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Shopping Centers Today -> June 2002
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CANADA LIFESTYLE
A format conceived in warmer climes heads north of the border
By Susan Thorne
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| A new hybrid center will serve as a community hub for Don Mills, an affluent suburb of Toronto. |
One of Canada’s first malls will spawn one of the country’s first lifestyle centers, under plans unveiled by Toronto-based Cadillac Fairview Corp.
The lifestyle center will be added as be part of the redevelopment of Don Mills Centre, a regional mall in the Toronto suburb of Don Mills that will be renamed Don Mills Town Centre. Cadillac is converting it to a hybrid open-air complex combining a traditional enclosed mall with a streetscape-style layout. The initiative will not only introduce a new shopping format to Ontario, but will also upgrade the retail mix to help this center realize its full potential.
Pioneers of the lifestyle concept in the Western United States conceived it as a warm weather format, but these open-air centers have been making their way east. There are several examples completed or under construction in New England, and now the trend is hopping the border into Canada.
Don Mills Centre has undergone radical transformations before in its relatively long history. Opened in the 1950s as a plaza, anchored by a food store, it served Canada’s first planned suburban community, Don Mills. Through a succession of expansions and refurbishments over the years, it acquired an Eaton’s store in 1962 and became an enclosed mall in the 1970s. Today the Eaton’s is gone, replaced by a Sears outlet, and the mall functions more like a community center than a regional mall, according to Tom Smith, vice president of development at Cadillac Fairview.
“People drop in because of the convenience, but it has not been drawing well,” he said. Yet Don Mills has strong potential; sales run at about C$530 ($337) per square foot and the trade area includes some of Canada’s most affluent neighborhoods: Bayview/Leslie, Bridle Path, Lawrence Park and Leaside. There is also an underserved daytime population of more than 100,000 employees in the area. Cadillac research indicates that overall market penetration is only 5 percent. “There is an opportunity to increase that,” Smith said.
Cadillac began considering available options for Don Mills two years ago, after reviewing some of the shopping trends in the Greater Toronto area.
“There haven’t been any new regional malls since the early 1990s, with the result that most existing regionals have become super-regionals,” Smith said. “Power centers and category killers account for most new shopping centers, and second-tier centers are losing ground.”
Fairview Mall, a regional center not far from Don Mills that Cadillac co-owns with Ivanhoe Cambridge, is due for expansion soon, which will generate additional competition if Don Mills Centre continues to share the regional mall model.
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With existing formats maturing in the Toronto region, Cadillac representatives turned to the United States for ideas, visiting the sites of successful open-air concepts, including CityPlace, West Palm Beach, Fla.; Easton Town Center, Columbus, Ohio; and Old Orchard Center and Oakbrook Shopping Center in the Chicago area. The Chicago centers were particularly relevant, because they function successfully despite severe winter weather, as any Ontario center must.
“That got us comfortable with the climate issue,” Smith said. “Their winters are worse than ours!”
Cadillac was also impressed with the popularity of the lifestyle concept among both shoppers and retailers in the United States.
“We heard nothing but positive reactions,” Smith said. “The retailers reported that their productivity was higher in those [lifestyle] centers than in other locations.”
Many of those same U.S. retailers are already operating in Canada and are tenants in Cadillac Fairview malls, which was an added boon.
Based on this research and the character of the catchment area, Cadillac plans to expand the merchandise mix to better serve the well-off communities nearby. The majority of existing stores will remain in a redeveloped enclosed facility on the present mall site, while the open-format area at the southern end will have several freestanding buildings with a streetscape layout. Four 20,000-square-foot shops and a 60,267-square-foot food store are planned for this space, plus clusters of retail stores grouped by their merchandise offerings.
The merchandise mix will give particular emphasis to food (besides the supermarket there will be a large complement of restaurants), furniture and housewares. Caban, a Canadian home furnishings lifestyle retailer (and subsidiary of Club Monaco), Pottery Barn, Sporting Life (a Toronto-based sports goods and apparel retailer) and Williams-Sonoma are the kind of up-and-coming retail tenants Cadillac says it would like to have in the center. As of press time no leasing agreements have been signed, however.
The center will also include 600 residential units, additional office space, a hotel, a day spa, a fine arts gallery and a fitness club.
A variety of parking possibilities will be offered so that customers will be able to drive up in front of some stores for quick shopping stops or use a parking area for longer visits.
Though its concept may have been borrowed from a U.S. prototype, Don Mills Town Centre will have a distinctly Canadian design using elements from Ontario’s architectural heritage. The developers also intend for it to live up to the “Town Centre” part of its name by becoming a gathering place and focal point for business and social activity in Don Mills.
At press time the developer was still awaiting municipal approvals for the residential component and permission to move a hockey arena, a process that could take a full year. Renovations and the addition would proceed after that, with a 2005 opening expected for the retail area.
Cadillac offers no predictions about the performance of the revamped center, but Smith said his company would be content with sales at current levels. If sales productivity is higher in the new areas of the project than in the older ones, Cadillac might consider converting the entire center to an open-air format, he added.
The lifestyle center has achieved trend status in the United States, but will Canadians love it too? Maureen Atkinson, senior partner at Toronto retail consulting firm J. C. Williams Group, opined that the open, accessible layout will win fans who are disenchanted with other shopping formats.
“It’s all about convenience, about making shopping more convenient for the customer,” she said. “Power centers started off as a convenient alternative to the enclosed mall — you could just drive up to the store — but they’ve become less so. They got bigger, and they’ve developed problems with traffic.”
But the number of lifestyle centers will likely be small north of the Canada-U.S. border. Canada’s market size is one factor that dictates this.
“After all, we’re the size of California in population,” observed Smith. Although Canada’s population, like that of the United States, is highly urbanized, there are only a few cities that can provide the concentration of high-earning residents needed to support a lifestyle center. Moreover, certain urban centers, such as Ottawa or Montréal, are probably too cold for an open-air center.
“This type of center serves the high end of the urban market, and that’s part of its limitation,” Atkinson said. “We don’t have that many neighborhoods in Canada that would support this concept. It won’t be huge.”
Even in the United States, the lifestyle center’s scope is limited, she noted.
In terms of tenanting, however, lifestyle centers like Don Mills Town Centre should have little difficulty in leasing their retail stores. Because of the dearth of new regional malls in Canada, there have been limited expansion opportunities for many mall retailers in recent years. The cost factor (lifestyle centers don’t carry the high CAM charges incurred in enclosed malls) should also make such centers attractive to retailers, she said, adding that U.S. retailers that have been successful in lifestyle centers in the United States may be looking for this type of center in Canada.
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