By Eric Jay Toll for The Arizona Builder’s Exchange
“When was the last time you were in Metrocenter?”
That is today’s answer to comments about the north Phoenix mall. Since Carlyle Development Group acquired the property earlier this year, a lot has been happening in the public spotlight. It’s what’s going on in the management office that is going to gild the mall’s future.
“We’re at 70 percent occupancy,” says Brent Meszaros, Metrocenter’s general manager. “Our goal is to get and keep our retailers.”
Short-Term Goals: Acquire Anchor Spaces, Lease up Vacancies
Getting and keeping is at the forefront of the short-term goals. With two empty anchors—combined with Sears second highest grossing Arizona property—Metrocenter has a foundation that is getting much more than fresh cosmetics. Carlyle is in the process of acquiring ownership of the two empty boxes.
“We have a letter of interest for 150K SF,” says Carlyle’s Chief Operating Officer Warren Fink, “which will bring in an active, aggressive anchor store in one of the locations.” Interest in the mall’s future potential is positive and high.
Like many older malls, mall ownership did not include the anchor stores. Dillards, Macy’s and Sears own their locations. Macy’s just completed a $500K interior renovation. Dillards still uses only one story as an outlet. The old Broadway is under contract with Carlyle and negotiations continue to acquire the J.C. Penney location.
Despite Westcor’s multi-million physical renovation adding skylights and brightening the interior, Metrocenter languished with its dated reputation. Fink sees renaissance by creating vibrancy at Metrocenter. “We want to leverage the transit center (in the southwest parking lot off Dunlap) and connect it to the food court. We have a lot here from which we can build.”
Long-Term Vision: Develop Mixed Use Towers Around Retail Core
Building is in the forefront of Carlyle’s mind as Butler Design Group and attorney Paul Gilbert collaborate on a planned unit development (PUD) application to transform Metrocenter from mall to multiple use. The vision includes an office complex, an in-mall medical clinic and a residential tower—likely to be active adult-oriented and age-restricted.
It’s going to take some months to get the PUD application in front of the city. The challenge is crafting flexibility into the application to be able to respond to changing market needs. “We want to be ready to jump on opportunities,” Meszaros says.
Phoenix planning officials say that core areas like Metrocenter are high density development targets. The PUD proposal is consistent with the city’s general plan for the North Mountain Village.
“This is going to take time, but we see Phoenix as a growing market and Metrocenter as a major investment,” he explains. To that end, Metrocenter is actively involved with both the area’s Metro Business Alliance and the neighboring North Mountain Business Alliance.
“We’re in advanced discussions with prospects right now,” he says. “We’re also making a concentrated effort to be part of the city and create a civic center environment. We want to be ingrained with the community and the city.”
“There’s a lot with which we create synergy,” Fink adds. Smaller projects are adding up to big returns. Family restaurants will complement the food court – the first to soon be announced – near the Harkins Theater complex on the southwest side of the mall.
From the larger perspective, Carlyle Development Group is open to venture partners for the PUD development. “We’ve got the land, and that makes strong joint venture prospects for the medical clinic, the multi-family housing, or office complex,” comments Fink. “We believe it’s going to be at least a year before we can break ground on this part of the complex.”
As Metrocenter’s renaissance continues, hopes are that the adjoining mostly empty strip malls and high-vacancy office complexes will benefit from the synergy and begin to fill once again.