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Three firms race to build Twin Cities center

By Jim McCartney

There's a chess game going on in Maple Grove, a suburb of the Twin Cities; to the winner goes the opportunity to build a regional mall.

Three developers — The Rouse Co., General Growth Properties and Opus Northwest — are vying to build the Twin Cities' first enclosed shopping center since the Mall of America opened in 1992.

The growth and demographics of Maple Grove make the race all the more intense. Located in the northwest corner of the Twin Cities, Maple Grove is one of its fastest-growing suburbs, and is not far from the wealthy suburbs of Wayzata and Minnetonka. Developers say that a mall there would also draw well from outside the Twin Cities, from communities like St. Cloud, which is an hour's drive to the northwest on Interstate 94.

But there are hurdles, not the least of which is landing tenants.

The two anchors most talked about are Dayton's, which is the predominant chain in the Twin Cities; and Nordstrom, the Seattle-based fashion anchor, which has long been looking to add a second Twin Cities store to follow up its successful debut at the Mall of America.

Citing Maple Grove's "vibrant and growing community,'' officials at Target Corp., Dayton's Minneapolis-based parent, announced late last year they would build a new store as part of Rouse's project.

But the announcement caught many by surprise in the Twin Cities' retail industry — including Rouse. After all, Rouse had yet to file development plans, let alone sign up tenants, and is planning the mall at a major intersection that has yet to be built.

"A public announcement on our project is a bit premature — we're still early in the public approval process,'' said Nancy Tucker, a spokeswoman for the Columbia, Md.-based developer, which also owns Ridgedale Center in nearby Minnetonka. "It was Dayton's decision to announce it.''

Tucker said that she could give no other details about Rouse's project, such as its ultimate size, other tenants or construction timetables.

But given Dayton's stature in the Twin Cities, the announcement was as much a boost for the Rouse project as it was a blow to two other developers hoping to build regional malls in the area — Chicago-based General Growth Properties and Minnetonka-based Opus.

While Dayton's officials say they just wanted to share the good news with the residents of the northwestern suburbs, retail experts say that the announcement is part of a strategic plan by Dayton's to influence the outcome of where a regional mall is built in Maple Grove.

"I know they've been wooed by General Growth and Opus,'' said Al Madsen, Maple Grove's city administrator. "It was likely in everyone's best interests to let them know where they stand.''

Tim Murnane, vice president of development for Opus, said he was not surprised that Dayton's wasn't going with them — Dayton's had told him it wasn't interested in Opus' Arbor Lakes project, a recently opened mixed-use development in Maple Grove — because it was too close to its store in Brookdale Center in Brooklyn Center, a northern suburb about eight miles from Maple Grove. For their proposed regional malls, Rouse and General Growth both have sites farther away from Brookdale, at the intersection of Interstate 94 and Route 610, a state highway that is under construction. For its part, Opus has moved its site for a mall to an 85-acre property next to Arbor Lakes.

While the fate of its regional mall hangs in the balance, Opus plans to build a second phase to the power center that is part of Arbor Lakes, a huge development that includes office, residential and hotel space as well as retail. The second phase will feature soft-goods retailers, including an unnamed department store, as well as some entertainment options. The 1 million-square-foot second phase will include at least one hotel and office buildings.

General Growth has not given up its regional mall plans. Ron Den Adel, General Growth's vice president of development, said that his company is still targeting fall of 2003 to open a mall that would be in excess of 1.2 million square feet. Among its offerings would be five anchor department stores, a movie complex with stadium seating, an ice skating rink and restaurants, he said.

But with Dayton's on board, Rouse will have a "stronger position with regard to attracting other stores,'' said Jim McComb, a Minneapolis retail consultant. After all, retailers know that, with the exception of Mall of America, Twin Cities' malls with Dayton's stores do much better than those without, he said.

Dayton's, as well as Rouse, stands to benefit from the retailer's early public commitment to Rouse; the first store in a project often gets the best economic deal as well as first choice of a location, McComb noted.

When Dayton's committed to renovating its store at Brookdale in October, some industry observers thought it would be a while before the retailer would show interest in building another one in that quadrant of the Twin Cities. But now Dayton's says it's not happy with the progress of the Brookdale redevelopment. The retailer has had to extend a deadline from Nov. 1 of last year to March 1, 2000, for Brookdale's developer, Talisman Cos., to meet some financial obligations on which its renovation deal hinges, said Melissa Stark, a spokeswoman for Dayton's.

"We're disappointed in Talisman's lack of progress,'' she said.

Some retail experts speculate that the Maple Grove announcement may be intended to spur Talisman to perform on its promise as well as give Dayton's another option in the northwest suburbs if Brookdale is not successfully repositioned.

Jim Schlesinger, president of Coral Gables, Fla.-based Talisman, said he's not worried about Dayton's plans for Maple Grove, adding he's confident he will meet the March 1 deadline.

For all the talk about Dayton's announcement being premature, developers have long been waiting for a definitive word from Nordstrom.

Up to less than a year ago, Opus officials were confident that Nordstrom would anchor its regional mall. But now, none of the developers are ready to claim Nordstrom, but concede privately that Nordstrom holds the key to what happens in Maple Grove. Nordstrom declined to comment on its plans for the area.

It may not be until later this year or even next year before the picture clears. Madsen, Maple Grove's city administrator, said that none of the three developers have filed any plans with the city, and he doesn't expect any to be filed "for some time to come.''