Simon Outlet Mall 61st & Hwy 75

[Vision 2025]

The Elm St improvement would be the moving of the exit. Would a bidder be so confident of the outcome to park earth movers? They were still there this morning.

If it's a couple of off road dump trucks and a track hoe that's Anchor Sand.

[Conan71]

If it's a couple of off road dump trucks and a track hoe that's Anchor Sand.

Looks like earth movers and bulldozers, Kirby.

[Conan71]

The Elm St improvement would be the moving of the exit. Would a bidder be so confident of the outcome to park earth movers? They were still there this morning.

Where are they moving the exit to and what else is involved?  The engineer's estimate, according to OTA is over $10 mil.

[swake]

Where are they moving the exit to and what else is involved?  The engineer's estimate, according to OTA is over $10 mil.

They are moving the exit/entrance back about quarter mile with one way service roads on each side with a Texas turn around at Elm. Jenks city bond money and OTA are paying for it.

[LandArchPoke]

Again, I think it is to keep trying to take the city's attention away from Horizon's project.

This doesn't make much sense to me, or even if they are trying to "smoke" out Horizon like either you or someone else mentioned they did in Omaha.

I think people are forgetting there is still Woodmont's projects at Hard Rock. They've executed the ground lease for this, which means they're further along than both Simon and Horizon.

Even if Simon is out to kill Horizon's proposal it's and are out to pack their bags up after then the Woodmont project will get built. Seems like a giant waste of money and time for Simon staff. Simon is interested in the Tulsa area or they wouldn't be even messing around with it because there's no way to successfully block a project from getting built and they don't have any properties close (outlets) that this would compete against (like if they had built the OKC project or if they had one in NWA).

[Conan71]

This doesn't make much sense to me, or even if they are trying to "smoke" out Horizon like either you or someone else mentioned they did in Omaha.

I think people are forgetting there is still Woodmont's projects at Hard Rock. They've executed the ground lease for this, which means they're further along than both Simon and Horizon.

Even if Simon is out to kill Horizon's proposal it's and are out to pack their bags up after then the Woodmont project will get built. Seems like a giant waste of money and time for Simon staff. Simon is interested in the Tulsa area or they wouldn't be even messing around with it because there's no way to successfully block a project from getting built and they don't have any properties close (outlets) that this would compete against (like if they had built the OKC project or if they had one in NWA).

I've heard from several people that whomever Woodmont has been using for their leasing consultant is not registering well with retailers.  When I quizzed one of the Simon execs back in February why they wouldn't just partner with Woodmont and bring their tenants, the reply was that Woodmont has not been pulling their weight on the Chesterfield outlet project in the STL area.  That's not to say at some point a joint venture couldn't happen on that property, but Simon has to be concerned about the possibility of diverting revenue from 71st & Memorial.

There's an important point to remember here and some history we need to revisit:

When Tulsa Hills was announced, Simon, as well as some city officials expressed concern for revenue drain off Woodland Hills.  This was a ludicrous assertion as Tulsa Hills is primarily big box retail with multiple restaurant pad sites, not really the sort of shops you find in WHM. 

Who honestly believes Simon wants to scavenge their own revenue pool?  An outlet mall does have the same sort of shops as WHM.  What are the chances a discount Kate Spade outlet would hurt sales at their full price mall location?  Would Simon intentionally scavenge revenue off a property that by most accounts is doing quite well?  Would they want a competitor to scavenge off sales from that property?

After Horizon built the outlet mall in OKC, David Simon allegedly pledged to never allow a competitor to put in an outlet mall in a city where they had a traditional mall.

To this point, Simon is out under $1 million to protect WHM from competition.  I have no clue what sort of revenue WHM brings in every year, but $1 mil seems like a reasonable amount of money to fend off a drain on future revenues.  Development in suburbia has already carved into the 71st & Memorial area's earning power quite a bit.  An outlet mall is a direct threat to the sort of brands WHM currently houses.

JMO- Simon building at 61st & Hwy 75 or Jenks seems to be a bigger threat to drain their revenue stream at WHM than if they just jumped in bed with Woodmont.  An interesting fact about the development of WHM back in the 1970's is the same property Horizon's project is proposed for was used as a "blind" to basically keep Eastland Mall's development stalled while Dayton-Hudson (I think that was the original WHM developer) ended up building "way out in the sticks" at 71st & Memorial.

I've learned a lot of strange stuff about the outlet mall business the last 8-9 months so nothing would surprise me at this point.

[LandArchPoke]

I've heard from several people that whomever Woodmont has been using for their leasing consultant is not registering well with retailers.  When I quizzed one of the Simon execs back in February why they wouldn't just partner with Woodmont and bring their tenants, the reply was that Woodmont has not been pulling their weight on the Chesterfield outlet project in the STL area.  That's not to say at some point a joint venture couldn't happen on that property, but Simon has to be concerned about the possibility of diverting revenue from 71st & Memorial.

