In a 2014 ULI Fall Meeting session titled “Repurposing and Repositioning,” developers and architects discussed how they are breathing new life into three very different obsolete retail venues. What the three properties have in common is that all were developed originally by the Rouse Company of Columbia, Maryland.
Related: South Street Seaport Aims to Attract New Yorkers—along with Tourists—to Lower Manhattan
“Whether you’re doing lipstick, a facelift, an expansion, or a total transformation, you need to know expected costs and assess unanticipated costs,” said moderator Ronald Altoon of Altoon Partners Architects. “Obsolete properties were built under old building codes; they can have toxic materials, they may require seismic upgrades, and they will most surely need accessibility improvements. You have to consider infrastructure capacity, and in many localities, sustainable design is mandated. You will want to make the skin weathertight to reduce maintenance costs and thus improve profitability.”
“Every retail property has an atomic half-life,” he went on. “Retail is like fresh fruit: when it’s ripe, it’s fragrant and enticing, but when it gets stale, it stinks very quickly and noticeably.”
Michael Guerin of Macerich Company described his company’s successful repositioning of Santa Monica Place, which won the International Council of Shopping Centers’s 2013 “Best of the Best” award. The Rouse Company began developing this enclosed retail mall in the 1980s, orienting it toward Colorado Avenue rather than toward Third Street, which would only later become the highly successful retail pedestrian zone that it is now.
By 1999, when Macerich acquired it, Santa Monica Place was showing its age. Macerich’s plan for a high-density, mixed-use development was rejected, so the company then proposed a retail redevelopment maintaining the same 650,000-square-foot (60,000 sq m) footprint and height. This plan included an extension of Third Street to connect the redeveloped mall with the popular Third Street Promenade. Macerich removed the roof to create an open-air experience, with an upper-level dining deck offering Pacific Ocean views.
Today, Santa Monica Place is anchored by Bloomingdale’s, Nordstrom, and the Market; an ArcLight Cinemas theater is scheduled to open shortly. True Food Kitchen is one of many popular restaurants and cafés. High-end fashion brands include Barneys New York, Kitson, Victoria’s Secret, Kate Spade, and Diane von Furstenberg. This open-air destination connects with Santa Monica’s pedestrian-friendly downtown on all four sides, and is ideally situated to take advantage of the esplanade and Expo light rail currently under construction and scheduled to open in 2015–2016.
Moving eastward, a more radical shopping mall transformation is taking place in Austin, Texas. The 81-acre (33 ha) former Highland Mall had become a “dead whale” in a part of suburban Austin that had been a “desert for investment,” explained Matt Whelan of RedLeaf Properties and Live Oak–Gottesman. Opened in 1971, it was Austin’s first suburban shopping mall, but in the ensuing decades, retail dynamics shifted toward the west.
In 2010, RedLeaf partnered with Austin Community College (ACC) to purchase and redevelop the mall in order to create a compact, mixed-use, walkable district based on new urban principles, Whelan explained. But it was no easy task. Most of the existing space was owned and operated by a partnership of General Growth and Simon Property Group; AIG owned the underlying land; two lawsuits were underway; and investors and retail operators owned some of the property separately. It took six transactions over 2.5 years to “put Humpty Dumpty back together again.”
Once that was done, the partnership embarked on an innovative scheme. The community college, with a $300 million–plus budget and a service area the size of New Jersey, wanted educational space but did not need street visibility. ACC’s 1.3 million square feet (121,000 sq m) of space will occupy the entire former mall plus new construction. RedLeaf is transforming massive former parking lots into a mixed-use community with 1,200 homes, 200 hotel rooms, and neighborhood-serving retail.
ACC has completed a master plan for its space focusing on technology and health sciences education, and already has redeveloped the former JCPenney store. The college recently announced plans to bring Rackspace, a San Antonio–based cloud computing firm, into the building formerly occupied by Dillard’s; under its agreement with ACC, Rackspace will offer paid internships to ACC students. RedLeaf plans to break ground on a 300-unit apartment building with ground-floor retail space in 2015.
Finally, not far from the ULI Fall Meeting location, the Howard Hughes Corporation is moving forward with a game-changing transformation of the South Street Seaport. Hughes CEO David Weinreb introduced the project architect, Greg Pasquarelli of SHoP Architects, who explained that the Seaport thrived in the 1980s as a “festival marketplace” that was a popular tourist attraction. When the historic Fulton Fish Market moved out in 2005 and growth of the neighborhood with over 50,000 new residents, the Seaport was in decline well before Hurricane Sandy dealt a crushing blow.
“Today, no one would propose a three-story inward-focused building on the waterfront with a view of the Brooklyn Bridge,” said Pasquarelli. “We wanted to create something transformational that would combine cultural, entertainment, dining, and emerging retail uses.”
Recent demolition of the Pier 17 building is the first step in the creation of the new South Street Seaport. The development plan includes the complete renovation of Pier 17, with shops, restaurants, and open space. Topping off the new seaport building will be a 1.5-acre (0.6 ha) rooftop entertainment area that will be programmed every day of the year. With room for 2,500 seated attendees or 4,000 standing attendees, and a freight elevator that can handle a sport utility vehicle, this outdoor waterfront venue could host fashion shows, product launches, tennis, basketball, ice skating, concerts, movies, and much more—all in view of the Brooklyn Bridge and the Statue of Liberty. It will even be wired for television transmission.
While Hughes is taking some heat for its proposals to further develop the pier, the company is confident that a revitalized South Street Seaport will play a key role in the ongoing resurgence of lower Manhattan.
