
Belk's home store will operate out of the current Belk space through November. It will then move into the former McRae's building, which will also house a beauty salon and children's fashions, Zwern said.
Control of mall's future:
Belk acquired Birmingham-based Parisian last year in a $285 million deal with Saks Inc. The deal created multiple-store issues for Belk because the family-owned chain had already entered the market and some of the area's primary shopping sites either on its own or through its purchase of another Saks division, Proffitt's/McRae's in 2005.
When Belk announced it would move out of its current Galleria space, General Growth said it wanted to buy the spot so it could better control the mall's future.
Landing a Nordstrom "would really bolster the position of the Galleria," said UAB retail expert Robert Robicheaux. Nordstrom, an upscale Seattle-based department store operator known for stylish clothing, a large shoe selection and first-rate customer service, has been courted by Birmingham developers for years.
"It would give the Galleria a significant edge and, frankly, it would be something that ought to get The Summit's attention," Robicheaux said. Having a traffic generator like Nordstrom would help the Galleria compete for other high-end tenants that might have previously favored The Summit, he said.
Adding a Dillard's, meanwhile, would likely create some healthy competition for Belk and help out other tenants in the mall.
"It will certainly lay a great challenge down for Belk to secure or hold on to tremendously loyal patrons of Parisian who are waiting to see what Belk will do," he said.
Efforts to reach Dillard's and Nordstrom officials were unsuccessful.
Tops industry average:
The Galleria, which draws 12 million shoppers a year, already is performing better than most malls in the country. The Hoover mall reports about $500 in annual sales per square foot. By comparison, the industry average is about $350 a square foot, Perry said.
The hybrid mall concept is not new for General Growth, which has the streetscape addition in two of its properties in Georgia. At Cumberland Mall in suburban Atlanta, the company last year added 77,000 square feet with a streetscape that included Maggiano's Little Italy, P.F. Chang's China Bistro and The Cheesecake Factory.
In Augusta, General Growth, in a defensive move, added a streetscape in part to keep existing tenants from defecting to planned open-air developments. The tactic worked, and General Growth held onto the tenants, Perry said. Meanwhile, two of the four developers interested in putting Summit-style projects in the Augusta area backed out, he said.
E-mail:
sgoodman@bhamnews.com
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