There's an important point to remember here and some history we need to revisit:

When Tulsa Hills was announced, Simon, as well as some city officials expressed concern for revenue drain off Woodland Hills.  This was a ludicrous assertion as Tulsa Hills is primarily big box retail with multiple restaurant pad sites, not really the sort of shops you find in WHM. 

Who honestly believes Simon wants to scavenge their own revenue pool?  An outlet mall does have the same sort of shops as WHM.  What are the chances a discount Kate Spade outlet would hurt sales at their full price mall location?  Would Simon intentionally scavenge revenue off a property that by most accounts is doing quite well?  Would they want a competitor to scavenge off sales from that property?

After Horizon built the outlet mall in OKC, David Simon allegedly pledged to never allow a competitor to put in an outlet mall in a city where they had a traditional mall.

To this point, Simon is out under $1 million to protect WHM from competition.  I have no clue what sort of revenue WHM brings in every year, but $1 mil seems like a reasonable amount of money to fend off a drain on future revenues.  Development in suburbia has already carved into the 71st & Memorial area's earning power quite a bit.  An outlet mall is a direct threat to the sort of brands WHM currently houses.

JMO- Simon building at 61st & Hwy 75 or Jenks seems to be a bigger threat to drain their revenue stream at WHM than if they just jumped in bed with Woodmont.  An interesting fact about the development of WHM back in the 1970's is the same property Horizon's project is proposed for was used as a "blind" to basically keep Eastland Mall's development stalled while Dayton-Hudson (I think that was the original WHM developer) ended up building "way out in the sticks" at 71st & Memorial.

I've learned a lot of strange stuff about the outlet mall business the last 8-9 months so nothing would surprise me at this point.

Woodland Hills - the portion that Simon owns - brings in somewhere around $30 million in leasing revenue a year. I've seen sublet rates in the mall for over $40 per sq. ft. so that's just an estimate based off a slightly higher prime rate. I wouldn't be surprised if it's much higher than $30 million a year.

There has been a lot of debate on whether outlets actually pull any sales from regular malls. From everything I've read it's generally accepted that the impact is minimal. Someone who is going to buy a $500 Kate Spade bag isn't going to be interested in the knock off/lower quality $100 Kate Spade bag at the outlet store. However, someone who would never shop at Kate Spade because they can't afford it or think it's to expensive that buys bags at Khol's or Belk would buy the $100 outlet Kate Spade bag.

I had actually forget how mad Simon got about Tulsa Hills. I could see them trying to manipulate this to preserve market share and try to protect Woodland Hills as well. The Cherokee's however could build the outlet center with cash if they really wanted to so maybe Simon is just under estimating them? If Woodmont didn't have that partnership with them, Simon could kill both of the other projects rather easily by just "planning" a development for years and blocking any tenants from signing on to any of the other projects.

I will agree that this all does seem very fishy in that Simon has done almost no outreach to the broader community for the Turkey Mountain site, and then pulled the stunt with the Jenks site. It will be interesting to watch what eventually happens.

[Conan71]

I've looked at the Cherokee project from the beginning as a a clean sheet retail project which could go any number of directions.  If they fail to get the necessary outlet anchors to sign which will help get all the other 75 or so tenants all is not lost.  They can stage some sort of retail which would work well as a shopping destination which would compliment their entertainment, gambling, golf, and hospitality properties on the site.

I'm no expert on retailing but with the access and nearby amenities, the Cherokees have great retail potential sitting there, regardless what form it takes.

A retail development like this makes better economic sense for a suburb to take advantage of, especially Catoosa.  The infrastructure is already there (or mostly), and you could anticipate upwards of 80-90% of the receipts to come from zip codes outside Catoosa.

The payback to COT for the infrastructure investment has never looked great at 61st & Hwy 75.  Tulsa would get nowhere near the net benefit Catoosa would from an outlet mall.

[patric]

More bait and switch?
http://www.fox23.com/news/news/local/bartlett-fights-keep-outlet-mall-tulsa/nmXPD/

[cannon_fodder]

I am friends with numerous managers at many high end stores at Woodland Hill Mall. They all fear significant canablalism as most Tulsa consumers want a fancy patch on their purse/clothes but are happy to get it as cheap as possible. They are sales driven businesses in Tulsa.

I've heard numbers as high as 50% bring planned for. Which sounds about right to me, 50% of the people don't give a damn and the (alleged) quality of a $500 purse, but sure want everyonebto think they have a $500 purse. So they are more than happy to go to an outlet mall and get a sanctioned knockoff. Definitely true for Nike, at least 50% of people want the "coolness" associated with a swoosh on their black socks and wouldn't bother arguing its a quality thing.

