Shopping Centers Today -> July 2006
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Mayors must act as cheerleaders if they want their constituents to support new retail development, civic leaders said at Spring Convention. “You have to repeat the vision time and time again,” said Kay Barnes, mayor of Kansas City, Mo. “Keep telling the story and the people will come around.” Many communities have a knee-jerk, negative reaction to new developments and think eminent domain and tax increment financing are dirty words, said Baltimore Mayor Martin O’Malley, whose constituents now favor TIF-supported projects, after seeing several successes in the city. “The public is becoming more sophisticated,” he said. Oscar Goodman, mayor of Las Vegas, agreed that opposition usually fades with the successful completion of that first publicly financed project. “When they see the product,” he said, “they become more supportive of it.” The industry needs more incentives if it is to embrace environmentally sustainable development, observers said at Spring Convention. They were responding to former President Bill Clinton’s keynote speech, in which he made a plea for building more energy-efficient centers. “Climate change is this industry’s biggest threat over the next 30 years,” he said to an audience of several thousand. But Terry S. Brown, CEO of Edens & Avant, said developers need the support of retailers and, above all, the government if sustainability is to become a true trend. His firm is installing its first energy-efficient roof at a center in Washington, D.C., but neither competitors nor tenants are pushing toward more green developments, he said. “It’s great PR, but in order for it to work, it’s going to take federal subsidies, more tax credits, more government-supported activity.” ICSC will now be awarding additional points in its International Design and Development Awards program to projects that emphasize sustainable design. Sometimes urban developers must invest heavily in infrastructure and sustainability. Such was the case for a small urban center in New Rochelle, N.Y., developed by Rosenshein Associates, a privately held firm in Mamaroneck, N.Y. Rosenshein built a four-story parking garage to serve just 77,000 square feet of adjacent retail. “It’s very expensive, but it drives the project,” said Lisa Rosenshein, a vice president, during a panel discussion. “We knew we were overpaying … but felt the garage would bring long-term value. As a developer, you need to know how to get the tenant there. If you build it, they will shop — if you understand the community.” Internet retail sales are up 27 percent this year, but shopping center owners need not fear for their investments, because tenants are learning to integrate Web and in-store traffic, said Jeffrey H. Newman, senior partner and chairman of real estate development for the Newark, N.J.-based law firm of Sills Cummis Epstein & Gross, during a panel discussion. JCPenney and Nordstrom are the best examples, said Deborah Weinswig, a retail stock analyst at Citigroup. The catalogs of both chains focus on driving traffic to the Web site, which will in turn push the Web surfers to the mall, she said. “If you order something online,” she said, “the site will tell you what store has your size and the style you want.” Americans continue to fall in love with urban living, said Theodore Amenta, design architect for New York City-based developers, A & Co. While all ages are represented in this push, young people are driving it, he said. “They are sophisticated, they want a café society … and the market on the supply side is leading the way, creating the physical manifestations of the city of the future.” A 2005 study by Chicago-based CEOs for Cities, an organization of urban leaders, indicates that people ages 25 through 34 in the country’s 50 biggest metro areas are three times more likely to live within three miles of the city center than during the 1980s. In urban markets where retail is ample, “we’re less oriented towards being needs-driven and more oriented to being aspiration-driven,” Amenta said.

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