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A NEW DIRECTION

Jordan Creek ‘retail resort’ prototype for future centers, General Growth says

BY IAN RITTER

General Growth Properties bills its recently opened Jordan Creek Town Center as both a departure from its past retail projects and a standard for its future ones.

The 2 million-square-foot project in West Des Moines, Iowa, which General Growth calls a “retail resort,” contains an enclosed mall (called the Shopping District), an open-air big-box and lifestyle area (the Village) and a group of restaurants around a man-made lake (the Lake District). A Marriott Residence Inn hotel is set to open there this month.

General Growth has combined outdoor and nonretail components onto existing malls before, of course, and it continues to do so. In May the firm added a 150,000-square-foot lifestyle center to the 1.2 million-square-foot Woodlands (Texas) mall, outside Houston. Three years ago it built an open-air section onto its Park Place Mall, in Tucson, Ariz. The firm will be annexing apartments and condominiums to the enclosed Natick (Mass.) Mall sometime in 2006 and also plans to break ground that year on the Shoppes at Circle T Ranch, a 1 million-square-foot lifestyle center and enclosed mall in Westlake, Texas, near Dallas.

But Jordan Creek is the first such project that General Growth, one of the two largest U.S. retail real estate owners, has built from the ground up.

“There’s nothing like Jordan Creek Town Center in the country,” General Growth CEO John L. Bucksbaum, SCSM, said when it opened in August. “It’s the new standard of retail. Jordan Creek Town Center is the blueprint for our new developments and redevelopments moving forward.”

Mixing it up
Other developers, to be sure, have combined different retail uses, or blended retail and nonretail. Ben Carter Properties and Scott Hudgens Corp., for instance, in partnership with Simon Property Group, opened the enclosed Mall of Georgia outside Atlanta in 1999. The industry hailed the project’s attached outdoor section as the first major change to the mall layout since the 1956 opening of Southdale Center, the first enclosed shopping center, in Edina, Minn. Steiner + Associates is known for New Urbanist projects that mix lifestyle retailers with residential and office space, such as Zona Rosa, in Kansas City, Mo.

Gary Ragusa, vice president of the Hewlett, N.Y.-based Greenberg Group, a real estate research firm unaffiliated with the project, predicts that Jordan Creek will post sales per square foot in the low-$400 range. (The average U.S. mall posts about $345 in sales per square foot, according to ICSC.)

Still, the $200 million project is “definitely not a slam dunk,” Ragusa cautions. For one thing, General Growth must make sure that customers move around the different sections of the project, rather than sticking to just one area, he says. That has been an issue at other hybrid malls. “The question is whether the three segments are going to be able to survive and cross-pollinate,” Ragusa said.

The tenant test
But Colleen Johnson, a sales associate in the West Des Moines office of CB Richard Ellis (which has no financial involvement with the project), says the center will succeed simply because the area lacks specialty retail. About half of Jordan Creek’s tenants are new to the market; approximately a third are new to the state — Costco, Pottery Barn and Williams-Sonoma among them.

Before Jordan Creek, residents would drive about 200 miles south to Kansas City, Mo., or about 250 miles north to Minneapolis to shop, Johnson says. What is more, these are consumers who have been growing increasingly affluent. Central Iowa’s average household income has risen by nearly two-thirds, from $37,819 in 1990 to $61,651 last year, she says. CB Richard Ellis predicts that will climb to $68,964 by 2008.

“It’s a big leap for us to get all of those retailers,” Johnson said. “Pottery Barn and Williams-Sonoma are going to draw a lot of people. People have been wanting Costco for a very long time.”

Company executives agree.

“This is really as good as any lineup in the country,” said Ron DenAdel, General Growth’s vice president of development. “This really snowballed once we got a lot of key tenants committed.”

Dillard’s, Scheels All Sports and Younkers anchor the Shopping District, with Aeropostale, Hollister and Victoria’s Secret among its other tenants. Besides Costco, tenants in the open-air Village include Best Buy and DSW Shoe Warehouse. Among the Lake District’s restaurants are Joe’s Crab Shack and P.F. Chang’s.

Jordan Creek presented a clearly suitable venue for apparel chain Coldwater Creek, which opened one of its 5,500-square-foot, large-format stores (most of its units measure 3,500 square feet) in the Shopping District. Thanks to its catalog sales in the Des Moines area, the chain came in with a good idea of the local demand for its products, says David Gunter, director of corporate communications and investor relations.

Besides, Coldwater Creek already has a presence in other General Growth centers, notes Gunter. “We have a great relationship with General Growth,” he said. “So it makes it easier. It all goes into a smooth opening.”