[TheArtist]

If Tulsa were growing a little better it wouldn't be so bad, but yes the cannibalism factor is larger with such slow growth.  I was looking at some census numbers a few weeks ago and if I remember correctly Tulsa only added about 1,000 people for all of 2014.  Out of about 400,000 people what is that growth rate percentage wise?  

Also, I wonder where the tax dollars for schools will go with this new development.  Tulsa really needs more retail sales for it's school district but as I understand it, I think all of that stuff off Highway 75 so far is going to Jenks schools but Tulsa Fire and Police.  Union has Woodland etc. for its schools, Tulsa has what, Utica Square and Promenade as its two big anchors?  

[Dspike]

As a baseline, the US population grew 0.77% in 2013 to 2014. For that same year,

Tulsa Metropolitan area grew 0.7% to 969,224 (adding 6,800).
OKC Metropolitan area grew 1.2% to 1,336,767.

Tulsa County grew 1.1% to 629,598 people.
Oklahoma County grew 1.4% to 766,215 (adding 10,547).

City of Tulsa grew .3% to 399,682 (adding 1,278).
Broken Arrow grew 1.2% to 104,726  (adding 1,256).
Jenks grew 6.8% to 19,951 (adding 1,264).
Owasso grew 4.0% to 33,773 (adding 1,300).

The year before, Tulsa grew match faster (1.0% or 3,722).




http://www.tulsaworld.com/news/local/tulsa-metro-population-growth-slows-in-census-bureau-says/article_dfb60f65-f789-5e9e-ae02-7f5200c18751.html

http://www.tulsaworld.com/communities/bartlesville/jenks-is-fastest-growing-city-in-oklahoma/article_9258f949-1e96-58fd-8bf6-781c0a1ad0f6.html

http://www.tulsaworld.com/newshomepage2/census-rarity-tulsa-population-change-outpaces-broken-arrow/article_b02fc2b2-1c24-52b2-b25f-c78907a73a36.html

[Conan71]

The Bales Park site, I believe is TPS.  Originally planned site was Jenks, or so I'm told. 

I've worked the numbers, apparently with a more critical eye than the mayor's staff has, and I don't see how this adds anything net to the sales tax base at the H75/61st corridor- not now, not in the next 20 years.

Simon is the largest retail developer/manager in the world.  Why on earth would they scavenge their own good-performing property?  They have to already understand the point CF made.  I think they will dick with the city long enough that Horizon decides to move their resources elsewhere and Simon will do nothing.

I've spoken with two previous mayors who see this folly, why doesn't DB see what a joke this is?

[Conan71]

As a baseline, the US population grew 0.77% in 2013 to 2014. For that same year,

Tulsa Metropolitan area grew 0.7% to 969,224 (adding 6,800).
OKC Metropolitan area grew 1.2% to 1,336,767.

Tulsa County grew 1.1% to 629,598 people.
Oklahoma County grew 1.4% to 766,215 (adding 10,547).

City of Tulsa grew .3% to 399,682 (adding 1,278).
Broken Arrow grew 1.2% to 104,726  (adding 1,256).
Jenks grew 6.8% to 19,951 (adding 1,264).
Owasso grew 4.0% to 33,773 (adding 1,300).

The year before, Tulsa grew match faster (1.0% or 3,722).




http://www.tulsaworld.com/news/local/tulsa-metro-population-growth-slows-in-census-bureau-says/article_dfb60f65-f789-5e9e-ae02-7f5200c18751.html

http://www.tulsaworld.com/communities/bartlesville/jenks-is-fastest-growing-city-in-oklahoma/article_9258f949-1e96-58fd-8bf6-781c0a1ad0f6.html

http://www.tulsaworld.com/newshomepage2/census-rarity-tulsa-population-change-outpaces-broken-arrow/article_b02fc2b2-1c24-52b2-b25f-c78907a73a36.html

Wow, that's even more dismal growth than I gave Tulsa credit for when I spoke at Sustainable Tulsa on Thursday.

We've staked our fortunes on retail sales tax expansion for 25 years.  The reason we cannot afford to maintain or develop infrastructure and cannot comfortably provide public safety services is because Tulsa does not grow appreciably and we don't have the kind of leadership vision to take stock of our best assets and promote them for tourism. 

Staking our future on "retail tourism" is lame.  I really, really hope there is better vision for our city within the group I met you through, Dspike. 

[Vashta Nerada]

Staking our future on "retail tourism" is lame.  I really, really hope there is better vision for our city within the group I met you through, Dspike. 

But we put so much into the War On Tourism as is...
http://www.fox23.com/news/news/local/operation-whiskey-business-aimed-keep-rocklahoma-s/nmPr8/