March 21, 2003

Westcor takes shot at rescuing Crossroads

Managing EditorBOULDER ? Shopping mall developer Westcor will unveil in April a preliminary plan to inject new life into the ailing Crossroads Mall in Boulder.

Westcor, a subsidiary of The Macerich Company, owner of the mall, will present a draft plan during an April 23 pre-application meeting with city of Boulder officials.

Dave Scholl, senior vice president of development for Phoenix-based Westcor, which developed FlatIron Crossing mall nine miles away in Broomfield, sat down with The Boulder County Business Report March 6 to discuss a timeline for rejuvenating the mall, a task that finally collapsed last year when the city and Macerich failed to agree on redevelopment plans and terms of financial incentives.

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Santa Monica, Calif.-based Macerich bought Westcor last year and assigned the job of fixing Crossroads to Scholl and his team.

For the past few months Westcor has been gathering information on the demand of consumers and tenants. Scholl said that information would drive the merchandise mix of the mall and be the basis for a plan he hopes will meet with quick approval.

?This town does not need to be whipsawed around another time about what is going to happen and what isn’t going to happen,? he said. ?We will come to a conclusion about what is it the consumer wants in Boulder, which tenants want to locate in this project, and how we take this mixture of tenants and properly merchandise them in to a number of different venues inside this 70-acre square.

?I will be building our pro forma to make sure financially what we are trying to achieve makes sense for our company.?

Here are some excerpts from that March 6 interview:Scholl: The last couple of months, from most of the articles I’ve read, I get a tremendous sense of people asking, ?What’s going on? What is Westcor doing? I haven’t heard anything.?

We owe a response to that. We have tried to stay off the radar screen. But we have been working with city staff since November. We took the first five months to give ourselves a quick education. We are an entirely new team. Art Coppola (president of Macerich) said, ?I’d love for you to put together a team, approach this with fresh eyes, fresh outlooks. I don’t want any of our old team to give you their opinions, unless you ask, because I don’t want you to be swayed one way or the other. I don’t want you to have any misconceptions.?Q: Are you expecting to be involved with any kind of tif (tax increment financing) or city financing?

Scholl: No. Our company was acquired in July by Macerich. At that point, the city and Macerich were in a quiet period. They agreed things weren’t going to move forward. The city was talking about condemning; looking for another developer, testing the waters. They found out others weren’t interested. Macerich went through a cooling down period. By October, Art, the city attorney and Christine (Anderson), acting city manager, had a conversation, which led to Art coming to us, saying, ?I’ve had it. Boulder would like us to take another look. I told them we would be willing to do so if we could really focus on true economic demand. What is the market asking for, what tenants want to be there? And if you let us just focus on a retail project, we’ll agree that we’re not going to be interested in any type of subsidy from the city or tif or anything like that.Q: How detailed is the pre-application site plan on types of use that you will submit on April 23?

Scholl: Not much more than a bubble diagram, an indication that this is the flavor and flair that we want this corner to be. This is what we want to do with the old enclosed mall. One thing the city has asked is, ?Can we get some connection of the streets through the site?? We’re seeing if we can accommodate that, with Canyon Boulevard going through, 29th going up through 28th and 30th. When you bring that level of access and activity, you end up quartering the project. The question then is: How do we get those four quarters to play off each other? Do you make one a community feel, one a regional feel? How do we do that with the demand, to give the shopper a real experience?Q: How does the proximity of FlatIron Crossing affect demand at Crossroads?

Scholl: It will have an effect. FlatIron Crossing, I think, will be the super regional destination for northwest metropolitan Denver. As the company that owns both of those, that’s the logical conclusion we’ve come to. However, textbook regional shopping spacing is 10 miles. Each center has a five-mile radius, and they touch each other five miles out. If you could perfectly plan a city, you drop them down every 10 miles. These are nine miles apart, not that far off from being proper regional spacing. Some tenants say we only want two stores per market, and we’re covered in Park Meadows, and we’re covered in FlatIron, so we’re not interested in a Boulder location. But there are a lot more tenants who say, ?I think we can peacefully co-exist in both.? Our challenge is not to duplicate, but how do we bring something that doesn’t currently exist, and that Boulder is such a nice charming community? How do we find something that says to the Boulderite, if that’s such a word, we want you to think of this as your destination.Q: Will you address rampant rumors that Crossroads is closing, that tenants don’t want to be there, but they can’t get out of leases?

Scholl: I am on the development team, not a management team, but we’ve tried to impart on Crossroads’ management that if people want out, let them go. People want to stay? Let’s figure out a way to work around it. We’re not trying to run people off who are trying to stay, and we’re not trying to hold people’s feet to the fire that wish they could go. As a developer, the cleaner the palette the easier it is for me. So I am not encouraging the leasing team to give me 100,000 square feet of new five-year leases. Until we have a plan, we aren’t going to hamstring ourselves with a bunch of new tenants.Q: How likely are you to include a separate big-box retailer in the redevelopment?

Scholl: There’s definitely a bunch of them interested. We are trying to figure out if and how we can accommodate them. We’ve had the same questions from Santa Monica. ?So and so is interested, so we don’t you go get them?? But until we get all the info, I can’t. Because if I pick that category killer, do you know what it might do to my hope to have something special at this end of the project? I need to put together a merchandise mix that allows me to create little zones that peacefully co-exist, and I’m not going to commit to some giant thing until I know it’s the right thing to do. Q: Will there be a movie theater at Crossroads?

Scholl: My guess is there will be. We’ve got more than three theaters that said, ?We’d like to do this.? Again, we haven’t gotten the economics on this to see if it works. Q: Is Sears selling its land?

Scholl: They are trying. They are anxious to sell it.Q: If all went according to plan, and you were approved for construction in early spring 2004, when could somebody be shopping in something new?

Scholl: Technically, a year later, in early spring ’05, but tenants typically like to open in the fall to get that Christmas bang, which could push it to the fall of ’05. What I’d rather do, is to do such a good job that Boulder city council doesn’t even call it up, I can get my permits in the fall of ’03 and open in fall ’04. I think that’s a pipedream, but we’re going to act like that’s something to shoot for. Contact Doug Storum at (303) 440-4950 or e-mail dstorum@bcbr.com.

Managing EditorBOULDER ? Shopping mall developer Westcor will unveil in April a preliminary plan to inject new life into the ailing Crossroads Mall in Boulder.

Westcor, a subsidiary of The Macerich Company, owner of the mall, will present a draft plan during an April 23 pre-application meeting with city of Boulder officials.

Dave Scholl, senior vice president of development for Phoenix-based Westcor, which developed FlatIron Crossing mall nine miles away in Broomfield, sat down with The Boulder County Business Report March 6 to discuss a timeline for rejuvenating the mall, a task that finally collapsed last year when the city and Macerich…

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