Can the addition of mixed-use developments improve retail’s future?
According to the experts from Valley Partnership’s Monthly Friday Morning Breakfast today, the answer is yes and successful examples can already be seen across the Valley.
Today, innovative commercial developers are updating the look, feel and experience of shopping centers, and are developing new large-scale mixed-use projects, to include specialty retail, offices, technology, healthcare and residential, creating dynamic live-work-play destinations.
Moderated by CBRE’s First Vice President Jami Savage-Gray, the Friday Morning Breakfast panel included Sharon Harper, president and CEO of Plaza Companies, who discussed plans to “reinvent” the iconic Park Central into a modern, mixed-use development; Larry Pobuda, senior vice president of The Opus Group, spoke about a new $116 million mixed-use project under construction in Downtown Tempe; and Macerich’s Senior Vice President Scott Nelson highlighted the latest attractions and investments taking shape at Scottsdale Fashion Square, which included the mall’s latest mixed-use redevelopment plans.
In addition to renovations of Scottsdale Fashion Square’s luxury wing, Macerich also plans to add high-end residential units, Class A office space and a hotel via a new 150-foot tower, which was recently approved by the City of Scottsdale. Nelson says, “The strategy is to create viable non-retail uses to supplement the mall’s existing retail offerings.”
He was particularly excited to announce plans in the works to transform the former Barneys New York store store into a flagship space for a high-profile technology company and a co-working space for others. Although, Barneys New York met the luxury-retail standards for the mall, Nelson says, it only generated about $10 million in annual sales, whereas the new tech tenant is projected to hit $60 million.
For Pobuda and The Opus Group, the focus is on meeting the growing demand for destinations that are more urban, walkable and transit-oriented with a variety of uses in close proximity. He thinks college neighborhoods like near the ASU campus in Tempe can fit the bill as long as the right mixed-use developments are put in place. While Opus’ Tempe project is considered more residential by scope, he says, it needed retail to help attract residents seeking a live-work-play lifestyle. In addition to the 31,000 square feet of retail space, there are also plans for a 207-room hotel, which are pending approval.
At Plaza Companies, retail is critical to all of its project because people want a place to gather and interact, says Harper, who helped successfully transform the former Los Arcos Mall in Scottsdale into The ASU Scottsdale Innovation Center known as SkySong, which is projected to generate more than $32 billion in economic output and more than 10,000 new jobs across the Valley over the next 30 years, according to an analysis performed by the Greater Phoenix Economic Council. In terms of retail, SkySong added a brand new craft cocktail and beer concept called Bitters, which opened in October.
Harper aims to replicate that success at Park Central Mall, Phoenix’s first mall, by converting it into another modern, mixed-use, competitive economic engine. She adds, the buildings at park Central have large floor plates and high ceilings with a variety of fascinating exposed roof structures, as well as an opportunity to create ground level indoor/outdoor work experiences and authentic, non-traditional office experiences, which is increasing in popularity for Millennial workers and technology companies.