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BILTMORE FASHION PARK ADDRESSES MIXED-USE DEMAND

Like many older malls, 40-year-old Biltmore Fashion Park, in Phoenix, is getting a more modern look. This year its owner, Phoenix-based Westcor, is adding a pedestrian streetscape, reworking the merchandise mix, freshening up the outdoor spaces and updating the facade.

So far, so good. But Westcor (a subsidiary of The Macerich Co.) is also contemplating far more serious changes for the landmark luxury lifestyle center. The prospect excites David C. Scholl, senior vice president of development, but it also makes him a little nervous.

“We’re starting our zoning process to be able to get three, four, five footprints approved for midrise buildings,” Scholl said. “Those could be office, hotel or condominiums. But the worst thing I can do is put in a big office building [and] have it be successful, but now you cannot see the retail tenants. In that situation, I’ve taken all of the value created with the office building and lost it in the retail.”

And that, Scholl says, is why Westcor plans to take great care in the way it engineers any mixed-use overhaul of Biltmore Fashion Park, a popular dining destination anchored by Saks Fifth Avenue and Macy’s, with in-line tenants the likes of Cartier and Williams-Sonoma. The plan is to put the new uses on top, rather than in front, of the mall. “We don’t want to move too quickly,” he said. “The dollar signs we see today could end up screwing up a very wonderful destination tomorrow.”

That risk may be well worth taking, however. According to the U.S. Census Bureau, Arizona’s population will more than double from about 5.1 million today to approximately 10.7 million in 2030. The rapid urbanization of trade areas around the formerly suburban regional malls of Phoenix (the sixth-largest city in the U.S. and a $50 billion regional marketplace) makes the addition of uses to those properties increasingly attractive.

In other words, the demand for residential, office or hotel in some markets is so great that tearing up acres of parking, adding midrise towers and building expensive parking decks or subsurface structures is doable, Scholl says.“If malls can be reinvigorated through mixed-use, what a great way to have a sigh of relief for cities that have been worried about their malls dying,” Scholl said. “With the malling of America that occurred in the ’60s, ’70s and ’80s, a lot of these properties are reaching the end of their life cycles. This may be coming just at the right time.”

— JG