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THREE OWNERS LATER, STREETS AT SOUTHPOINT OPENS

By Dave Bodamer

Inside and out, Southpoint presents a dramatic juxtaposition of traditional and modern architecture.

The Streets at Southpoint, Durham, N.C., has the unusual distinction of having had three different owners before its doors even opened.

The 1.3 million-square-foot hybrid mall, which opened in March, was conceived by Chicago-based Urban Retail Properties. In 2000 Rodamco North America purchased Urban and continued the planning and construction. Then, in January, The Rouse Co. agreed to buy The Streets as part of the transaction that split Rodamco’s assets among Simon Property Group, Westfield Holdings and itself. Rodamco’s shareholders approved the deal March 25.

That said, the $220 million center has other distinctions, too. It marks Urban’s latest refinement of the hybrid concept, in which a traditional enclosed mall is married to an open-air lifestyle center. The company’s other inside-outside malls include Citrus Park Town Center, Tampa, Fla.; Galleria at Roseville, Calif.; and Valencia Town Center, north of Los Angeles.

Getting people to go from the malls to the open-air parts of these projects, however, has proved to be a problem with many hybrids; developers have had to make special efforts to market the open-air centers and give them distinct identities. That is what Urban is trying to do with Main Street, Southpoint’s outdoor portion.

“We’ve drawn a clear line with an access road to separate the mall from Main Street,” explained Richard C. Polley, CSM, Southpoint’s general manager. “I think that is going to help give Main Street somewhat of its own identity.”

Urban created a different logo for Main Street and is running separate advertising and marketing campaigns for the center’s indoor and outdoor portions.

“We have been able to talk to the owners of other centers like this and learn from what they’ve done,” said Southpoint marketing director Angela Sweeney.

The outdoor portion is designed to evoke the feeling of a traditional American Main Street. It features a group of small buildings clustered on pedestrian-friendly streets with some car traffic. The area is anchored by Southpoint Cinema, a 56,000-square-foot, 16-screen cineplex operated by Consolidated Theaters.

A major problem that dogged some hybrids, including the Mall of Georgia in Buford, Ga., and FlatIron Crossing, Broomfield, Colo., was a delay in the opening of their theaters and restaurants; without these anchor tenants, people had less reason to go outside. That isn’t a problem at Southpoint, where all the Main Street tenants opened at the same time — including the theater anchor and a 25,000-square-foot Organized Living furniture store.

“It’s got all of the big lifestyle uses,” Polley said. “It’s a real destination product. We’ve put the whole assortment of restaurants, furniture and specialty retail in it.”

Architects have carried The Streets’ motif into the center itself, where each storefront on the two-level main concourse is designed to look like an exterior storefront.

“Each retailer is essentially designing an individual building,” said Jeff Johnson, the project’s marketing director. “When you look down Main Street, it looks like any main thoroughfare in the country.”

That idea is expressed both through the design of the facades and by the materials used on the main concourse.

“A big distinction here is that there has been a tremendous effort made to make you feel like you’re outside when you’re inside,” Polley said. “There’s lots of brick, lots of stone. The retailers are using traditional exterior materials for [their] storefronts.” (Urban created a similar resonance between indoor and outdoor architectural elements at Citrus Park.)

Customers are able to drive directly into the Main Street portion of Southpoint and also up to the regional mall.

The mall’s crescent-shaped main concourse features five anchors. A 180,000-square-foot Hecht’s and a 111,864-square-foot Sears serve as anchors on the northern half of the crescent, with a 102,704-square-foot J.C. Penney and a 180,000-square-foot Belk capping the southern tip. On the crescent’s concave side sits a 144,000-square-foot Nordstrom Ñ the chain’s first store in North Carolina.

The center opened with a 95 percent occupancy rate and is expected to be at nearly 100 percent within four months, its owners said.

The project also has the distinction of being the first regional mall to be built in the region in more than 20 years. It brings roughly 40 new retailers to the area, including Apple Computer, Aveda, Bebe, Benetton, Charlotte Russe, Coldwater Creek and Pottery Barn Kids.

“I think that will help distinguish us from other centers in the region,” Polley said.

For Nordstorm, The Streets at Southpoint represents a significant opportunity.

“We’ve been looking at North Carolina for a long time and waiting for the right project, and this is it,” said Nancy Miyahira, a Nordstrom spokeswoman.

This is the third time Seattle-based Nordstrom has gone into a hybrid center; it has stores also at the Mall of Georgia and International Plaza, Tampa, Fla.

“I think every center has a different kind of appeal,” Miyahira said. “The Streets at Southpoint format is certainly appealing to us, but it’s not the only type of center we’re looking at.”

The project’s developers said getting Nordstrom marked a coup for the center.

“Nordstrom is going to enlarge our trading area significantly,” Polley said. “We’re looking at trading areas up to 125 miles away.”

The Durham Office of Economic and Employment Development projects that Southpoint will generate $1.5 million in annual property taxes and an additional $1.3 million in sales taxes. Despite these benefits, Polley said the city did not provide any financial support to the project. Urban invested $10 million on roadway improvements, including a new interchange on a nearby interstate.

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